DTN Closing Grain Comments

Spring Wheat Tumbles Lower on Mixed Day

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was up 2 cents in the July contract and up 1 3/4 cents in the December. Soybeans were down 8 cents in the July contract and down 6 3/4 cents in the November. Wheat closed down 2 3/4 cents in the July Chicago contract, up 3/4 cent in the July Kansas City, and down 10 3/4 cents in the July Minneapolis contract. The June U.S. dollar index is up 0.60 at 90.67. June gold is down $12.10 at $1,326.20 while May silver is down 53 cents and May copper is down $0.0315. The Dow Jones Industrial Average is down 90 points at 24,373. June crude oil is down $0.03 at $68.37. June heating oil is up $0.0134 while June RBOB gasoline is up $0.0217 and June natural gas is up $0.009.

Corn:

July corn closed up 2 cents Monday at $3.87 1/2, a small gain after Friday's 5 1/2 cent drop with chances for corn planting looking much better now that temperatures are warming up across the Midwest. The Corn Belt is expecting highs in the 60s and may see some 70s Monday with mostly dry conditions west of Ohio this week. In Brazil, the second corn crop is still doing well, but the pattern has turned drier the past five days and deserves monitoring. It is still not clear if corn exports will reach USDA's goal of 2.225 billion bushels in 2017-18, but last week's inspections were more encouraging, coming in at 67.7 million bushels and giving corn a chance. One bearish concern is the ability of corn prices to keep noncommercials happy in their heavy, net-long positions. Friday's CFTC data showed noncommercial net longs dropped from 382,304 to 340,060 as of Apr. 17 as prices fell back from their April high, but still reflect a bullish view with 71% of speculators long. Fundamentally, the outlook for corn prices remains neutral with the uncertainty of a new growing season ahead. Technically, the trend remains sideways in May corn and up in new-crop corn, even though prices have backed down from their April high. DTN's National Corn Index closed at $3.45 Friday, down from its highest prices since June 2016 and priced 32 cents below the May contract. In outside markets, the June U.S. dollar index is up 0.60 as the June 10-year T-notes continue to slide to new contract lows, taking the yield higher, close to 3%.

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Soybeans:

July soybeans fell 8 cents to $10.32 1/4 Monday, the sixth drop in seven sessions as demand for U.S. soybeans continues to be a bearish concern. Monday morning, USDA said 17.3 million bushels of soybeans were inspected for export last week, a bearish amount. Total shipments are now down 13% in 2017-18 from a year ago and represent a threat that USDA's 550 million bushel estimate of U.S. ending stocks will need to be increased. July soybean oil prices were also a bearish drag on Monday's soybean prices, falling 0.26 cent to their lowest close in over two years. In this environment, old-crop soybean prices don't need another bearish concern, but Friday's CFTC data showed noncommercials increased net longs in soybeans from 210,265 to 224,357 as of Apr. 17, the most bullish position they have held since July 2016, but one that may become difficult to support. Here in the U.S., the fundamental outlook is neutral to bearish for old-crop soybean prices while China keeps its purchases minimal. Technically, the trend is sideways in old-crop soybeans with signs of losing upward momentum after failing to reach their 2017 high of $10.80. In new-crop soybeans, the trend is up, but currently stalled. DTN's National Soybean Index closed at $9.59 Friday, near the middle of its range in April and priced 70 cents below the May contract.

Wheat:

July Chicago wheat was down 2 3/4 cents and July K.C. wheat was up 3/4 cent at $5.02 3/4 Monday, staying roughly steady after the southwestern U.S. Plains received light rain over the weekend. There are chances for more light amounts in the region this week, but drought remains a serious concern for winter wheat with no significant relief in sight yet. July Minneapolis wheat dropped 10 3/4 cents Monday, hurt by warmer temperatures in the Northern Plains that are improving planting conditions. With plentiful supplies of old-crop wheat available around the globe, demand for U.S. wheat has not done well in 2017-18 and that trend continues. Monday morning, USDA said 22.8 million bushels of wheat were inspected for export, keeping total inspections down 10% from a year ago. Friday's CFTC data showed noncommercials increased net longs in K.C. wheat slightly to 48,887 as of Apr. 17, holding firm in their bullish opinions even though prices dropped 41 cents that week. As long as wheat conditions continue to look favorable in the world's other wheat regions, the fundamental outlook for wheat prices remains bearish with the uncertainty of a new season ahead. Technically, the trends remain sideways for all three wheats with prices trading at the lower end of their ranges. DTN's National SRW Index closed at $4.33 Friday, near the middle of its range in April and 30 cents below the May contract. DTN's HRW Index closed at $4.44, also in the middle of its April range.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman