DTN Before The Bell Grain Comments

Morning CME Globex Update:

July corn and soybeans started with modest bounces higher early Tuesday after soybeans fell to their lowest close in two months on Monday. Winter wheat contracts were mixed after USDA's crop ratings reflected poor crop conditions once again in the southwestern Plains.

Other Markets:

Dow Jones:	Lower
U.S. Dollar Index:	Higher
Gold:	Lower
Crude Oil:	Lower

Corn:

July corn was up 1 3/4 cents early Tuesday, a small positive reflex after Monday's 5 1/2 cent drop and is still not far from last week's new eight-month high. Late Monday, USDA said 39% of corn was planted and 8% had emerged, a little closer to its five-year averages. Illinois is 74% finished with planting, but northern states like Minnesota are behind their usual paces. Tuesday morning's rain in Minnesota is part of a row of showers expected this week from Wyoming to Michigan that will add to planting delays in the northern states while the southern Corn Belt remains comfortably warm-to-hot in Texas. Corn prices continue to benefit from Brazil's stretch of dry weather, but there is a chance of light to moderate rain amounts in south-central Brazil to monitor in the five-day forecast. Technically, the trend remains up in both July and new-crop corn. CME Group reported 314 delivery intentions in May corn early Tuesday. DTN's National Corn Index closed at $3.65 Monday, still near its highest price in 22 months and priced 36 cents below the July contract. In outside markets, the June U.S. dollar index is up 0.34 and June crude oil is down 66 cents after posting a new three-year high on Monday.

Soybeans:

July soybeans were up 6 cents early, a modest bounce after Monday's 25 1/4 cent loss took prices to their lowest close in over two months. The chief concern for U.S. soybean prices this summer continues to be the noticeable lack of participation from China and the quiet end to last week's meeting in Beijing did not help matters. With U.S. soybean shipments down 13% from a year ago with four months remaining, USDA's estimate of ending soybean stocks has room to go higher -- something we may get a taste of in Thursday's WASDE report. Late Monday, USDA said 15% of soybeans have been planted, slightly ahead of their usual pace. Most states are either close to or ahead of their five-year averages. The biggest delay is seen in Minnesota where only 1% of soybeans have been planted and more rain is expected this week with cooler temperatures. Technically, the trend is down in July soybeans and sideways in November soybeans. For May contracts, the CME Group reported 68 delivery intentions for soybeans, 0 for meal and soybean oil early Tuesday. DTN's National Soybean Index closed at $9.40 Monday, its lowest price in over two months and priced 72 cents below the July contract.

Wheat:

July Chicago wheat was down 1/2 cent and July K.C. wheat was up 1/4 cent early Tuesday, staying down from last week's new nine-month highs while traders try to assess this year's wheat production. According to a Dow Jones survey of analysts, new-crop ending wheat stocks are expected to be down modestly from the current season for both, the U.S., and the world, but the new levels are still considered plentiful. U.S. winter wheat production is expected to be estimated at 1.18 billion bushels (bb), down from 1.27 bb a year ago. Given the severity of this year's drought, there is probably room for that estimate to come down further. Late Monday, USDA said one-third of winter wheat was headed and 34% was rated good to excellent, the lowest since 2014. In the state of Washington, 83% of winter wheat was considered good to excellent, offering partial balance to the more dire conditions in the southwestern Plains. Outside of North America, dry conditions in Australia are the main concern while most major wheat regions are reporting no serious problems. Technically, the trends turned higher last week for the July contracts of both, Chicago and Kansas City wheat. For May contracts, early Tuesday showed no delivery intentions for all three wheats. May Chicago wheat has had no deliveries yet, and 84 contracts are still open as of early Tuesday. DTN's National SRW index closed at $4.79 Monday, down from its highest price in nine months and 32 cents below the July contract.

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

FollowTodd on Twitter @ToddHultman1

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