DTN Closing Grain Comments

General Comments:

Corn was down 3/4 cent in the July contract and unchanged in the December. Soybeans were up 5 1/2 cents in the July contract and up 6 3/4 cents in the November. Wheat closed down 4 cents in the July Chicago contract, down 4 1/2 cents in the July Kansas City and down 2 1/4 cents in the July Minneapolis contract.

The June U.S. dollar index is down 0.36 at 92.52. June gold is up $8.30 at $1,321.30 while July silver is up 24 cents and July copper is up $0.0550. The Dow Jones Industrial Average is up 134 points at 24,676. June crude oil is up $0.28 at $71.42. June heating oil is up $0.0062 while June RBOB gasoline is up $0.0250 and June natural gas is up $0.067.

Corn:

July corn ended down 3/4 cent at $4.02 on Thursday, not impressed that USDA is expecting world ending corn stocks to fall from 194.85 million metric tons (mmt) (7.67 billion bushels) in 2017-18 to 159.15 mmt (6.27 bb) in 2018-19. The drop is largely due to corn production failing to keep up with demand a second consecutive year. Here in the U.S., USDA expects 14.04 billion bushels (bb) of corn at harvest to result in 1.682 bb of ending stocks in 2018-19, a stocks-to-use ratio of 11.5%. Corn planting is doing better now that temperatures finally got warmer, but there are factors to watch. Thursday's U.S. Drought Monitor showed increased dryness stretching from the southwestern Plains into western Illinois. Northwestern Minnesota was also drier than a week ago, but rain is expected across the central Corn Belt this week with a few days of cooler temperatures. Early Thursday, USDA said last week's export sales and shipments of corn totaled 27.4 million bushels (mb) and 70.3 mb respectively, neutral amounts for the week. Total corn shipments are now down 14% in 2017-18 from a year ago with four months left in the season. Brazil's dry weather remains potentially bullish for corn with only moderate showers expected in the next seven days in the south-central region. Technically, the trends remain up in both, July and new-crop corn. May corn showed 1,126 contracts of open interest early Thursday. DTN's National Corn Index closed at $3.67 Wednesday, still near its highest price in 22 months and priced 35 cents below the July contract. In outside markets, June crude oil is up 28 cents after BBC News reported Israel's military said rockets were fired into the Golan Heights and they responded with a strike against Iran's military in Syria.

Soybeans:

July soybeans closed up 5 1/2 cents at $10.21 1/4, helped by USDA's lower-than-expected U.S. ending stocks estimates of 530 million bushels old-crop and 415 mb new-crop. USDA expects a 4.28 bb harvest this fall and that has a lot of room to change as we learn more down the road. In the current season, USDA increased the crush estimate by 20 mb and insisted on keeping the export estimate unchanged, in the face of contradictory evidence. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 13.0 mb and 17.3 mb, a neutral-to-bearish combination that has total soybean shipments down 12% from a year ago. USDA increased Brazil's current crop estimate 2 mmt to a new record high 117.0 mmt and reduced Argentina's crop 1 mmt to 39.0 mmt. World mid-crop plus ending soybean stocks are expected to total 92.16 mmt (3.4 bb) in 2017-18 and then drop to 86.70 mmt (3.2 bb) in 2018-19. Technically, the trend is down in July soybeans, but still sideways in new-crop soybeans where futures spreads show a bullish commercial outlook. Among May contracts, the CME Group reported 57 delivery intentions for soybeans, but none for meal and soybean oil early Thursday. DTN's National Soybean Index closed at $9.44 Wednesday, up from its lowest price in over two months and priced 71 cents below the July contract.

Wheat:

July Chicago wheat closed down 4 cents and July Kansas City wheat was down 4 1/2 cents at $5.27 after USDA predicted global wheat production would hit 27.5 bb in 2018-19, another big year and not far from last year's record high 27.9 bb. U.S. ending wheat stocks are expected to total 955 mb in 2018-19, a modest drop from 1.07 bb in 2017-18, but not much of a difference in terms of price expectations. World ending wheat stocks are expected to drop to 264.33 mmt (9.7 bb) in 2018-19, also not much of a drop from the previous year's 270.46 mmt (9.9 bb). Demand for U.S. wheat continues to be a problem as USDA said last week's export sales and shipments of wheat totaled 1.3 mb and 11.8 mb respectively, another bearish showing. Total wheat shipments are now down 13% in 2017-18 from a year ago with one month left in the old season. Technically, the trends turned higher last week for the July contracts of both, Chicago and K.C. wheat. There were no deliveries for May wheat contracts early Thursday and May K.C. wheat has 330 contracts still open. DTN's National SRW index closed at $4.79 Wednesday, 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

Follow Todd Hultman on Twitter @ToddHultman1

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