DTN Closing Grain Comments

By Darin Newsom
DTN Senior Analyst

General Comments:

July corn was 7 1/4 cents higher at $4.02 1/2, with December 7 1/4 cents higher at $4.20 1/4. July soybeans finished 3 1/2 cents higher at $9.98 1/2, with November up 4 cents at $10.08 1/4. July Chicago wheat closed 20 3/4 cents higher at $5.18 1/4, July Kansas City was 19 3/4 cents higher at $5.38 3/4 and July Minneapolis gained 13 3/4 cents to $6.28 1/2. June gold was $1.90 higher at $1,291.30, with July silver down $0.036 and June copper losing $0.0260. The Dow Jones Industrial Average was 2 points lower at 24,711. June crude oil was $0.11 lower at $71.38. The June distillates (heating oil) contract was $0.0118 lower, June RBOB gasoline dropped $0.0070 and June natural gas lost $0.005.

For the week:

July corn closed 6 cents higher and December finished 5 3/4 cents higher. July soybeans were 8 1/4 cents higher and November was 6 3/4 cents higher. July Chicago wheat was 18 1/4 cents higher, July Kansas City finished 16 1/2 cents higher and July Minneapolis wheat was 5 1/4 cents higher.

Corn:

Corn posted a solid rally Friday, supported by overnight rumors that a trade deal was nearing completion between the United States and China. Additional buying could have been tied to headlines of Brazil's Safras lowering that country's overall corn production to 79 mmt, well below USDA's latest estimate of 87 mmt, due in large part to ongoing weather problems with the safrina (second, winter) crop. Commercial buying was a lead factor in the new-crop rally, indicated by the weakening carry of that market's forward curve. The stage is set for another explosive Sunday night session, particularly if weather across the U.S. Midwest this weekend is deemed to be hot and dry.

Soybeans:

There was plenty of fresh news to move the soybean market Friday, but in the end, much of it seemed to cancel each other out. Overnight trade heard rumblings of a trade deal being done between the U.S. and China, a deal that would include the removal of Chinese tariffs against U.S. ag commodities, including soybeans. This sparked a sharp overnight rally, one that faded at the end of the session though. Between the close of overnight trade and open of the day session, USDA made four announcements regarding U.S. soybean exports, two sales and two cancelations, one of each for both old-crop and new-crop. The biggest news was the cancelation of 879,000 mt (30 mb) for old-crop by unknown. All this news led to a stalemate in the market with futures closing near where overnight trade had finished. Sunday night's open could hinge on the last round of rumors/news to float to the top of the barrel.

Wheat:

Winter wheat looks to be in a normal weather market at this time, with a strong rally on Friday characteristic of such a situation. If it rains over the weekend -- particularly across the parched U.S. Southern Plains -- sharp losses could be seen Monday. If it doesn't rain, or rain is less than expected, look for solid follow-through buying when markets open Sunday. Futures spread action over the course of the day indicated commercial support. However, only Chicago spreads were able to close with a slightly weaker carry situation. Long-term the market remains bearish fundamentally, and July Kansas City remains in a downtrend on its daily chart. But as stated above, it could all hinge on what the weather does this coming weekend.

Darin Newsom can be reached at darin.newsom@dtn.com

Follow Darin Newsom on Twitter @DarinNewsom

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