DTN Before The Bell Grain Comments

Morning CME Globex Update:

Grain prices were steady to a little higher at Wednesday's morning break, finding no strong direction early. Meanwhile, the June U.S. dollar index is challenging its highest prices in 2018 with support from rising Treasury yields. At 8 a.m. CDT, USDA announced 5.5 million bushels of optional-origin corn was sold to Saudi Arabia, half for 2017-18 and half for 2018-19.

Other Markets:

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

Corn:

At 8 a.m. CDT, USDA announced 5.5 million bushels of optional-origin corn was sold to Saudi Arabia, half for 2017-18 and half for 2018-19. July corn was unchanged earlier Wednesday, holding near its highest prices in nine months while both, the satellite map and seven-day forecast remain mostly dry across Brazil. Here in the U.S., rain is falling around the northern Plains with chances for more the next seven days. That will keep northern planting progress slow again this week while the eastern Midwest and southwestern Plains will see lighter amounts. In spite of a slower planting pace in the northern states and dry conditions in the western Plains, subsoil moisture is adequate for much of the Corn Belt, giving row crops a good start on the new season. As corn prices continue to get support from Brazil's dry weather, the trends remain up for both, July corn and new-crop corn. DTN's National Corn Index closed at $3.71 Tuesday, still near its highest price in 23 months and priced 34 cents below the July contract. In outside markets, the June U.S. dollar is up 0.43 while the yield on 10-year T-notes keeps inching higher, now at 3.06%.

Soybeans:

July soybeans were up a penny early Wednesday, helped by an early show of noncommercial buying after China put plans for its proposed soybean tariff on hold over the weekend. So far, the much-advertised progress of trade talks with China has been short on details and it is not clear how long the goodwill may last, but at least for a while, bearish pressure on prices has eased. It is still difficult to make a bullish case for old-crop soybeans while China consumes Brazil's record harvest the next several months. Here in the U.S., soybean planting is going well. As mentioned above, subsoil moisture is starting out in good shape across the Midwest, offering no serious early threats. Fundamentally, USDA's estimate of old-crop ending soybean stocks is under pressure to go higher. Technically, the trend is down in July soybeans, but sideways in new-crop soybeans where futures spreads continue to show a bullish commercial outlook. DTN's National Soybean Index closed at $9.63 Tuesday, up from its lowest prices in three months and priced 68 cents below the July contract.

Wheat:

July Chicago wheat was up a penny and July K.C. wheat was up 1 1/4 cents early Wednesday, keeping an up, down pattern this week as traders wrestle with a forecast of hot temperatures for the southern Plains on one hand and mostly favorable world wheat conditions on the other. Winter wheat prices have received impressive benefit from southwestern drought in early 2018, but prices are now near their 2017 highs. As bad as U.S. winter wheat conditions are, it is difficult to make a case for higher prices while the world's other wheat regions are doing well. So far, production threats outside of North America are low, but the year is still young. Kansas is expecting light to moderate rain amounts the next seven days, but Oklahoma and Texas remain dry with temperatures in the 90s or more this weekend. Technically, the trends remain higher for the July contracts of both, Chicago and K.C. wheat. DTN's National SRW index closed at $4.91 Tuesday, down from its highest price in ten months and 31 cents below the July contract.

Todd Hultmancan be reached at todd.hultman@dtn.com

Follow him on Twitter: www.twitter.com/ToddHultman1

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