DTN Closing Grain Comments

General Comments:

Corn was up 3 3/4 cents in the July contract and up 3 1/4 cents in the December. Soybeans were up 8 3/4 cents in the July contract and up 9 3/4 cents in the November. Wheat closed up 9 1/2 cents in the July Chicago contract, up 11 1/4 cents in the July Kansas City, and up 9 cents in the July Minneapolis contract.

The June U.S. dollar index is up 0.54 at 94.06. June gold is down $1.10 at $1,290.90 while July silver is down 15 cents and July copper is down $0.0635. The Dow Jones Industrial Average is down 33 points at 24,802. July crude oil is down $0.49 at $71.71. July heating oil is up $0.0060 while July RBOB gasoline is down $0.0150 and July natural gas is up $0.019.

Corn:

July corn closed up 3 3/4 cents at $4.08 1/2 Wednesday, the highest close in nine months, thanks to dry weather in Brazil. Wednesday's satellite map plus the seven-day forecast for Brazil shows no significant moisture in view, keeping the second corn crop under stress. This should eventually translate into more export business for the U.S., but this month's activity has been slow. At 8 a.m. CDT, USDA made its first corn sale announcement in May, but possibly not for the U.S., with 5.5 million bushels (140,000 mt) of optional-origin corn sold to Saudi Arabia, half for 2017-18 and half for 2018-19. Here in the U.S., there is plenty of old-crop corn in storage and planting is going well overall, even though northern states are still catching up. With support continuing to come 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 higher, trading up 0.54 after a survey from IHS Markit showed slower-than-expected growth in the eurozone in May.

Soybeans:

July soybeans closed up 8 3/4 cents at $10.39 1/4, benefiting a third consecutive day while China's tariff threat remains on hold. As helpful as that news has been to the market, it doesn't yet solve the larger bearish problem for old-crop soybeans, which is that there isn't much demand for U.S. soybeans this summer after Brazil just pulled in a record harvest, but we have to note that Brazil's truckers are on strike, protesting higher fuel costs. That could help prices trade a little higher, but these strikes seldom last long or have significant impact on soybean prices. Thursday morning's export sales report may show increased soybean shipments but also may not show last Friday's announcement of a 30 million bushel (mb) cancellation of an old-crop sale from unknown. 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 closed up 9 1/2 cents and July K.C. wheat was up 11 1/4 cents at $5.51 3/4, climbing higher again while the forecast expects temperatures well into the 90s in the southwestern Plains this weekend. Wednesday's bullish influence also spread to spring wheat where September Minneapolis wheat closed up 8 cents to $6.46 3/4 and near its six-month high. If we knew nothing about wheat fundamentals, we would say that these are bullish-looking charts, but it is difficult to ignore old-crop ending stocks-to-use ratios at their highest levels in three decades for both the U.S. and the world. It is also difficult to get too bullish when wheat regions outside of North America appear in good shape, except for a dry early start in Australia. Technically, the trends are currently higher for all three wheats. DTN's National SRW index closed at $4.91 Tuesday, down from its highest price in 10 months and 31 cents below the July contract. DTN's National HRW index closed at $4.88, down from its highest price in over two years.

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

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

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