DTN Before The Bell Grain Comments

Morning CME Globex Update:

July contracts of Chicago and K.C. wheat were modestly higher early Tuesday with more hot temperatures expected in the southwestern U.S. Plains through Friday. Corn and soybeans were starting the week steady to lower. At 8 a.m. CDT, USDA announced 9.1 million bushels (mb) of U.S. corn were sold to unknown destinations, 8.0 mb of which were for 2018-19.

Other Markets:

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

Corn:

At 8 a.m. CDT, USDA announced 9.1 million bushels (mb) of U.S. corn were sold to unknown destinations, 8.0 mb of which were for 2018-19. July corn was unchanged early Tuesday as traders look at another dry satellite map for Brazil and a seven-day forecast that is mostly dry. Southern Brazil may have a chance for rain in the extended forecast, but corn in Mato Grosso remains out of the path of rain chances. Here in the U.S., much of the Corn Belt experienced a hot weekend while the southeastern U.S. contended with heavy rains and flooding. Western Kansas is getting much-needed rain early Tuesday and USDA's Crop Progress report is likely to show increased planting across the northern states, later Tuesday afternoon. With Brazil's second corn crop at risk, Friday's CFTC data showed noncommercials staying bullish in corn, holding 400,338 net longs as of May 22, near the highest total on record. Technically, the trends are currently up for both, July corn and new-crop corn. DTN's National Corn Index closed at $3.73 Friday, near its highest price in 23 months and 33 cents below the July contract. In outside markets, the June U.S. dollar index is trading up 0.55 at its highest prices in three months as political problems in Italy are starting to put bearish stress on the euro.

Soybeans:

July soybeans were down 3 1/4 cents early Tuesday, but still benefiting from last week's bullish momentum, related to hopeful progress in trade talks with China. Brazil's truck strike has been well-publicized lately and put so much strain on the country that President Temer agreed to subsidize 10% of diesel prices for 60 days, reported AP news. FOB soybean prices in Brazil, however, have not shown much impact yet from the transportation problems and are trading 3 cents below FOB prices in New Orleans. Friday's CFTC data showed noncommercials still bullish, but steadily trimming their holdings, from 155,648 to 143,470 as of May 22. For now, the trends are sideways in both, July and new-crop soybeans. New-crop futures spreads continue to show a bullish commercial outlook and November soybeans are near their contract highs. DTN's National Soybean Index closed at $9.76 Friday, priced 66 cents below the July contract and staying below resistance at $10.00.

Wheat:

July Chicago wheat was up 4 1/2 cents and July Kansas City wheat was up 6 1/4 cents at the morning break after a hot weekend in the southwestern Plains, followed by more triple-digit temperatures in the region this week. The seven-day forecast expects moderate rain amounts in the western Plains as far south as Kansas, but continues to look dry for most of the southwestern Plains. Spring wheat in the Dakotas is expecting beneficial rains, but the U.S. winter wheat crop remains extremely stressed and deserves a lower production estimate from USDA. Friday's CFTC data showed noncommercials a little more bullish in Chicago wheat, having increased net-longs from 22,644 to 41,849 as of May 22. Technically, the trends are currently higher for all three wheats with Chicago and K.C. prices near their highest prices in ten months. DTN's National SRW index closed at $5.13 Friday, at its highest price in 10 months and 30 cents below the July contract.

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

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

(KR)

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