DTN Closing Grain Comments

Grains Continue to Fall

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was down 6 1/2 cents in the July contract and down 5 3/4 cents in the December. Soybeans were down 7 1/2 cents in the July contract and down 6 cents in the November. Wheat closed down 14 1/2 cents in the July Chicago contract, down 15 3/4 cents in the July Kansas City and down 16 1/2 cents in the July Minneapolis contract.

The June U.S. dollar index is down 0.65 at 94.14. August gold is up $1.70 at $1,305.80, while July silver is up 14 cents and July copper is up $0.0040. The Dow Jones Industrial Average is down 316 points at 24,676. July crude oil is up $1.53 at $68.26. July heating oil is up $0.0424, while July RBOB gasoline is up $0.0324 and July natural gas is down $0.024.

Corn:

July corn fell 6 1/2 cents to $3.93 1/2 Wednesday, a new one-month low with bearish pressure coming from broad rain coverage in the seven-day forecast and a favorable initial crop rating from USDA. Late Tuesday, USDA said 92% of corn was planted and 72% was emerged, now slightly ahead of schedule. The only remaining planting delays are in Michigan and Pennsylvania. USDA also said 79% of corn was rated good-to-excellent. The resulting DTN Corn Condition Index of 188 was the highest initial score since 2007. Weather will decide, but Tuesday's outside bearish reversal in corn futures, plus Wednesday's extended selling, makes it possible that last week's high will stand as this year's seasonal high for cash corn prices. The one bullish factor for corn continues to be dry weather in Brazil where the seven-day forecast shows a chance for light showers in the southern region, but still no rain in Mato Grosso. The trends are currently up for both, old-crop and new-crop corn and are also being challenged this week. DTN's National Corn Index closed at $3.67 Tuesday, down from its highest price in 23 months and 33 cents below the July contract. In outside markets, the June U.S. dollar index is down 0.65, while Italy remains a source of concern, not only for the euro, but also for the Fed's plans to raise interest rates. The U.S. Commerce Department said real GDP was up 2.8% in the first quarter from a year ago, slightly less than expected.

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Soybeans:

July soybeans closed down 7 1/2 cents at $10.23, still holding roughly sideways on a day that saw grains under bearish pressure. July soybean oil offered some support, closing up 0.27 cent, while July meal was down $3.30. Late Tuesday, USDA said 77% of soybeans were planted and 47% were emerged, well ahead of their five-year averages and showing no early crop concerns. With weather providing a favorable start for the new row-crop season, prevented plantings should be low, which means that both, corn and soybean acres could receive higher estimates from USDA in the June 29 Acreage report. Technically speaking, the sideways trend in Nov soybeans is holding firm and new-crop spreads show active commercial support. The trend in July soybeans is also sideways, but lacks the same commercial support in spreads while old-crop exports and trade talks with China remain bearish concerns. DTN's National Soybean Index closed at $9.65 Tuesday, priced 65 cents below the July contract and staying below major resistance at $10.00.

Wheat:

July Chicago wheat closed down 14 1/2 cents and July K.C. wheat was down 15 3/4 cents Wednesday, pressured by commercial selling as prices continue to retreat from Tuesday's test of new 10-month highs. Late Tuesday, USDA said 73% of winter wheat was headed, getting closer to harvest. 38% of the winter crop was rated good-to-excellent, resulting in DTN's Winter Wheat Condition Index of 64, which is still the lowest crop rating since 2014. USDA also said 91% of spring wheat was planted, now slightly ahead of its five-year average pace after enduring a slow start. 63% of U.S. spring wheat has emerged, close behind the five-year average of 68%. Wednesday's seven-day forecast is still on the dry side for the southwestern Plains, but has beneficial rains for spring wheat crops in the northwestern U.S. Plains and in the western Canadian Prairies. Technically, the trends are still higher for all three wheats, but sideways trends may be more likely after prices failed to sustain recent new highs. DTN's National SRW index closed at $5.07 Tuesday, down from its highest price in 10 months and 30 cents below the July contract. DTN's National HRW index closed at $5.22, near its highest price in over two years.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman