DTN Before The Bell Grain Comments

Morning CME Globex Update:

July contracts of corn, soybeans, and all three wheats were lower early Wednesday with rain in this week's forecast expected to benefit row crops and spring wheat while the southwestern U.S. Plains remains dry.

Other Markets:

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

Corn:

July corn was down 2 3/4 cents early Wednesday, encountering more selling after Tuesday's outside reversal and favorable Crop Progress report. USDA said 92% of corn was planted and 72% was emerged, now slightly ahead of schedule. Planting delays are no longer a concern, except in Michigan and Pennsylvania. USDA also said 79% of corn was rated good-to-excellent, resulting in a DTN Corn Condition Index of 188, the highest initial score since 2007. Keep in mind that historically, high early crop ratings don't say much about how the rest of the summer will go. Technically, Tuesday's reversal in corn may mark the seasonal high for the year. Fundamentally, Brazil is still dry with a chance of light rain in the forecast for southern Brazil. The trends in corn are currently up for both, old-crop and new-crop corn. 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 0.54, snapping back from Tuesday's new nine-month high 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.

Soybeans:

July soybeans were down 5 3/4 cents early Wednesday, pressured by Tuesday's U.S. move to increase tariffs and punitive measures against China ahead of this weekend's visit by U.S. Commerce Secretary Ross. Bearish pressure is also coming from a favorable start for the new crop season. Late Tuesday, USDA said 77% of soybeans were planted and 47% were emerged, well ahead of their five-year averages and showing no early concerns. The seven-day forecast expects moderate to heavy rains for the entire Midwest, excluding Kansas and the southwestern U.S. Plains. USDA has estimated 89.0 million acres of soybean plantings, but the final number could be higher as the weather has been too good for prevented plantings to be an issue in 2018. 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 where demand for old-crop soybeans remains a bearish concern. 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 was down 8 cents and July K.C. wheat was down 8 3/4 cents early, falling back more from Tuesday's early challenge of ten-month highs. Late Tuesday, USDA said 73% of winter wheat was headed and 38% of the crop was rated good-to-excellent. DTN's Winter Wheat Condition Index at 64 is still the lowest crop rating since 2014-15 as drought in the southwestern Plains remains a concern with only light rain expected in the region this week. USDA also said 91% of spring wheat is now planted, slightly ahead of its five-year average pace after a slow start in 2018. The only noticeable delay remaining is in Montana where 87% of crops are planted. 63% of U.S. spring wheat has emerged, a little less than the five-year average of 68%. Unlike a year ago, this week's forecast expects moderate to heavy rains in the northwestern U.S. Plains which will also benefit crops in the western Canadian Prairies. Technically, the trends are currently higher for all three wheats. However, prices failed to sustain recent breaks above resistance, which means sideways trends may soon be in store. DTN's National SRW index closed at $5.07 Tuesday, down from its highest price in ten 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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