DTN Closing Grain Comments

General Comments:

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

The June U.S. dollar index is down 0.07 at 94.04. August gold is down $1.90 at $1,304.60 while July silver is down 9 cents and July copper is down $0.0120. The Dow Jones Industrial Average is down 300 points at 24,368. July crude oil is down $1.52 at $66.69. July heating oil is down $0.0354 while July RBOB gasoline is down $0.0283 and July natural gas is up $0.064.

Corn:

July corn ended up 1/2 cent at $3.94 on a quiet day of trading in the grain sector. USDA's weekly export sales report, normally released on Thursday, will come out early Friday, due to this week's holiday. Corn shipments have been up lately, but sales have been suspiciously low, even while dry weather continues to shrink Brazil's corn crop estimates. The seven-day forecast remains mostly dry for Brazil, except for light to moderate rain around the southern state of Parana. Here in the U.S., corn crops in the northern Plains and central Corn Belt will benefit from moderate rain amounts the next three days, but conditions will then turn dry with hotter temperatures, starting early next week. Thursday morning, the U.S. Energy Department said ethanol production increased from 1.028 million to 1.041 million barrels last week. Ethanol inventory dropped from 22.1 million to 21.3 million barrels as seasonal demand picks up. Fundamentally speaking, the outlook for corn prices depends on weather and if a decent crop is raised, prices will likely be similar to the previous three years. Technically, the trends in corn are currently up for both old-crop and new-crop corn, but getting close to support. DTN's National Corn Index closed at $3.60 Wednesday, 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 0.07 and other commodities are mostly lower ahead of Friday's U.S. unemployment report.

Soybeans:

July soybeans were down 4 1/2 cents to $10.18 1/2 Thursday, their third consecutive drop this week as it continues to be difficult to make a bullish argument for old-crop soybeans. U.S. Commerce Secretary Ross is supposed to return to China this weekend for more talks, but with the U.S. enacting new tariffs, the two sides still seem far apart. In May, the FOB price of soybeans dropped substantially in Brazil, now trading even with the FOB price in New Orleans and showing no concern about obtaining supplies while the country deals with a truck strike. Next week's forecast for hotter temperatures in the central and western Midwest may offer soybeans some support, but so far, early crop conditions are mostly favorable and there is a risk that both corn and soybean acres will be higher than USDA's planting estimates in March. Technically speaking, the sideways trend in November soybeans is still holding firm and the November/March spread still shows a bullish inverse. The trend in July soybeans is also sideways but lacks the same commercial support, while demand for old-crop soybeans remains a bearish concern. DTN's National Soybean Index closed at $9.58 Wednesday, priced 65 cents below the July contract and staying below major resistance at $10.00.

Wheat:

July Chicago wheat closed up 4 1/4 cents and July Kansas City wheat was up 1 3/4 cents at $5.42 1/2, both finding a little support after being rejected from Tuesday morning's new 10-month highs. Thursday's U.S. Drought Monitor showed a little moisture improvement in the Texas Panhandle and northwestern Kansas, but the slight benefit seems doomed with triple-digit temperatures expected Thursday and Friday, and possibly returning again next week. Conditions turned drier in North Dakota and central Texas the past week, but spring wheat crops in the Northern Plains and western Canadian Prairies are expecting beneficial rains the next few days. Outside of North America, wheat production concerns seem minor so far. Australia remains dry in the south and east, and China's wheat is too wet as it nears harvest. Fundamentally speaking, unless more weather problems arise, it will be difficult for wheat prices to go much higher from here. Technically, the trends are currently up for all three wheats. However, this week's price failures at old highs may make sideways trends more likely in June. DTN's National SRW index closed at $4.92 Wednesday, down from its highest price in 10 months and 30 cents below the July contract. DTN's National HRW index closed at $5.07, down from its highest price in over two years.

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

Follow Todd Hultman on Twitter @ToddHultman1

(BE)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.