DTN Closing Grain Comments

General Comments:

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

The June U.S. dollar index is up 0.23 at 94.19. August gold is down $5.50 at $1,299.20, while July silver is down 3 cents and July copper is up 0.0275. The Dow Jones Industrial Average is up 195 points at 24,611. July crude oil is down $1.10 at $65.94. July heating oil is down $0.0216, while July RBOB gasoline is down $0.0115 and July natural gas is up $0.006.

For the week:

July corn closed down 14 1/2 cents and December was down 13 1/4 cents. July soybeans were down 20 1/4 cents, while the November was down 15 3/4 cents. July Chicago wheat was down 19 3/4 cents, July Kansas City wheat was down 23 1/4 cents, and July Minneapolis wheat was down 19 3/4 cents.

Corn:

July corn ended down 2 1/2 cents at $3.91 1/2 Friday and was down 14 1/2 cents on the week, weighed down by an early start of favorable crop conditions here in the U.S. North Dakota and Montana were getting rain Friday and more is expected to cross the central Midwest later Friday into Saturday. Early next week, however, conditions will get hotter and drier, challenging USDA's high, 79% good-to-excellent rating. This year's bullish potential for corn continues to come from Brazil where some rain is expected over southern Brazil the next seven days, but Mato Grosso will stay mostly dry. Early Friday, USDA said last week's export sales and shipments of corn totaled 39.1 and 74.6 million bushels respectively, a neutral-to-bullish combination that put total corn shipments down 10% in 2017-18 from a year ago with just over three months to go. Fundamentally, this year's droughts in Argentina and Brazil are giving corn prices a chance to trade higher, but much still depends on U.S. weather. Technically, the trends in corn are currently up for both, old-crop and new-crop corn, but prices are now challenging support at their lows in May. DTN's National Corn Index closed at $3.62 Thursday, down from its highest price in 23 months and 32 cents below the July contract. In outside markets, the June U.S. dollar index is up 0.23 after the U.S. Labor Department said non-farm payrolls increased 223,000 in May, more than expected. The U.S. unemployment rate improved from 3.9% to 3.8% in May.

Soybeans:

July soybeans closed up 2 3/4 cents at $10.21 1/4 Friday and was down 20 1/4 cents on the week, feeling bearish pressure from numerous sources that are mostly related to China's noticeable absence from U.S. soybean markets. U.S. Commerce Secretary Ross leads more trade discussions with China this weekend, but there is nothing being talked about yet to make us believe the two sides are close to any significant agreement. China's 25% tariff threat on U.S. soybeans is still a possibility, but China is also likely to need U.S. soybeans this fall. Earlier Friday, USDA said last week's export sales and shipments of soybeans totaled 10.0 and 23.8 million bushels respectively, a bearish combination for the week that has total soybean shipments down 10% in 2017-18 from a year ago. China was not listed as an old-crop buyer, but new-crop soybean sales of 28.4 million bushels did show China and unknown as the top buyers. Fundamentally speaking, trade talks and weather in a new growing season are providing plenty of early uncertainty, and in that regard, soybean prices are holding up well. Technically, the sideways trend in Nov soybeans is holding firm while new-crop spreads show a weakening of bullish inverses. The trend in July soybeans is also sideways, but lacks the same commercial support as demand for old-crop soybeans remains a bearish concern. DTN's National Soybean Index closed at $9.54 Thursday, priced 65 cents below the July contract and staying below major resistance at $10.00.

Wheat:

July Chicago wheat closed down 3 cents and July K.C. wheat was down 1 3/4 cents at $5.40 3/4, continuing to fall back from Tuesday's failed attempt at new 10-month highs as winter wheat begins its new crop season. The next few days will have beneficial rain for spring wheat crops in Canada and the northwestern Plains, as well as rain for SRW wheat in Illinois, but the southwestern U.S. Plains remains mostly dry with hot temperatures adding insult to winter wheat crops that already have the worst crop condition ratings in four years. The big lid holding down wheat prices is coming from record supplies of old-crop wheat around the world plus a mostly favorable start to the new 2018-19 season. Early Friday, USDA said last week's export sales and shipments of old-crop wheat totaled just 1.1 and 16.3 million bushels respectively, another bearish combination for the week. 10.0 million bushels of new-crop wheat were also sold last week. Export records for 2017-18 have one more week to go and shipments are now down 15% from a year ago. Technically, the trends are currently higher for all three wheats, but a more sideways path may be more likely after prices failed to sustain recent tests above resistance. DTN's National SRW index closed at $4.99 Thursday, down from its highest price in 10 months and 27 cents below the July contract. DTN's National HRW index closed at $5.09 Thursday, 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

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