DTN Closing Grain Comments

Grains Take a Breather

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

General Comments:

Corn was up 3 cents in the July contract and up 2 3/4 cents in the December. Soybeans were down 1/2 cent in the July contract and up 1 cent in the November. Wheat closed up 4 3/4 cents in the July Chicago contract, up 7 1/2 cents in the July Kansas City and up 3 3/4 cents in the July Minneapolis contract.

The June U.S. dollar index is down 0.21 at 93.78. August gold is up $5.90 at $1,303.20 while July silver is up 10 cents and July copper is up $0.0660. The Dow Jones Industrial Average is down 33 points at 24,780. July crude oil is up $0.63 at $65.38. July heating oil is down $0.0143 while July RBOB gasoline is down $0.0172 and July natural gas is down $0.044.

Corn:

July corn closed up 3 cents at $3.83 3/4 Tuesday, a modest show of support after suffering sharp losses the past five sessions. Brazil's satellite map showed light showers across southern Brazil Tuesday, but the seven-day forecast remains mostly dry for the country's second corn crop. DTN's Ag Weather Brief also noted that conditions have been drier than usual in north and central China, giving corn a new concern to monitor. Here in the U.S., the corn crop is off to a good start. Late Monday, USDA said 97% of corn was planted, 86% was emerged, and 78% of the crop was rated good to excellent. DTN's Corn Condition Index of 188 is the highest score since 1994, which sounds bearish but is still susceptible to change, depending on this summer's weather. Fundamentally, the outlook for corn prices is neutral with plenty of uncertainty early in the new season. Technically, Monday's lower closes turned the trends down for both, old-crop and new-crop corn and added stress to noncommercials caught heavily long. DTN's National Corn Index closed at $3.49 Monday, down sharply from its highest price in 23 months and 32 cents below the July contract. In outside markets, the June U.S. dollar index is down 0.21 while outside commodities are mixed.

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Soybeans:

July soybeans ended down a half-cent at $10.01 1/4 Tuesday, rescued from a test of its low in May by light noncommercial buying. Like corn, the U.S. soybean crop is off to a good start in 2018. USDA said 87% of soybeans were planted, 68% were emerged, and 75% of soybean crops were rated either good or excellent. DTN's Soybean Condition Index started the new season at 180, which ties the highest score since 2010. Also similar to corn, these early crop ratings don't say much about yield at harvest. Keep in mind that 2010 turned out to be a bullish year for soybean prices in spite of the season's bearish start. Meanwhile, no visible progress is being made on the trade front with China, but the November/March spread is maintaining a small bullish inverse, a reflection of commercial interest in new-crop soybeans. Technically, the trends are currently sideways for both, old-crop and new-crop soybeans. DTN's National Soybean Index closed at $9.36 Monday, priced 65 cents below the July contract and staying well below major resistance at $10.00.

Wheat:

July Chicago wheat closed up 4 3/4 cents and July Kansas City wheat was up 7 1/2 cents at $5.29, regaining part of Monday's losses while the southwestern Plains remain dry and Tuesday's temperatures were expected to be hot as far north as South Dakota. Late Monday, USDA said 83% of winter wheat was headed and 5% was harvested, mostly from Texas. DTN's Winter Wheat Condition Index at 61 remains the lowest since 2014. For spring wheat, USDA said 97% was planted, 81% was emerged, and 70% of the crop was rated good to excellent, a favorable start that should get more help from light-to-moderate rain in the seven-day forecast. Outside of North America, western Ukraine and southern Australia remain two concerns with dry conditions, but Europe and southern Russia are mostly favorable, so far. Technically, the trends are still higher for all three wheats, but the charts are not looking so bullish after prices failed to sustain recent tests above resistance. DTN's National SRW index closed at $4.80 Monday, down from its highest price in 10 months and 25 cents below the July contract. DTN's National HRW index closed at $4.91, 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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Todd Hultman