DTN Closing Grain Comments

General Comments:

Corn was down 5 1/2 cents in the July contract and down 4 1/4 cents in the December. Soybeans were down 7 cents in the July contract and down 7 cents in the November. Wheat closed up 9 3/4 cents in the July Chicago contract, up 10 3/4 cents in the July Kansas City and up 1 1/4 cents in the July Minneapolis contract.

The June U.S. dollar index is down 0.21 at 93.66. August gold is down $2.20 at $1,300.00, while July silver is up 14 cents and July copper is up $0.0645. The Dow Jones Industrial Average is up 249 points at 25,049. July crude oil is down $0.70 at $64.82. July heating oil is down $0.0124, while July RBOB gasoline is down $0.0333 and July natural gas is up $0.008.

Corn:

July corn fell 5 1/2 cents to $3.78 1/4 Wednesday, a new three-month low as U.S. crop conditions continue to do well. Wednesday's weather map showed rain around Wisconsin, starting a series of showers that are expected to cover most of the Midwest with moderate amounts the next seven days. Outside the U.S., the seven-day forecast remains dry in Brazil, and northern China is off to a dry start, but neither influence helped Wednesday's corn prices. Wednesday morning, the U.S. Energy Department said last week's ethanol production was unchanged at 1.041 million barrels a day, while ethanol inventory increased from 21.3 to 21.9 million barrels. Ethanol prices are trading near their lowest level in four months, but so far, remain a source of support for corn prices while the ethanol mandate encounters political threats. Fundamentally, there is plenty of uncertainty ahead in the new season, most of which pertains to weather. Technically, Monday's lower close 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, even after the U.S. Commerce Department said the trade deficit fell to $46.2 billion in April, the lowest in seven months.

Soybeans:

July soybeans dropped 7 cents on light volume to $9.94 1/4, within two cents of the May low of $9.92 1/2, an important line of support. Late Tuesday, the Wall Street Journal reported China offered to buy $70 billion of U.S. goods -- including ag products like soybeans -- if the White House would cancel last week's new tariffs. In spite of the offer, there is no sign yet that the two sides are close to an agreement, and the uncertainty continues to weigh on soybean prices. In addition, this year's good start for row crops is also keeping a lid on soybean prices with moderate rain amounts expected across most of the Midwest this week, even including Kansas. With crops doing well early. and U.S. soybean demand still on the negotiating table, it will be difficult for soybean prices to rally until some change occurs. Currently, the sideways trend in both old-crop and new-crop soybeans are holding with new-crop spreads still showing small bullish inverses. DTN's National Soybean Index closed at $9.36 Tuesday, priced 65 cents below the July contract and staying well below major resistance at $10.00.

Wheat:

July Chicago wheat closed up 9 3/4 cents and July K.C. wheat was up 10 3/4 cents at $5.39 3/4, responding to potential problems overseas. Early Wednesday, DTN's Ag Weather Brief said dryness is becoming an increasing concern in Ukraine and southern Russia with warm temperatures expected the next 10 days. It is too early to draw conclusions, but news like that has the potential to make shorts nervous and prices volatile. Here in the U.S., the heat is on in the southwestern Plains, adding late stress to winter wheat before harvest. Meanwhile the U.S. spring wheat crop looks in good shape with rains on the way this week to the northwestern Plains and the western Canadian Prairies. Fundamentally, there is still a lot of uncertainty about how wheat production will go in 2018, and Wednesday's new concerns make wheat prices potentially more volatile. Technically, the trends are still higher for all three wheats, even though prices failed to sustain recent tests above resistance. DTN's National SRW index closed at $4.85 Tuesday, down from its highest price in 10 months and 25 cents below the July contract. DTN's National HRW index closed at $4.99, 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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