DTN Before The Bell Grain Comments

Morning CME Globex Update:

A steady U.S. Dollar Index sets the tone for the grain and oilseed markets Monday morning, with traders hesitant to take aggressive new positions before a monthly WASDE report Tuesday, plus potential outside market volatility from interest rate decisions and political summits.

Other Markets:

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

Corn:

Despite panicky headlines out of the weekend's G7 meeting, Sunday night's market activity was relatively subdued, with Asian and European stock markets generally stable, and corn futures dipping only a penny or two. Welcome precipitation has fallen in some crucial areas of the Corn Belt over the past seven days, and Monday afternoon's Crop Progress report is likely to show another batch of incredibly favorable condition ratings for corn. The grain markets may continue to keep a watchful eye on outside market volatility through the week, with expectations for the Federal Open Markets Committee to announce an interest rate hike this Wednesday. Meanwhile, in the old crop cash market, the DTN National Corn Index, an average of cash bids around the country, was $3.46 Friday, showing the national average basis level steady at 32 cents under the July futures contract.

Soybeans:

Monday's trade will be the last full session before the monthly World Agricultural Supply and Demand Estimates from the USDA, so there is likely to be the usual mix of position-squaring and speculative activity ahead of any changes to official yield estimates or demand categories. The soybean futures charts have been dropping by about 12 cents per day lately, so smaller losses Monday make it feel like the bearish momentum is finally waning. Oilseed markets may remain relatively quiet through Monday, but on Tuesday there will be another outside source of volatility: the results of a U.S.-North Korea summit, which could ultimately influence the outlook for broader Asian economic growth and meat animal feed demand. The DTN National Soybean Index was $9.04 Friday, showing the national average basis bid steady at 65 cents under the July futures contract.

Wheat:

Winter wheat harvest continues apace in the United States, and winter wheat development in the Black Sea region continues to struggle with less-than-ideal rain amounts, so global wheat futures prices have no major fundamental market changes to reflect Monday morning. The weekly Crop Progress report could show as much as 20 percent of U.S. winter wheat harvest complete already, given this year's relatively smaller number of harvestable acres. Merchandisers may be expressing some urgency to compete for whatever wheat is available. On Friday, basis bids for HRW wheat strengthened dramatically by 7 cents, on average -- now seen at 20 cents under the July KC contract (average cash bid at $5.18). Soft Red Winter wheat's cash bids averaged $4.94 or 26 cents under the July Chicago contract. Hard Red Spring wheat's cash index was at $5.78 and its average basis bid remained at 15 cents under the July Minneapolis contract.

Elaine Kubcan be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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