DTN Early Word Grains

6:00 a.m. CME Globex:

July corn was down 2 3/4 cents, July soybeans were down 15 1/2 cents, and July Kansas City (HRW) wheat was down 6 1/4 cents.

CME Globex Recap:

AP News reported President Trump approved roughly $50 billion of new tariffs on China, a move that is expected to result in retaliatory tariffs on U.S. soybeans and has the Dow Jones futures trading lower overnight. The June U.S. dollar index is quietly lower and nearly all commodities are starting Friday lower.

OUTSIDE MARKETS:

Thursday's trading saw the Dow Jones Industrial Average drop 25.89 points to 25,175.31 while the S&P 500 was up 6.86 points to 2,782.49, while the 10-year Treasury yield ended at 2.95%. Early Friday, DJIA futures were down 153 points. Asian markets were mixed with Japan's Nikkei 225 up 113.14 points (0.5%) and China's Shanghai Composite down 22.26 points (-0.7%). European markets were also mixed with London's FTSE 100 down 52.35 points (-0.7%), Germany's DAX up 2.75 points (0.02%), and France's CAC 40 up 18.97 points (0.3%). The euro was up 0.0007 and the U.S. dollar index was down 0.11 to 94.77. June 30-year T-Bonds were up 10/32nds while August gold was down $5.30 to $1,303.00 and August crude oil was down $0.11 at $66.58. China's Dalian soybeans were steady to lower and Malaysian palm oil futures showed no new trades on Friday.

	BULL		BEAR
1)	USDA's lower estimate of world ending corn stocks estimate looks reasonable in spite of questionable U.S. estimates.	1)	Good growing weather in the U.S. has sparked a run of selling in row crops and the downward momentum has proved difficult to stop.
2)	Bullish arguments for soybeans have come down to hoping for a hot and dry U.S. summer.	2)	If good weather was the match, heavy net long positions among noncommercials have been the fuel behind the latest downtrends in corn and soybeans. Talk of new tariffs is not helping matters.
3)	The forecast for southern Russia is still mostly dry, but may not be enough to support wheat prices.	3)	Outside of Kansas, Oklahoma, and Texas, U.S. wheat conditions are in good shape with rain expected across the northern Plains this week.

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MORE COMMODITY-SPECIFIC COMMENTS

CORN July corn is down 2 3/4 cents early Friday, trading at new contract lows with bearish influence from the latest tariff news and soybeans' lower prices. At the same time, the seven-day forecast from the National Weather Service expects a hot weekend, but also a broad coverage of rain over most of the central U.S., including the dry western Plains. A heat advisory is in effect Friday for Iowa, Illinois, and northern Missouri. Outside the U.S., northern China is getting some beneficial rain, while Brazil remains dry. Crop conditions have been favorable early, but corn's critical pollination stage is expected to start happening in early July. Much depends on weather and for now, the trend in corn futures clearly remains down.

SOYBEANS July soybeans are down 15 1/2 cents early Friday, trading at their lowest prices in over two years after AP News reported President Trump approved more tariffs against roughly $50 billion of Chinese goods, a move that is expected to result in a retaliatory tariff on U.S. soybeans. In the immediate future, that doesn't change much for soybeans as China hasn't been purchasing much lately anyway. However, it is still unsettling to have this much contention with the world's largest soybean buyer. Argentina's drought was this year's one bright spot for soybean bulls, but since late May, this market has had no bullish arguments to counter numerous bearish concerns and the result has been one-way selling, a dangerous and potentially volatile dynamic for soybean prices. For now, the trend remains obviously down with noncommercials pressured to liquidate.

WHEAT July K.C. wheat is down 6 1/4 cents early, starting a third day lower, but still holding above its May low of $5.02 1/2. Hot temperatures continue to plague the southwestern Plains while wheat is being harvested and now, the seven-day forecast from the National Weather Service is showing moderate to heavy rain amounts up and down the western Plains after months of mostly going without. The rain will also cover several spring wheat areas and help keep crop conditions favorable next week. Outside the U.S., southern Russia is the main dry weather concern while Ukraine received beneficial showers this week and Europe appears to be in good shape. Technically, the trend in winter wheat remains choppy to higher. However, the weekly stochastic is showing a bearish change in momentum that coincides with seasonal highs that typically arrive around early July.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.33	-$0.13	-$0.30	Jul	$0.004
Soybeans:	$8.64	-$0.09	-$0.63	Jul	-$0.004
SRW Wheat:	$4.78	-$0.15	-$0.24	Jul	$0.003
HRW Wheat:	$5.12	-$0.15	-$0.11	Jul	$0.013
HRS Wheat:	$5.63	-$0.07	-$0.15	Jul	-$0.002

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

Todd can be followed throughout the day on Twitter @ToddHultman1

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