DTN Closing Grain Comments

General Comments:

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

The September U.S. dollar index is down 0.29 at 94.42. August gold is down $2.60 at $1,271.90 while July silver is up 4 cents and July copper is down $0.0075. The Dow Jones Industrial Average is down 150 points at 24,533. August crude oil is up $0.25 at $65.96. August heating oil is down $0.0297 while August RBOB gasoline is down $0.0117 and August natural gas is unchanged.

Corn:

July corn closed up 2 3/4 cents at $3.57 Thursday, gradually working higher from the low point of Tuesday's panicked selling simply because prices probably went too low and there is still plenty of important growing season ahead. Local areas of flooding are getting more attention around the Midwest with the National Weather Service (NWS) posting a flash flood watch around northern Illinois and a flood advisory around southwestern Minnesota. Overall, the rain will still be seen as beneficial to row crops, but NWS expects more heavy amounts the next seven days, so stay tuned. Meanwhile, Brazil's forecast remains dry and another reduction in the crop estimate may be ahead. On the demand side, USDA said last week's export sales and shipments of corn totaled 6.5 and 69.4 million bushels respectively, hitting extremes on either end that we're calling neutral, overall. Total corn shipments of 1.66 billion bushels are below pace to meet USDA's export estimate in 2017-18, but still have a chance to improve the next 2 1/2 months. Technically, the trend remains down for corn, but we have to wonder if Tuesday's low will hold as support. DTN's National Corn Index closed at $3.28 Wednesday, up from its lowest price in four months and 26 cents below the July contract. In outside markets, August crude oil is up 25 cents a barrel ahead of Friday's OPEC meeting and other commodities are mixed.

Soybeans:

July soybeans fell another 9 cents Thursday to $8.80 1/2, another new two-year low for the spot price while the July 6 tariff deadline approaches and neither China or the U.S. are flinching. $200 billion of new U.S. tariffs, if they happen, are likely to bring about more retaliatory moves from China and so far, no progress on the issue of intellectual property rights is being reported. That puts soybeans in a high stakes crossfire and it is no surprise that potential buyers are staying away, leaving prices vulnerable to further losses. USDA's weekly report of export sales included a small sales reduction from China that was transferred to Vietnam, but otherwise there was no mention of the world's largest soybean buyer. Last week's sales and shipments totaled 11.1 and 36.4 million bushels, a neutral combination that put total soybean shipments down 8% from a year ago. Thursday's U.S. Drought Monitor showed worsening drought in northern Missouri, an area where soybean crops aren't doing as well. The five-day forecast expects good rain coverage across the Midwest, south of North Dakota, but only light amounts are expected in northern Missouri. Technically, the trend remains down for soybeans with the July contract near its lowest spot prices in over two years. The November contract, at $9.01 1/2 has fallen below its 2017 low of $9.07. DTN's National Soybean Index closed at $8.27 Wednesday, at its lowest price in two years and priced 62 cents below the July contract.

Wheat:

September Chicago wheat closed up 7 cents and September K.C. wheat closed up 4 1/4 cents at $5.10 Thursday with evidence of more commercial buying. SRW wheat areas are currently wet or soaking and in the path of more moderate to heavy rain amounts the next seven days, causing not just harvest delay, but also increased quality concerns. This unexpected rise in Chicago prices follows a new two-month low made Tuesday and doesn't change the downtrend, but certainly challenges it. The usual areas of southern Russia and parts of Australia are still dry, but world wheat production still does not seem significantly threatened in 2018-19. In spite of Chicago wheat's recent move higher, the trends for all three wheats remain down as we near the time of year when wheat prices typically turn lower. DTN's National SRW index closed at $4.67 Wednesday, up from its lowest price in a month and 21 cents below the July contract. DTN's National HRW index closed at $4.83, near its lowest price in a month.

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

Follow Todd Hultman on Twitter @ToddHultman1

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