DTN Closing Grain Comments

General Comments:

Corn was down 6 3/4 cents in the July contract and down 6 1/2 cents in the December. Soybeans were down 20 cents in the July contract and down 20 3/4 cents in the November. Wheat closed down 13 3/4 cents in the September Chicago contract, down 18 cents in the September Kansas City, and down 9 3/4 cents in the September Minneapolis contract.

The September U.S. dollar index is down 0.24 at 93.94. August gold is down $2.30 at $1,268.40, while July silver is down 14 cents and July copper is down $0.0465. The Dow Jones Industrial Average is down 373 points at 24,208. August crude oil is down $0.34 at $68.34. August heating oil is down $0.0179, while August RBOB gasoline is down $0.0120 and August natural gas is down 0.025.

Corn:

December corn closed down 6 1/2 cents at $3.71 1/2 Monday, pressured by a combination of mostly favorable crop weather and concerns about rising trade hostilities between the U.S. and its trading partners. As I say "mostly favorable crop weather," many will cringe, especially if they are in areas like northwestern Iowa where crops may be under water and a flash flood watch is in effect. Overall, we have to admit we've seen conditions like this before that resulted in big national harvests so traders don't seem convinced yet that we still won't have a large fall crop. The latest seven-day forecast expects a broad coverage of moderate to locally heavy rains across the Corn Belt with temperatures turning hotter later in the week. On the demand side, USDA said 59.5 million bushels of corn were inspected for export last week, putting the 2017-18 total down 7% from a year ago with a little over two months remaining. In addition to favorable crop weather, another bearish concern for corn prices is the slow pace of liquidation among noncommercials. Friday's CFTC data showed noncommercials still holding 264,922 net longs in corn as of June 19, down 21,728 from the previous week. Technically, the trend remains down for corn and last Tuesday's low is a candidate for possible support. DTN's National Corn Index closed at $3.29 Friday, up from its lowest price in four months and 28 cents below the July contract. In outside markets, nearly all commodities and several international stock markets were lower with investors showing increased concerns over the escalating trade war.

Soybeans:

November soybeans dropped 20 3/4 cents Monday to $8.95 1/2 after U.S. President Trump tweeted he wants countries to remove artificial trade barriers and, according to the Wall Street Journal, is moving ahead with plans to ban Chinese companies from investing in U.S. tech firms. The news didn't directly affect soybeans, but maintains a hostile tone with trade partners and is causing investors to have wider concerns about markets in general. Most commodities ended the day lower along with several of the world's stock markets. Here in the U.S., rain fell over the western Plains over the weekend and generous amounts are expected in the seven-day forecast for most of the Midwest. Even though too much rain has been a local concern lately, Monday afternoon's USDA crop ratings are likely to stay high again for corn, soybean and spring wheat crops. Friday's CFTC data showed noncommercials down to 58,179 net longs on June 19, down significantly from their peak of 224,357 in mid-April, but still on the losing end of recent trading and in need of more reductions. On the demand side, USDA said earlier Monday that 18.9 million bushels of soybeans were inspected for export last week, putting total inspections within reach of USDA's export estimate of 2.065 billion bushels. USDA also said 6.8 million bushels (186,000 mt) of U.S. soybeans were sold to unknown destinations for 2017-18, one of the larger old-crop sales we have seen in quite a while. Technically, the trend remains down for soybeans with the November contract falling back near its lowest November prices in over two years. The November contract, at $9.16 1/4 is back above its 2017 low of $9.07. DTN's National Soybean Index closed at $8.33 Friday, near its lowest price in two years and priced 61 cents below the July contract.

Wheat:

September Chicago wheat fell 13 3/4 cents and September K.C. wheat was down 18 cents to $4.87 1/2 with 2018, a new four-month low with wheat crops faring well overall. Southern Russia and eastern Ukraine remain on the dry side, but rain in this week's forecast is expected to help crop conditions in southeastern Australia. Here in the U.S., USDA's spring wheat crop rating will likely stay high in Monday afternoon's Crop Progress report and there is more rain in this week's forecast for the northwestern Plains and western Canadian Prairies. Rain in the southwestern U.S. Plains over the weekend will cause some harvest delay, and wheat quality remains a concern for the wet SRW wheat crop, but speculators are starting to lose their enthusiasm for owning wheat. In Chicago wheat, Friday's CFTC data showed noncommercial net longs were reduced from 49,716 to 18,401 as of June 19 when prices fell to a new two-month low. Commercials are lightly net short 991 contracts, a more neutral position. The trends for all three wheats remain down. DTN's National SRW index closed at $4.70 Friday, up from its lowest price in a month and 21 cents below the July contract. DTN's National HRW index closed at $4.85, 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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