DTN Closing Grain Comments
Grains Dive Lower as Investors Shun Markets
Corn was down 12 3/4 cents in the July contract and down 12 1/4 cents in the December. Soybeans were down 10 cents in the July contract and down 10 1/2 cents in the November. Wheat closed down 21 cents in the September Chicago contract, down 17 3/4 cents in the September Kansas City and down 9 3/4 cents in the September Minneapolis contract.
The September U.S. dollar index is up 0.46 at 94.81. August gold is down $11.60 at $1,242.90 while July silver is down 36 cents and July copper is down $0.0225. The Dow Jones Industrial Average is down 70 points at 24,201. August crude oil is up $0.09 at $74.24. August heating oil is down $0.0432 while August RBOB gasoline is down $0.0346 and August natural gas is down 0.063.
December corn fell 12 1/4 cents to $3.59 Monday, another new low in 2018 as prices succumb to high-crop ratings and bearish response of investors to increased tariffs. Flooding will still be an issue from northwestern and north-central Corn Belt where there are more chances for rain the next seven days. The central Corn Belt will be drier with Iowa temperatures occasionally hitting the 90s, while the 80s will be more common in the Eastern Corn Belt with moderate rain expected to keep USDA's crop ratings high. On the demand side, Friday's report of 5.3 billion bushels (bb) of corn in storage on June 1 was bearish and suggests corn's ending stocks are roughly 200 million bushels (mb) too low. Early Monday, USDA said 60.5 mb of corn were inspected for export, putting the 2017-18 total down 6% from a year ago. Friday's CFTC data showed noncommercials still bullish in corn, but net-longs fell from 264,922 to 181,349 as of June 26, a long, overdue response to June's lower corn prices. For now, the trend remains down for corn while the June low of $8.64 1/2 is holding support. DTN's National Corn Index closed at $3.24 Friday, near its lowest price in five months and 35 cents below the September contract. There were 912 delivery intentions for July corn early Monday. In outside markets, the September U.S. dollar index is up 0.046 after ISM's index of U.S. manufacturing activity increased to 60.2 in June, more than expected.
November soybeans had a roller coaster day, starting higher and later finishing down 10 1/2 cents at $8.69 1/2, another new two-year low. The most obvious difference between corn and soybeans that changed on Friday was in CFTC's Commitment of Traders report. While noncommercials in corn are still carrying plenty of net-longs, noncommercials in soybeans have net-longs down to just 1,285 contracts as of June 26. The bullish kicker is that commercials turned net-long in soybeans for the first time since February, holding 28,998 contracts. Yes, soybeans can still trade lower, especially with China set to enact its 25% tariff against U.S. soybeans Friday, but commercials going long at least suggests that prices should be closer to finding support after dropping roughly $1.80 from their highs in May. Monday's weekly report showed 31.2 mb of soybeans inspected for export last week, enough to bring this season's inspections pace in line with USDA's estimate for a 5% decline. Technically, the trend remains down for soybeans with recent hints of possible support. DTN's National Soybean Index closed at $8.00 Friday, at its lowest price in over two years and priced 64 cents below the August contract. Among July contracts, delivery intentions totaled 929 for soybeans, 1,470 for soybean oil and none for meal early Monday.
September Chicago wheat closed down 21 cents and September K.C. wheat was down 17 3/4 cents at $4.70 3/4, both giving up earlier gains and heading south after Monday's 8:30 a.m. re-opening bell. If you read Monday's Early Word Grain comments, it was difficult to explain why wheat prices were higher early other than recent commercial buying in Chicago wheat suggested an unexpected interest in short-term demand. By Monday's close, the larger picture prevailed as world wheat production appears to be doing well in 2018 outside of three states in the U.S., parts of Australia and Canada, eastern Ukraine and southern Russia. Friday's CFTC data showed noncommercials with a modest net-long position of 15,625 contracts in Chicago wheat. Commercials were also net-long, holding 2,263 contracts as of June 29. With winter wheat being harvested, the trends for all three wheat futures remain down. DTN's National SRW index closed at $4.77 Friday, up from its lowest price in two months and 24 cents below the September contract. DTN's National HRW index closed at $4.72, near its lowest price in two months. Delivery intentions for July contracts totaled one for Chicago wheat, 252 for K.C. wheat and 81 for Minneapolis wheat.
Todd Hultman can be reached at firstname.lastname@example.org
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