DTN Before The Bell Grain Comments

Grain Futures to Resume Trading at 8:30 a.m. CDT

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN photo by Greg Horstmeier)

Early Word Grain comments are still current as U.S. grain futures don’t begin trading until 8:30 a.m. CDT Thursday.

Morning CME Globex Update:

With new rounds of tariffs from the U.S. and China set to be sprung on Friday, Asian stock markets are lower while U.S. and European stocks are trading higher. Commodities are broadly mixed with August crude oil modestly higher. U.S. grain futures begin trading again at 8:30 a.m. CDT.

Other Markets:

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

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Corn:

December corn finished up 5 1/4 cents Tuesday at $3.64 1/4 and will start trading again at 8:30 a.m. CDT on Thursday. Scattered showers fell across the central Corn Belt Wednesday with 90 degree temperatures reaching as far north as southern Iowa. The latest forecast is mostly dry for the Corn Belt the next ten days with rain expected along Gulf coast and Atlantic coast states the next seven days. Temperatures are expected to stay above normal, but probably won't be hot enough to significantly hurt yields. Technically, the trend in corn is still down and noncommercial net longs remain a bearish concern. However, USDA's outlook for lower world corn supplies in 2018-19 should help prices find support above last year's lows. DTN's National Corn Index closed at $3.19 Tuesday, up from a new 2018 low and 33 cents below the September contract. There were 281 delivery intentions for July corn early Thursday. USDA reported 137,000 mt of optional origin corn sales for delivery to South Korea during the 2018-2019 marketing year.

Soybeans:

November soybeans closed down 5 1/4 cents Tuesday at $8.64 1/4, finding it difficult to attract buying interest ahead of expectations for Friday's new tariffs from the U.S. and China. Friday's tariffs include a new 25% penalty against U.S. soybeans and other goods on Friday and threats of even more tariffs ahead. The concern, of course, is where this is all headed and how it will affect long-term trade with the world's largest soybean buyer. China is still expected to need U.S. soybeans this fall, so much of how this plays out is still dependent on U.S. weather. So far, the weather has been good enough to give the soybean crop a 71% good-to-excellent crop rating, which points to another large harvest this fall. However, the crop is not in yet as favorable weather will still be needed at pod-filling time in August. With weather uncertainty still ahead and anxiety building ahead of Friday's tariff deadline, soybean prices have plenty of potential for increased volatility this summer and so far, the trend in soybeans remains down. DTN's National Soybean Index closed at $7.87 Tuesday, at its lowest price in over nine years and priced 61 cents below the August contract. Among July contracts, delivery intentions totaled 468 for soybeans, 1,046 for soybean oil, and still none for meal early Thursday.

Wheat:

September K.C. wheat finished up 13 1/4 cents at $4.84 on Tuesday, still finding situations around the globe that remind us weather risk is still in play. Most recently, wheat prices in France jumped to their highest levels in nearly three years as moisture has been lacking in France and north-central Europe the past few months. Spring wheat crops in Siberia are also not doing well after a cold start to their season. Overall, it is still difficult to say that global wheat production will be down more than 3% from last year's record production so wheat supplies are still expected to be high. Here in the U.S., the spring wheat crop remains in excellent condition. The Jul/Sep Chicago futures spread showed a jump in commercial buying interest for SRW wheat, which also coincides with only two deliveries being made so far in July Chicago wheat. The trends remain down for all three wheats, but there is enough uncertainty to still encourage two-way trading in winter wheat. DTN's National SRW index closed at $4.65 Tuesday, up from its lowest price in two months and 26 cents below the September contract. DTN's National HRW index closed at $4.61, up from its lowest price in two months. Delivery intentions for July contracts totaled 22 for K.C. wheat and none for either Chicago or Minneapolis wheat.

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

FollowTodd on Twitter @ToddHultman1

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Todd Hultman