DTN Closing Grain Comments

General Comments:

Corn was down 6 1/4 cents in the September contract and down 6 cents in the December. Soybeans were down 21 3/4 cents in the August contract and down 22 1/2 cents in the November. Wheat closed down 7 1/4 cents in the September Chicago contract, down 7 cents in the September Kansas City and down 10 1/4 cents in the September Minneapolis contract.

The September U.S. dollar index is up 0.05 at 93.81. August gold is up $4.40 at $1,260.20, while September silver is up 8 cents and September copper is up $0.0385. The Dow Jones Industrial Average is up 310 points at 24,767. August crude oil is down $0.22 at $73.58. August heating oil is up $0.0297, while August RBOB gasoline is up $0.0372 and August natural gas is down 0.032.

Corn:

December corn dropped 6 cents to $3.67 Monday, nearly erasing Friday's gain. Friday's higher row crop prices never did have a market-related explanation other than corn rallied in sympathy with traders covering shorts in soybeans. Looking at more substantial influences, Monday afternoon's crop ratings are likely to remain high for corn. While temperatures will turn hotter this week in the western Corn Belt, they probably won't be threatening enough for pollination corn while the central and eastern Corn Belt experience milder readings. The seven-day forecast is mostly dry for the Corn Belt, except for moderate rain chances in the north-central Corn Belt, where the moisture is not needed. Thursday's USDA report is likely to show a higher ending estimate of U.S. corn stocks in 2018-19, boosted by generally favorable weather and a higher-than-expected June 1 corn stocks total than was expected back on June 29. For now, the trend remains down for December corn while the June low of $3.60 is still a potential source of support. DTN's National Corn Index closed at $3.27 Friday, up from a new 2018 low and 33 cents below the September contract. There were 253 delivery intentions for July corn early Monday. In outside markets, the September U.S. dollar index is up 0.05, staying quiet while the Dow Jones Industrial Average is up 310 points.

Soybeans:

November soybeans fell 22 1/2 cents to $8.72 Monday, giving back over half of Friday's 38 3/4 cent gain. Of course, there never was a bullish reason for Friday's higher prices, but that didn't stop the flurry of short-covering ahead of the weekend. Moving forward, we still have a trade war with the world's largest buyer of soybeans and what looks like another big U.S. soybean harvest on the way this fall. On Thursday, USDA will provide its next estimate of this year's U.S. soybean production and the number is likely to be larger than June's 4.28 billion bushel estimate as weather has been mostly favorable. On the demand side, old-crop U.S. soybean exports are down 6% from a year ago without China's eager participation. Early Monday, USDA said 4.85 million bushels (132,000 mt) of U.S. soybeans were sold to unknown destinations for 2018-19. Fundamentally, it is difficult for soybeans to trade higher without help from adverse weather. There is still time for a problem to emerge, but so far, there has been no major threat. Technically, the trend remains down for soybeans with recent hints of possible support from commercial net longs. DTN's National Soybean Index closed at $8.17 Friday, up from its lowest price in over nine years and priced 60 cents below the August contract. Among July contracts, delivery intentions totaled 478 for soybeans, 941 for soybean oil, and still none for meal early Monday. 2,034 July soybean meal contracts remain open as of early Monday.

Wheat:

September Chicago wheat closed down 7 1/4 cents and September K.C. wheat was down 7 cents at $5.06, not finding any new crop threats to report. Last week's prices got a lift from reduced crop estimates in Europe as dry weather has taken a toll. USDA will update its international crop estimates on Thursday, July 12 and new estimates will be interesting to check in Europe, Ukraine and Russia. Parts of Canada could also use rain and this week's forecast looks more promising. In spite of last week's higher prices, the trends for all three wheat futures remain down while weather risk is still in play. DTN's National SRW index closed at $4.89 Friday, up from its lowest price in two months and 26 cents below the September contract. DTN's National HRW index closed at $4.90, up from its lowest price in two months. Trading in July wheat contracts has become dangerously thin and delivery intentions totaled 41 for K.C. wheat and none for either Chicago or Minneapolis wheat early Monday.

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

Follow Todd Hultman on Twitter @ToddHultman1

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