DTN Closing Grain Comments

Corn, Wheat Tumble Lower as Crops Look Good

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was down 6 1/4 cents in the September contract and down 6 1/4 cents in the December. Soybeans were unchanged in the August contract and down 1/2 cent in the November. Wheat closed down 16 cents in the September Chicago contract, down 11 1/4 cents in the September Kansas City and down 10 1/2 cents in the September Minneapolis contract.

The September U.S. dollar index is up 0.05 at 93.86. August gold is down $3.00 at $1,256.30 while September silver is down 3 cents and September copper is down $0.0150. The Dow Jones Industrial Average is up 111 points at 24,888. August crude oil is up $0.14 at $73.99. August heating oil is up $0.0206 while August RBOB gasoline is up $0.0112 and August natural gas is down 0.040.

Corn:

December corn narrowly survived an attempt to post a new contract low Tuesday, closing down 6 1/4 cents at $3.60 3/4. Mostly favorable growing weather continues to take a toll on prices and late Monday, USDA said 37% of corn was silking and 75% of the crop was rated good to excellent, slightly below where the record high 2016 corn crop was at this time. Crops do show some problems in Missouri, Kansas and Texas where the weather has been dry and there are the flooding issues in the northwestern Corn Belt. However, summer temperatures are not looking excessively hot this week and appear to be helping crops get through pollination. More unwelcome rain is in this week's forecast for the north-central Midwest. On the demand side, USDA said 4.5 million bushels (mb) (113,000 metric tons) of U.S. corn were sold to Egypt, 2.4 mb (60,000 mt) of which were for 2017-18 and the remainder for 2018-19. USDA also said a previous sale of nearly 6 mb (152,000 mt) of sorghum to Mexico was cancelled for 2017-18. For now, the trend remains down for December corn and the hope of support at $3.60 has been lost. DTN's National Corn Index closed at $3.22 Monday, up from a recent 2018 low and 32 cents below the September contract. There were 243 delivery intentions for July corn early Tuesday. In outside markets, the September U.S. dollar index is fairly quiet, trading up 0.05 while outside commodities are mixed.

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Soybeans:

November soybeans ended down a half-cent at $8.71 1/2 Tuesday, not taking the news from Monday's Crop Progress report as hard as corn did. USDA said 47% of soybeans were blooming and 71% of the soybean crop was rated either good or excellent. That was the same at this time in 2016 when soybeans posted a yield of 52.0 bushels an acre. Weather is expected to stay mostly favorable for soybeans the next seven days with a broad rain coverage across the Midwest, but heavier amounts are in store for flooded areas around northwestern Iowa and southern Minnesota. Monday's CFTC data showed commercials increased net-long positions to 34,663 and noncommercials turned net short for the first time since January. Commercials continue to find value at soybeans' lower prices, suggesting support may be near. For now, the trend remains clearly down for soybeans with trade issues an ongoing concern. DTN's National Soybean Index closed at $7.96 Monday, still near its lowest price in over nine years and priced 60 cents below the August contract. Among July contracts, delivery intentions totaled 478 for soybeans, 869 for soybean oil, and still none for meal early Tuesday. 1,604 July soybean meal contracts were open as of early Tuesday.

Wheat:

September Chicago wheat closed down 16 cents and September K.C. wheat was down 11 1/4 cents at $4.94 3/4, saving a little bit of last week's gain after two days lower as wheat prices struggle to find bullish arguments. Late Monday, USDA said 63% of winter wheat was harvested, on its usual schedule. In Kansas, 92% of the crop was out. More to the north, 81% of spring wheat was headed and 80% of the crop was rated good to excellent, the highest rating since 2010. CFTC data shows commercials net-long 10,892 contracts of HRS wheat, the most since August, 2016 and a sign that prices should be getting close to support. The possibility of support feels difficult to believe with spring wheat crops looking so good and world wheat production looking like this year's total may only be down about 3% from last year's record crops. However, Tuesday's close of $5.37 1/2 in September Minneapolis wheat is only a nickel above last year's low of $5.32 1/2 for the September contract. For now, the trends for all three wheat futures remain down while weather risk is still in play. DTN's National SRW index closed at $4.83 Monday, less than 30 cents below its 2018 high and 25 cents below the September contract. DTN's National HRW index closed at $4.84, up from its lowest price in two months. Trading in July wheat contracts has become dangerously thin and delivery intentions totaled 77 for K.C. wheat and none for either Chicago or Minneapolis wheat early Tuesday.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman