DTN Early Word Grains
Crops Doing Well, Prices Staying Lower
December corn was down 2 1/2 cents, November soybeans were down 1 3/4 cents, and September Kansas City (HRW) wheat was down 6 3/4 cents.
CME Globex Recap:Much like Monday, grain prices are starting in the red while other commodities are mixed and major stock markets are mostly higher. Tuesday is expected to be light on news after USDA's Crop Progress report handed out another round of high crop ratings for corn, soybeans, and spring wheat.
OUTSIDE MARKETS:Previous closes on Monday showed the Dow Jones Industrial Average up 320.11 points at 24,776.59 and the S&P 500 up 24.35 points at 2,784.17 while the 10-year Treasury yield ended at 2.86%. Early Tuesday, DJIA futures were up 60 points. Asian markets are higher with Japan's Nikkei 225 up 144.71 points (0.7%) and China's Shanghai Composite up 12.52 (0.4%). European markets are higher with London's FTSE 100 up 5.65 points (0.1%), Germany's DAX up 7.26 points (0.1%), and France's CAC 40 up 18.46 points (0.3%). The euro was down 0.0033 and the U.S. dollar index was down 0.24 at 94.32. September 30-year T-Bonds were down 3/32nds while August gold was down $6.10 at $1,253.90 and August crude oil was up $0.41 at $74.26. Soybeans on China's Dalian Exchange were lower and Malaysian palm oil futures were up 0.1%.
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| BULL | BEAR | ||
| 1) | December corn survived last week's brief penetration of the $3.60 low. | 1) | USDA's good-to-excellent crop ratings remain high for row crops and spring wheat. |
| 2) | CFTC data shows commercials added to net long positions in soybeans and spring wheat as of July 3. | 2) | China's 25% soybean tariff went into effect Friday and no trade resolution is in sight yet. |
| 3) | Recent dry weather concerns in Europe remind us weather risk is still in play for wheat in 2018. | 3) | Downtrends remain in effect for corn, soybeans, and all three wheats with potential buyers difficult to entice. |
CORN December corn is down 2 1/2 cents early Tuesday as prices continue to be pressured by the perception that the 2018 corn crop is doing well overall. Late Monday, USDA said 37% of corn was silking and 75% of the crop was rated good to excellent, slightly below where the successful 2016 corn crop was at this time. The worst conditions for corn were seen in Texas, Missouri, and Kansas where weather has been dry this year. Tuesday morning's weather map shows rain in eastern North Dakota, but is dry elsewhere with triple-digit temperatures expected in eastern Montana. Much of the Corn Belt will be dry the next few days, but moderate to locally heavy rain chances continue to hang around the north-central Midwest where more amounts are not welcome. With crops doing well in most areas and USDA's higher-than-expected finding of 5.3 billion bushels of corn on hand on June 1, Thursday's WASDE report is apt to show a higher estimate of U.S. ending corn stocks for 2018-19. Technically, the trend in corn remains down and USDA's corn crop rating remains high. USDA's outlook for lower world corn supplies in 2018-19 remains the one factor that should help prices find support above last year's lows.
SOYBEANS November soybeans are down 1 3/4 cents early, moderated by a slight gain in December soybean meal. USDA's weekly Crop Progress report showed little sign of problems among soybeans with 47% of the crop now blooming and
71% rated either good or excellent. The good-to-excellent rating is even with the 2016 soybean crop, which produced an impressive 4.3 billion bushels. Aside from flooding problems in the northwestern Midwest, the tougher problem for crops this year is found from Missouri to Texas where conditions are dry. Strangely, the seven-day forecast remains dry again for that region while more rain is headed toward the north-central Midwest. This season's lack of export business to China remains the other bearish problem for soybean prices and between the two of them, there is not much room for potential buyers to be hopeful. On the other hand, Monday's CFTC data did show that commercials added to net long positions so there is increased recognition of good value at these lower prices. Thursday's WASDE report is not expected to show much change for soybeans, but the yield estimate could get bumped higher. For now, another big soybean harvest look possible this fall and the trend in soybeans remains down.
WHEAT September K.C. wheat is down 6 3/4 cents early, not finding much buying enthusiasm since hearing about lower crop estimates in Europe last week. 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. With such a glowing report from USDA, September Minneapolis wheat is down 4 cents early Tuesday, trading not far from the lows of 2017 and gaining fans from the commercial side. CFTC data shows commercials net long 10,892 contracts, the most since August, 2016 and an encouraging sign that support for spring wheat prices should be near. Thursday's WASDE report probably won't offer much change to USDA's estimate of U.S. ending wheat supplies, but updated crop estimates for Europe and Russia will attract interest. For now, weather remains the main risk of 2018 and the trends for all three wheats are down. There is still enough uncertainty in 2018 to encourage two-way trading in winter wheat.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.22 | -$0.05 | -$0.32 | Sep | $0.008 |
| Soybeans: | $7.96 | -$0.21 | -$0.60 | Aug | $0.003 |
| SRW Wheat: | $4.83 | -$0.06 | -$0.25 | Sep | $0.014 |
| HRW Wheat: | $4.84 | -$0.06 | -$0.22 | Sep | $0.010 |
| HRS Wheat: | $5.26 | -$0.08 | -$0.22 | Sep | $0.026 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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