DTN Closing Grain Comments

General Comments:

Corn closed down 4 1/2 cents in the September contract and was down 4 1/2 cents in the December. Soybeans closed down 15 cents in the August and were down 15 cents in the November. Wheat closed up 12 1/2 cents in the September Chicago, up 10 1/2 cents in the September Kansas City and was up 1 1/4 cents in the September Minneapolis.

The September U.S. dollar index is down 0.08 at 94.48. August gold is down $4.80 at $1,241.80, while September silver is down 16 cents and September copper is unchanged. The Dow Jones Industrial Average is up 98 points at 25,023. August crude oil is up $0.64 at $70.97. August heating oil is up $0.0089, while August RBOB gasoline is up $0.0325 and August natural gas is down $0.045.

For the week:

September corn closed down 19 cents and December was down 18 1/4 cents. August soybeans were down 58 3/4 cents while the November was down 60 1/4 cents. September Chicago wheat was down 18 1/4 cents, September Kansas City wheat was down 21 1/4 cents, and September Minneapolis wheat was down 26 1/2 cents.

Corn:

December corn fell 4 1/2 cents Friday to $3.54 3/4, taking back most of Thursday's gain, which was helped by USDA's lower world estimate of ending corn stocks, now down to 152.0 mmt (5.98 bb). For the week, December corn dropped 18 1/4 cents to a new weekly low for 2018, still pressured by favorable growing weather and noncommercials under pressure to liquidate. Temperatures were hot again Friday for much of the Corn Belt with more rain falling in northwestern Iowa where too much rain has already been a problem. Temperatures will turn milder after Friday for all but the southern Corn Belt with a broad coverage of rain expected to keep crop conditions high. As bullish as the world corn estimates look for 2018-19, there is no sign of much buying interest in corn yet, as the more immediate concerns of good crops and slower-than-expected demand are taking precedent (see Friday's DTN article, "Why Aren't Corn Prices Higher?"). Technically, 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 $3.14 Thursday, near its lowest price in 2018 and 31 cents below the September contract. In outside markets, the September U.S. dollar index is up 0.02, staying quiet near its highest prices in nearly a year while 10-year T-notes are yielding 2.83%. Outside commodities are mixed with August crude oil up 69 cents a barrel.

Soybeans:

November soybeans tried to hold it together on Thursday after USDA took away 250 million bushels of new-crop exports. However, few buyers were to be found Friday as prices fell another 15 cents to $8.34 1/4 on lighter volume, another new nine-year low for November soybean prices. Between a forecast for milder temperatures the next 10 days, chances for broad rain coverage across the Midwest, and no sign of change in the trade war with China, soybean prices just aren't getting much of a chance these days to trade higher. However, that doesn't mean anyone should have confidence about where prices are headed, because the trade war situation could change with one flinch from either side. Noncommercials turned net short in soybeans last week for the first time since February. Commercials are now net long, an indication they are finding attractive value at these lower prices, regardless of how the politics turn out. For now, buyers are scarce and the trend remains down for soybeans. DTN's National Soybean Index closed at $7.73 Thursday, at its lowest price in over nine years and priced 60 cents below the August contract. July soybean meal expired Friday with a final price of $328.80, down $4.60 on the day and showing no bullish jump at the end in spite of a lack of deliveries.

Wheat:

September Chicago wheat closed up 12 1/2 cents and September K.C. wheat was up 10 1/2 cents at $4.91 3/4, finding support at $4.70 in July and staying well above the 2018 low of $4.66 1/2. Winter wheat's reluctance to break down just yet is somewhat impressive and likely related to Thursday's lower USDA crop estimates for Australia, Europe, Russia and Ukraine. The new world ending wheat stocks to use estimate for 2018-19 is 34.8%, down from the previous year's 36.9% and on track to end the run of five consecutive years of higher stocks-to-use ratios. While that is worth something, 34.8% still represents a lot of world wheat available and is equivalent to the neutral season of 2001-02 when prices stayed at low level. For now, the trends for all three wheat futures remain down while weather risk still in play. DTN's National SRW index closed at $4.59 Thursday, up from its lowest price in two months and 25 cents below the September contract. DTN's National HRW index closed at $4.65, up from its lowest price in two months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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