DTN Closing Grain Comments
Soybeans Higher, Wheat Lower on Quiet Day
Corn was up 1/2 cent in the September contract and up 1/2 cent in the December. Soybeans were up 10 3/4 cents in the August contract and up 11 1/2 cents in the November. Wheat closed down 8 1/2 cents in the September Chicago contract, down 7 1/4 cents in the September Kansas City and down 3 1/2 cents in the September Minneapolis contract.
The September U.S. dollar index is down 0.24 at 94.26. August gold is down $0.90 at $1,240.30 while September silver is up 1 cent and September copper is down $0.0080. The Dow Jones Industrial Average is up 15 points at 25,034. August crude oil is down $2.91 at $68.10. August heating oil is down $0.0750 while August RBOB gasoline is down $0.0992 and August natural gas is up $0.017.
December corn closed up 1/2 cent at $3.55 1/4 Monday, finding slight support near its lowest prices in 2018, but no strong reasons to bid prices significantly higher. After a hot and mostly dry weekend across the Corn Belt, temperatures are expected to be more moderate the next seven days with rain in the Western Corn Belt earlier in the week and over the Eastern Corn Belt later in the week. USDA's Crop Progress report may show a slightly lower good-to-excellent rating for corn on Monday afternoon, but it is still likely to be historically high as crops are doing well overall. On the demand side, USDA said 47.9 million bushels (mb) of corn were inspected for export last week, a bearish showing that has total inspections down 5% in 2017-18 from a year ago and well below USDA's estimate for a 5% increase. Another bearish concern for corn prices is the level of noncommercial bullishness still in the market. Friday's CFTC data showed noncommercials reluctantly cutting net longs, from 148,352 to 109,320 as of July 10 -- positions that continue to lose money and encourage more selling. So far, the trend remains down for December corn. DTN's National Corn Index closed at $3.10 Friday, near its lowest price in 2018 and 31 cents below the September contract. In outside markets, the September U.S. dollar index is down 0.20 and August crude oil is down $2.82 with unconfirmed talk that Russia may supply more oil, if needed.
November soybeans enjoyed a reprieve from recent selling and closed up 11 1/2 cents at $8.45 3/4 Monday, getting a modest bounce from its lowest November prices in over nine years. We can't say there was any significant change in fundamentals to believe prices are headed higher, but we have seen commercials hang on to a small net-long position for the past three weeks. Friday's CFTC data showed noncommercials turned back to slightly net long in soybeans on July 10, likely enticed by last Friday's brief short-covering rally. So far, the weather has been generally favorable for row crops in 2018, and that will continue this week with broad rain coverage and more moderate temperatures across the Midwest. On the demand side, crush demand continues to be the one bright spot for soybeans this year. According to Dow Jones, the National Oilseed Processors Association said 159.2 mb of soybeans were crushed in June, 15% more than a year ago. Soybean oil stocks totaled 1.766 billion pounds at the end of June, up 4% from a year ago. Earlier, USDA said 23.3 mb of soybeans were inspected for export last week, a neutral showing that put total soybean inspections on track with USDA's estimate for a 4% reduction in 2017-18. In spite of Monday's higher close, the trend remains clearly down for soybeans with trade issues an ongoing concern. DTN's National Soybean Index closed at $7.58 Friday, at its lowest price in over nine years and priced 61 cents below the August contract.
September Chicago wheat closed down 8 1/2 cents and September K.C. wheat was down 7 1/4 cents at $4.84 1/2, still holding above its 2018 low of $4.66 1/2, but having a hard time sustaining any rally without a bullish fundamental argument. July's WASDE report showed crop estimate reductions for all the usual places, from Europe to Australia, but the new production estimate of 736.26 million metric tons (27.1 billion bushels) is still only down 3% from last year's record global harvest. Monday afternoon's Crop Progress report is apt to show winter wheat harvest around 70% or more complete and another high good-to-excellent rating for spring wheat. Speaking of spring wheat, Friday's CFTC data showed noncommercials in Minneapolis wheat bearish, holding 9,412 net-shorts as of July 10, while commercials continue to find value at the lower prices, holding 11,979 net-longs. September Minneapolis wheat is not showing signs of stabilizing yet, but support should be near with commercials finding good value at these cheaper prices. For now, the trends for all three wheat futures remain down. DTN's National SRW index closed at $4.71 Friday, up from a new two-month low and 26 cents below the September contract. DTN's National HRW index closed at $4.75, also up from its lowest prices in two months.
Todd Hultman can be reached at firstname.lastname@example.org
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