DTN Closing Grain Comments

Soybeans Defy Bearish Report, Finish Higher

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

General Comments:

Corn was down 5 1/4 cents in the September contract and down 5 1/4 cents in the December. Soybeans were up 10 1/4 cents in the August contract and up 10 1/2 cents in the November. Wheat closed down 3 1/2 cents in the September Chicago contract, down 1 cent in the September Kansas City, and down 7 1/4 cents in the September Minneapolis contract. The September U.S. dollar index is down 0.01 at 94.43. August gold is down $0.60 at $1,225.00 while September silver is up 7 cents and September copper is up $0.0570. The Dow Jones Industrial Average is up 114 points at 25,158. September crude oil is up $0.72 at $68.61. September heating oil is up $0.0148 while September RBOB gasoline is up $0.0098 and September natural gas is up 0.025.

Corn:

December corn closed down 5 1/4 cents at $3.66 Tuesday with the seven-day forecast expecting a broad coverage of rain across all but the most northern states of the Corn Belt. The drier areas of Colorado to Missouri especially are in for higher amounts, which should offer some benefit to crops here at the end of July. Late Monday, USDA said 81% of crops are silking and 18% are in the dough stage, well ahead of their usual development. Seventy-two percent of corn was rated good or excellent, the same as last week with slight improvement in Missouri and a slight reduction in Michigan. So far, 2018 has the third best good-to-excellent corn rating of the past five years, which suggests a high national yield again this fall. Corn exports have been at a decent pace lately, but are still 3% below a year ago with roughly seven weeks left in the marketing year 2017-18. With the national crop looking good so far, the trend remains down for December corn. Downside risk however, should be limited with USDA expecting lower world ending stocks in 2018-19. DTN's National Corn Index closed at $3.28 Monday, up from its lows in 2018 and 29 cents below the September contract. In outside markets, the September U.S. dollar index is down 0.01, non-ag commodities are mostly higher, and the Dow Jones Industrial Average is up 129 points.

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Soybeans:

November soybeans closed up 10 1/2 cents at $8.73 1/4 Tuesday, managing a modest gain in the face of several bearish factors that have depressed soybean prices this summer. There was no significant change of trade news Tuesday as China's tariff is still 25%. U.S. crop conditions continue to do well with the seven-day forecast expecting rain across the southern two-thirds of the Midwest. USDA increased the good-to-excellent crop rating from 69% to 70% late Monday, just as 78% of soybeans have bloomed and 44% are setting pods. Michigan has been dry and will be again this week, but most other areas are doing well, putting soybeans close to their best ratings of the past five years. A big harvest at fall, if it happens, will not be good for soybean prices, but November prices were already near at their lowest level of the past nine years so it is difficult to expect much more on the downside. A weather problem or resolution with China is still a possibility, but so far, the trend remains down for November soybeans with trade issues an ongoing concern. DTN's National Soybean Index closed at $7.88 Monday, up from its lowest price in over nine years and priced 60 cents below the August contract.

Wheat:

September Chicago wheat closed down 3 1/2 cents and September K.C. wheat was down a penny at $5.09 3/4, trading on light volume as prices stay shy of their five-week highs. USDA's Crop Progress report for wheat showed nothing unexpected Monday afternoon as winter wheat harvest is now 80% complete, moving north out of Kansas. USDA's good-to-excellent rating slipped from 80% to 79% with slightly drier conditions seen in South Dakota and Montana, but the rating itself is still the highest since 2010, so crops are doing well. Drought in the Pacific Northwest remains a concern for soft white wheat and some spring wheat with no rain expected the next seven days. The western Canadian Prairies could also use more rain, but aren't seeing anything hopeful in this week's forecast. Fundamentally, world ending supplies of exportable wheat are expected to be down in 2018-19, but so far, the U.S. and Europe have enough to keep customers comfortable. The trends in winter wheat are currently sideways with noncommercials staying persistently net long in Chicago wheat. The trend in Minneapolis wheat remains down, but commercials are net long 13,691 contracts as of July 17, a sign of support for spring wheats' cheaper prices. DTN's National SRW Index closed at $4.87 Monday, near its highest prices in July and 27 cents below the September contract. DTN's National HRW Index closed at $4.95 Monday, its highest price in July.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman