DTN Early Word Grains
Wheat Prices Push Higher
December corn was up 2 3/4 cents, November soybeans were down 4 1/2 cents, and September Kansas City (HRW) wheat was up 9 3/4 cents.
CME Globex Recap:Early commodity prices are mixed, but non-ag commodities are mostly higher with the September U.S. dollar index down 0.17. Major stock markets are mixed with no strong influence early Wednesday.
OUTSIDE MARKETS:Previous closes on Tuesday showed the Dow Jones Industrial Average up 197.65 points at 25,241.94 and the S&P 500 up 13.42 points at 2,820.40 while the 10-year Treasury yield ended at 2.95%. Early Wednesday, DJIA futures were down 18 points. Asian markets are mixed with Japan's Nikkei 225 up 103.77 (0.5%) and China's Shanghai Composite down 1.92 (-0.1%). European markets are mostly lower with London's FTSE 100 down 40.12 points (-0.5%), Germany's DAX down 25.64 points (-0.2%), and France's CAC 40 up 8.39 points (0.1%). The euro was up .0020 and the U.S. dollar index was down 0.17 at 94.44. September 30-year T-Bonds were up 6/32nds while August gold was up $6.00 at $1,231.50 and September crude oil was up $0.11 at $68.63. Soybeans on China's Dalian Exchange were steady to higher and Malaysian palm oil futures were up 0.6%.
| BULL | BEAR | ||
| 1) | Dry conditions in the southwestern Corn Belt plus Michigan are helping support row crop prices. | 1) | USDA's good-to-excellent crop ratings for row crops are among the higher ratings of the past five years. |
| 2) | Commercials remain net long soybeans, soybean oil, and Minneapolis wheat. | 2) | China's 25% tariff on U.S. soybeans. |
| 3) | A few dry weather concerns are helping U.S. winter wheat prices hold sideways, above their 2018 lows. | 3) | Friday's report of U.S. GDP is expected to show higher growth in the second quarter, supporting the case for more rate hikes and a higher U.S. dollar. |
CORN December corn is up 2 3/4 cents early Wednesday, but keeping a low profile in July with crops looking good overall. Wednesday morning temperatures are in the 60s across most of the Corn Belt, keeping hotter readings confined to the southern states and will stay moderate through the week. The best chances for rain this week are in the central to southern Plains and should be of some help to crops in Kansas and Missouri. In practical terms, there is no strong bullish argument for corn and the trend in December corn remains down. However, the July low near $3.50 is a good candidate for support as USDA is expecting lower world corn supplies in 2018-19.
SOYBEANS November soybeans are down 4 1/2 cents early Wednesday, trimming back Tuesday's difficult-to-explain gain of 10 1/2 cents. Overall, November soybean prices are languishing below $9.00, near their lowest levels in nine years while U.S. crops are doing well and trade with China remains a concern. In spite of China's 25% tariff, it is still likely that China will need U.S. soybeans in the fall, but if the crop continues to do well, buying soybeans at harvest time should be no problem. One of the difficult things to assess in 2018 is if China's government will find a way to help importers get around the cost of the tariff or if the U.S. and China will come to some resolution. There seems to be no sign of that yet, but as we have seen, these policy decisions can change quickly. For now, the trend in soybeans remains down with the seasonal low not due until early October.
WHEAT September K.C. wheat is up 9 3/4 cents early, holding firm in this year's trading range with help from dry weather concerns around the globe. September Minneapolis wheat is up even more, trading 13 3/4 cents higher with little rain expected from Minnesota to the Pacific Northwest the next seven days. Day one of the Wheat Quality Council's Spring Wheat Tour finished with an estimate of 38.8 bushels an acre, the same as a year ago. One encouraging finding was a lack of significant insect or disease concerns. As the tour fans out Wednesday and Thursday, crops are expected to compare favorably to last year's drought conditions. For now, the trends in winter wheat are sideways, but it is impressive that prices are challenging five-week highs at a time when the seasonal influence is usually pulling prices lower. The trend in Minneapolis wheat remains down, but commercial net longs suggest downside risk may be limited.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.23 | -$0.05 | -$0.29 | Sep | $0.006 |
| Soybeans: | $7.98 | $0.10 | -$0.60 | Aug | -$0.001 |
| SRW Wheat: | $4.84 | -$0.03 | -$0.27 | Sep | $0.003 |
| HRW Wheat: | $4.94 | -$0.01 | -$0.16 | Sep | -$0.003 |
| HRS Wheat: | $5.22 | -$0.08 | -$0.33 | Sep | -$0.005 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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