DTN Closing Grain Comments

Wheat Leads Grains Higher

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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General Comments:

Corn was up 5 1/4 cents in the September contract and up 5 cents in the December. Soybeans were up 4 1/2 cents in the August contract and up 5 3/4 cents in the November. Wheat closed up 16 cents in the September Chicago contract, up 15 1/4 cents in the September Kansas City, and up 8 1/2 cents in the September Minneapolis contract. The September U.S. dollar index is down 0.40 at 94.06. December gold is down $0.60 at $1,232.10 while September silver is up 4 cents and September copper is down $0.0070. The Dow Jones Industrial Average is down 63 points at 25,388. September crude oil is up $1.50 at $70.19. September heating oil is up $0.0180 while September RBOB gasoline is up $0.0075 and September natural gas is up 0.020.

Corn:

December corn closed up a nickel at $3.81 1/4 Monday with a mostly dry forecast for the week ahead. Rain is expected east of Illinois this week and Minnesota and Wisconsin have chances later this week, but states like Iowa and Illinois have had lesser amounts lately. Fortunately, for crops, temperatures were fall-like over the weekend and will stay moderate most of this week. The western Plains will get hotter near the end of the week and are not expecting much rain after receiving helpful amounts over the weekend. Monday morning, USDA said 65.3 million bushels of corn were inspected for export last week, a higher amount than we've seen, but total inspections in 2017-18 are down 3% from a year ago with five weeks left in the season. December corn has now rebounded to its highest price in five weeks with help from this drier turn in weather and wheat's ongoing weather challenges. There is plenty of uncertainty ahead and the July low should hold as firm support. DTN's National Corn Index closed at $3.32 Friday, up from its lows in 2018 and 30 cents below the September contract. In outside markets, September crude oil is up $1.50 with increased tensions between Saudi Arabia and Yemen threatening oil traffic in the Red Sea.

Soybeans:

November soybeans closed up 5 3/4 cents at $8.91 Monday, continuing to bounce back from its lowest November prices in nine years, but also staying below the $9.00 mark with plenty of uncertainty about this year's crop and the trade situation with China. The seasonal drop in soybean prices came early in 2018, hastened by good early weather and a ratcheting up of tariffs that led to China's 25% tariff against U.S. soybeans on July 6. Now the market has time to kill before we get USDA's yield estimate on August 10 and, thanks to drier conditions lately, Monday afternoon's good-to-excellent rating from USDA may show a slight drop. These aren't good clues to trade on, but it is all traders have until we get to later in the year and find out if moisture was enough to support yields. Monday morning, USDA said 27.2 million bushels of U.S. soybeans were inspected for export, putting this season's total down 4% from a year ago and in line with USDA's estimate. The seven-day forecast has rain for east of Illinois and for Minnesota later in the week, but Iowa is not certain and the rest of the Midwest is expected to be dry. Moderate temperatures are helpful to crops and we have to assume, so far, that we'll see a big harvest again this fall; but weather remains a question mark. So far, the trend remains down for November soybeans. DTN's National Soybean Index closed at $8.08 Friday, up from its lowest price in over nine years and priced 63 cents below the August contract.

Wheat:

September Chicago wheat closed up 16 cents and September K.C. wheat was up 15 1/4 cents at $5.47 3/4 Monday, helped again by a 2.1% gain in Europe's price for December milling wheat. Winter wheat harvest is over in the Southern Plains, so Monday's rains and this weekend's rains may offer help to the next crop. The more current concern is the U.S. spring wheat crop as not much rain has been seen in the northwestern Plains lately and drought is developing in the Pacific Northwest. This week's forecast is mostly dry from Minnesota to the Pacific coast with hot temperatures at times. In addition, Europe and Australia remain dry and the International Grain Council's latest forecast is that world wheat production will be down 5% in 2018-19. With weather concerns still active, the trends for all three U.S. wheats remain up. DTN's National SRW Index closed at $5.03 Friday, 28 cents below the September contract and down from a new 2018 high. DTN's National HRW Index closed at $5.16 Friday, near its highest prices in 2018.

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

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Todd Hultman