DTN Early Word Grains
Crops Higher, Outside Markets Quiet
December corn was up 2 1/4 cents, November soybeans were up 6 cents, and September Kansas City (HRW) wheat was up 1 1/2 cents.
CME Globex Recap:Global stock markets are fairly quiet and Treasury bonds are trading higher after the Bank of Japan stayed with an accommodative monetary policy early Tuesday. The grain sector is higher with a dry forecast, but most other commodities are starting lower.
OUTSIDE MARKETS:Previous closes on Monday showed the Dow Jones Industrial Average down 144.23 points at 25,306.83 and the S&P 500 down 16.22 points at 2,802.60 while the 10-year Treasury yield ended at 2.97%. Early Tuesday, DJIA futures were up 2 points. Asian markets are a little higher with Japan's Nikkei 225 up 8.88 (0.04%) and China's Shanghai Composite up 7.35 (0.3%). European markets are quietly mixed with London's FTSE 100 up 12.87 points (0.2%), Germany's DAX down 9.77 points (-0.1%), and France's CAC 40 down 0.68 points (-0.01%). The euro was up .0013 and the U.S. dollar index was down 0.03 at 94.32. September 30-year T-Bonds were up 18/32nd while August gold was down $3.60 at $1,217.70 and September crude oil was down $0.35 at $69.78. Soybeans on China's Dalian Exchange were steady to higher and Malaysian palm oil futures were up slightly.
| BULL | BEAR | ||
| 1) | Northern Missouri and other parts of the Midwest have turned drier in late July. There is also expanding drought in the Pacific Northwest. | 1) | USDA's row crop ratings show local, but not major problems |
| 2) | IGC estimates expect significant reductions in exportable world ending stocks of corn and wheat in 2018-19. | 2) | Moderate temperatures in late July are helpful to crop conditions. |
| 3) | Rising prices of milling wheat in Europe, related to dry weather, have helped turn U.S. wheat prices higher. | 3) | China's 25% tariff on U.S. soybeans is hurting U.S. demand. |
CORN December corn is up 2 1/4 cents early Tuesday with rain falling around southern Illinois and Indiana, but a dry weather map is seen almost everywhere else. The Midwest has seen generally drier conditions the last seven days, but USDA kept its good-to-excellent rating for corn at a generally favorable score of 72% for late July with 91% of the crop silking. There will be plenty of rain the next seven days along the Gulf and Atlantic coasts, but not much inland, west of Ohio. Moderate temperatures will continue to help crops in the central and eastern Corn Belt as the western Corn Belt turns hotter later this week. Basically, we have a corn crop enduring some late-season stress after this year's favorable start and prices are correcting back out of the bearish hole they found in early to mid-July. Current conditions still support a big fall harvest, which means low prices, but crops remain at risk with a dry forecast ahead.
SOYBEANS November soybeans are up 6 cents early, approaching the $9.00 mark with not much rain in the seven-day forecast. Tuesday morning's showers in southern Illinois to southern Ohio will be helpful, but not much else is expected in the next seven days while temperatures return to hotter readings in the western Midwest later this week. As is often the case, crops in the eastern Midwest will stay more protected with moderate temperatures continuing. As with corn, USDA kept its good-to-excellent rating for soybeans unchanged at 70%, also saying that 86% of the crop is blooming and 60% is setting pods. While crop ratings don't make for good yield estimates, they do suggest a big fall harvest is likely until we get USDA's first field-based estimate on August 10. For now, November soybeans are trading up from their lows, but the trend remains down with the seasonal low not due until early October.
WHEAT September K.C. wheat is up 1 1/2 cents early, holding near their highest prices in July as late-season dry weather concerns have given prices another boost. Early milling wheat prices in Europe were up .7%. Late Monday, USDA said 85% of winter wheat has been harvested. Work is now getting ready to move further west where the lack of rain should make for quick progress. For the spring wheat crop however, more rain would be helpful and there simply isn't much expected from the Dakotas to the Pacific coast the next seven days. USDA's good-to-excellent rating of 78% is now suspect after last week's spring wheat tour from the Wheat Quality Council turned in a less optimistic report. With the trends in all three wheats currently up, there seems to be just enough problems around the globe to keep prices supported above their earlier lows in July.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.37 | $0.05 | -$0.30 | Sep | -$0.005 |
| Soybeans: | $8.13 | $0.05 | -$0.78 | Nov | -$0.008 |
| SRW Wheat: | $5.18 | $0.15 | -$0.28 | Sep | -$0.008 |
| HRW Wheat: | $5.31 | $0.15 | -$0.17 | Sep | -$0.002 |
| HRS Wheat: | $5.62 | $0.07 | -$0.39 | Sep | -$0.011 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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