DTN Closing Grain Comments

Wheat Surge Rebuffed Thursday

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

General Comments:

Corn was up 1 3/4 cents in the September contract and up 1 3/4 cents in the December. Soybeans were down 4 1/4 cents in the August contract and down 4 1/4 cents in the November. Wheat closed up 2 1/4 cents in the September Chicago contract, up 5 1/2 cents in the September Kansas City and up 2 1/2 cents in the September Minneapolis contract.

The September U.S. dollar index is up 0.49 at 94.91. December gold is down $8.30 at $1,219.30, while September silver is down 8 cents and September copper is down $0.0095. The Dow Jones Industrial Average is down 4 points at 25,330. September crude oil is up $1.34 at $69.00. September heating oil is up $0.0356, while September RBOB gasoline is up $0.0228 and September natural gas is up 0.068.

Corn:

December corn ended up 1 3/4 cents at $3.81 1/4, riding the coattails of a bullish surge in wheat prices for a while on Thursday. For corn itself, Wednesday's weather map was mostly dry, but the seven-day forecast expects broad coverage of moderate rain amounts for all but the western edge of the Corn Belt. If amounts verify, they would certainly be beneficial to crops as temperatures are expected to be above normal for most of the next ten days, especially in the western Corn Belt. On the demand side, corn exports still have a slim chance of reaching USDA's 2.4 billion bushel goal. Early Thursday, USDA said last week's export sales and shipments of corn totaled 11.5 and 64.0 million bushels respectively for 2017-18, a neutral showing for the week. Total corn shipments are still 402 million bushels short of USDA's goal with five weeks left in the season. Fundamentally, the outlook for corn prices is generally neutral, even with a successful U.S. fall harvest expected. For now, the trend is sideways with weather presenting some bullish concern as we move into August. DTN's National Corn Index closed at $3.35 Wednesday, up sharply from its lows in 2018 and 30 cents below the September contract. In outside markets, the September U.S. dollar is up 0.49 after the Federal Reserve said Wednesday that "economic activity has been rising at a strong rate."

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Soybeans:

November soybeans ended down 4 1/4 cents at $8.97 1/2 Thursday, still pressured by news that the White House is considering another round of higher tariffs against China. In an odd way, Thursday's decline in soybeans was limited for a time by the strong rally in wheat, as it doesn't take much to make shorts nervous this time of year. As with corn, there was not much rain on Thursday's weather map, but if the seven-day forecast is correct, soybean crops will benefit from broad rain coverage in most of the Midwest, just as pods are being set. The western Plains will be the drier exception with highs in the 90s expected. On the demand side, soybeans are right on pace with USDA's export estimate. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 3.4 and 31.5 million bushels respectively. New-crop soybean sales totaled 20.0 million bushels with unknown listed as the largest buyer. This continues to be a volatile time for soybean prices with traders keenly attuned to changes in the weather forecasts. So far, another big soybean harvest is likely this fall, but just how big is difficult to call and depends somewhat on whether or not this week's rain shows up, as planned. Technically, the trends are higher in both, November soybeans and December soybean meal, but a sideways, erratic path looks more likely during this volatile time of year. DTN's National Soybean Index closed at $8.24 Wednesday, up from its lowest price in over nine years and priced 78 cents below the November contract. In August contracts, delivery intentions totaled 1,237 for soybeans and 1,296 for soybean oil early Thursday. There have been no delivery intentions yet for soybean meal.

Wheat:

September Chicago wheat closed up 2 1/4 cents and September K.C. wheat was up 5 1/2 cents at $5.69 1/4 Thursday, an emotional day of trading that saw both contracts trade significantly higher earlier. In Europe, spot milling wheat posted its highest close in four years as dry weather continues to take a toll. Here in the U.S. however, September K.C. wheat was up 33 1/2 cents at one point after a surge of heavy buying volume hit markets shortly before 10:30 a.m. CDT and lasted about a half-hour before the price then fell back to a moderately higher close. While wheat prices have benefited from dry weather concerns the past few weeks, we still aren't seeing much excitement on the demand side. USDA said last week's export sales and shipments of 2018-19 wheat totaled 14.1 and 14.2 million bushels respectively, a neutral showing. Total 2018-19 wheat shipments were kept down 38% from a year ago, far from the 8% gain USDA is expecting by the end of the season. With weather concerns still active, the trends for all three U.S. wheats remain up. DTN's National SRW index closed at $5.35 Wednesday, 23 cents below the September contract and at a new 2018 high. DTN's National HRW index closed at $5.46 Wednesday, near its highest price in 2018.

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

Follow Todd Hultman on Twitter @ToddHultman1

(BAS)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Todd Hultman