DTN Closing Grain Comments

General Comments:

Corn was down 1/4 cent in the September contract and down 3/4 cent in the December. Soybeans were up 12 cents in the August contract and up 12 1/4 cents in the November. Wheat closed down 6 1/4 cents in the September Chicago contract, down 6 1/2 cents in the September Kansas City and down 1/2 cent in the September Minneapolis contract.

The September U.S. dollar index is down 0.12 at 95.06. December gold is down $0.30 at $1,217.40 while September silver is up 1 cent and September copper is up $0.0195. The Dow Jones Industrial Average is up 154 points at 25,657. September crude oil is up $0.10 at $69.11. September heating oil is up $0.0272 while September RBOB gasoline is up $0.0368 and September natural gas is up 0.038.

Corn:

December corn ended down 3/4 cent at $3.84 1/2 Tuesday, not finding much to trade on other than a lower day in wheat. The central and Western Corn Belt saw light-to-moderate rains Monday evening into Tuesday, which is a helpful surprise to those crops as the seven-day forecast is not expecting much in that region. The better rain chances for the week ahead are in the Southern Plains and eastern Midwest, with heavy amounts on the way to northern Texas and Arkansas. Late Monday, USDA described a corn crop that is well-advanced with 57% in the dough stage. The good-to-excellent rating slipped from 72% to 71%, but still points to a big harvest this fall. On the demand side, old-crop corn exports will probably fall short of USDA's 2.4 billion bushel (bb) export estimate, but new-crop interest is off to an aggressive start. Early Tuesday, USDA said optional origin sales of 7.1 million bushels (mb) (179,000 metric tons) of corn were made to unknown for 2018-19. Dow Jones' survey of analysts expects USDA to estimate corn yield at 176.3 bushels per acre (bpa) and production at 14.42 bb on Friday. If true, that would add roughly 200 mb to new-crop ending stocks, but there is plenty of uncertainty around these guesses, which could impact Friday's corn prices. Technically, the trend in December corn is sideways with a lot we still don't know about this year's crop. DTN's National Corn Index closed at $3.40 Monday, up sharply from its lows in 2018 and 31 cents below the September contract. In outside markets, the September U.S. dollar is down 0.12, outside commodities are mixed, and the Dow Jones Industrials are higher.

Soybeans:

November soybeans closed up 12 1/4 cents at $9.05 3/4 Tuesday, bouncing back from Monday's loss with help from commercial buying. Some of gains were likely related to the drop in Monday's good-to-excellent rating, from 70% to 67%, while 75% of soybeans are setting pods. Missouri continues to have the most problems with 33% of the crop rated poor-to-very poor. The more important assessment of soybean crops will be the first field-based yield estimate released in Friday's WASDE report. While even that carries a wide margin of error with the 90% confidence interval in excess of plus or minus 10%, it tends to set a tone for expectations going into fall. Earlier Tuesday, USDA said export sales of 5.3 mb (145,000 mt) of U.S. soybeans went to unknown for 2018-19. It is interesting that some want to secure purchases before harvest, and there is also a risk that one of these days, China and the U.S. may surprise markets with an unexpected resolution to their trade differences. For now, the trends are technically 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 $8.14 Monday, up from its lowest price in over nine years and priced 79 cents below the November contract. In August contracts, delivery intentions totaled 799 for soybeans and 732 for soybean oil early Tuesday. There have been no delivery intentions yet for soybean meal.

Wheat:

September Chicago wheat tried to trade higher early, but ended the day down 6 1/4 cents at $5.68 1/4, still struggling to sustain trading above the 2017 high of $5.74 1/2. Similarly, September K.C. wheat was down 6 1/2 cents while Minneapolis wheat gave back just a half-cent. Europe's price of December milling wheat, which has had a big influence in the U.S. lately, ended up 1 3/4 euros or 0.8% higher as dry weather remains a concern in several wheat areas around the world, ahead of Friday's WASDE report. Dow Jones' pre-report survey expects USDA to reduce its estimate of U.S. wheat production from 1.88 bb to 1.85 bb, a small drop after USDA reduced its good-to-excellent rating for spring wheat from 78% to 74% late Monday. Attention will also turn to USDA's estimate of world wheat production and specific crop estimates, especially for Europe. Here in the U.S. and western Canada, the seven-day forecast is mostly dry for the northwestern Plains, Canadian Prairies, and the Pacific Northwest with hotter temperatures on the way. Expanding drought in the Pacific Northwest and risk of wildfires also add to bullish concerns. With dry weather concerns active and crop estimates changing, the trends for all three U.S. wheats remain persistently up. DTN's National SRW index closed at $5.44 Monday, 30 cents below the September contract and at a new high in 2018. DTN's National HRW index closed at $5.67 Monday, also at its highest price in 2018.

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

Follow Todd Hultman on Twitter @ToddHultman1

(BAS)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.