DTN Closing Grain Comments

General Comments:

Corn was down 1 1/4 cents in the September contract and down 1 1/4 cents in the December. Soybeans were up 6 1/2 cents in the September contract and up 7 cents in the November. Wheat closed down 13 1/4 cents in the September Chicago contract, down 19 cents in the September Kansas City, and down 16 cents in the September Minneapolis contract. The September U.S. dollar index is up 0.01 at 96.23. December gold is down $18.40 at $1,200.60 while September silver is down 28 cents and September copper is down $0.0105. The Dow Jones Industrial Average is down 54 points at 25,259. September crude oil is down $1.18 at $66.45. September heating oil is down $0.0190 while September RBOB gasoline is down $0.0371 and September natural gas is up 0.017.

CORN:

December corn closed down 1 1/4 cents at $3.70 1/2 Monday, still under pressure after USDA estimated a 14.59 billion bushels corn crop Friday with a record yield of 178.4 bushels per acre. The estimate of U.S. ending corn stocks at 1.684 billion bushels is 11.2% of annual use and the lowest in five years, thanks to a 3% estimated increase in world demand in 2018-19. Speaking of demand, USDA said early Monday, 8.4 million bushels (213,372 mt) of U.S. corn were sold to Mexico, 5.6 million bushels (142,248 mt) of which were for 2018-19 and the rest for 2019-20. USDA also said 49.7 million bushels of old-crop corn were inspected for export last week, probably not enough to reach USDA's 2.4 billion bushel export estimate by the end of August. For now, the trend in December corn is sideways with bearish pressure from USDA's large crop estimate and a seven-day forecast that is expecting broad rain coverage for nearly all the Midwest, except the northernmost states. DTN's National Corn Index closed at $3.26 Friday, still above its low in 2018 and 32 cents below the September contract. In outside markets, December gold is down $18.40, falling to a new one-year low with more rate hikes expected in 2018.

Soybeans:

November soybeans closed up 7 cents at $8.68 3/4 Monday, trimming back Friday's big 42 1/4 cent drop and with additional help from commercial buying in soybean meal. USDA's new estimate of a record high 4.59 billion bushel crop puts U.S. ending stocks at 785 million bushels or 18.4% of annual use, which is the highest in 12 years. Of course, there is uncertainty around USDA's new-crop estimate as it is still early in terms of weather risk, but the larger uncertainty in everyone's estimates is on the demand side with no one knowing how long the trade dispute with China may last or what the ramifications will be. Early Monday, USDA said 5.2 million bushels (142,500 mt) of U.S. soybeans were sold to Mexico for 2018-19. USDA also said 21.3 million bushels of soybeans were inspected for export last week, in line with USDA's export estimate. In spite of Friday's big drop, the trend in November soybeans remains sideways in a dangerously volatile situation. DTN's National Soybean Index closed at $7.81 Friday, back near its lowest price in over nine years and priced 81 cents below the November contract. In August contracts, delivery intentions totaled 191 for soybeans, 33 for soybean oil, and 50 for soybean meal early Monday. There are 308 open contracts in August soybean meal early Monday and those August contracts quit trading early Tuesday.

Wheat:

September K.C. wheat closed down 19 cents at $5.40 3/4 Monday, pressured not only from a 2.8% drop in Europe's milling wheat price, but also from a seven-day forecast for rain in the Southern Plains, which is seen as helpful for the fall planting of winter wheat. While USDA did reduce Europe's wheat crop estimate from 145.0 mmt to 137.5 mmt (5.1 bb) Friday and is looking for a 12% increase in U.S. exports this season, the exports are not happening yet. Judging from wheat's futures spreads, U.S. exports may not pick up much until early 2019. Monday morning, USDA said 17.0 million bushels of wheat were inspected for export last week, another bearish week that has total inspections down 38% in 2018-19 from a year ago. There still is not much rain in the forecast for the northwestern U.S. or western Canadian Prairie and parts of the spring wheat crop are being stressed as temperatures reached triple digits over the weekend. Even though the U.S. spring wheat crop may come in less than Friday's 614 million bushel estimate, September Minneapolis wheat joined Monday's sell-off in wheat and closed down 16 cents. This is a volatile environment, but in spite of Monday's losses, the trends for all three U.S. wheats remain up. DTN's National SRW Index closed at $5.18 Friday, 29 cents below the September contract and down from its high in 2018. DTN's National HRW Index closed at $5.40 Friday, also down from its highest price in 2018.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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