DTN Closing Grain Comments

General Comments:

May corn closed down 1/4 cent per bushel and December corn was up 3/4 cent. May soybeans closed up 4 1/2 cents and November soybeans were up 4 1/2 cents. May K.C. wheat closed down 1 1/4 cents, May Chicago wheat was up 1 1/4 cents and May Minneapolis wheat was down 11 1/4 cents.

The June U.S. dollar index is trading up 0.131 at 96.930. The Dow Jones Industrial Average is down 105.09 points at 26,153.33. June gold is up $1.50 at $1,295.70, May silver is down $0.04 at $15.06 and May copper is down $0.0130 at $2.9115. May crude oil is up $0.86 at $62.45, May heating oil is up $0.0171, May RBOB is up $0.0186 and May natural gas is down $0.024.

Corn:

May corn ended down a quarter cent at $3.61 1/2 Tuesday on light trading volume, still adjusting to Friday's new estimates from USDA and the uncertainty of a new planting season ahead. Late Monday, NASS's Southern Plains Regional Field Office said 51% of corn was planted in Texas and 25% of the crop was emerged. USDA will have a national planting progress estimate next Monday afternoon, but it is still early with midday soil temperatures in the 30s and 40s across much of the Corn Belt. In South America, conditions remain favorable with more rain expected in Brazil this week, while Argentina adds to last week's corn harvest progress of 12%. Fundamentally, ending U.S. corn stocks for 2018-19 could be closer to 2 billion bushels (bb) than previously expected, but the overall price outlook is still neutral, similar to the low ranges the past four years. Technically, Friday's sell-off turned the trend of corn prices down, but further downside potential is apt to be limited. For now, May futures appear to have found support near the 2018 low and cash corn prices bounced up from a four-month low. DTN's National Corn Index closed at $3.36 Monday, priced 26 cents below the May contract and back below its 100-day average. In outside markets, the June U.S. dollar index is up 0.13, and other commodities are mixed.

Soybeans:

May soybeans held Monday's gain and added another 4 1/2 cents, finishing at $9.00 on Tuesday, a quieter day of trading. Soybean prices have been in a stalemate ever since the U.S. and China declared a truce on new tariffs and went instead to month-by-month negotiations. This week's talks pick up again in Washington D.C., but there is no sign yet of any significant breakthrough on the issue of safeguarding intellectual property, the original dispute that fueled last year's higher tariffs. Here in the U.S., some soybean planting has begun in the South, but it will be a few weeks before USDA reports on planting nationally. As mentioned above for corn, most Midwestern soils are still too cold and some too wet for planting yet. On a more bullish note, USDA's attache in China estimated China's soybean imports will increase 4% in 2019-20 to 91.5 million metric tons (mmt) (3.36 bb). Part of the rationale for expecting higher soybean imports at a time when African swine fever is reducing China's pork herd is that demand has increased for chicken, beef and seafood. USDA's attache also noted that as China moves toward larger-scale pork production, they will require more commercial feed, less prone to disease than current feed sources. Fundamentally, the bearish concerns for soybeans still outweigh the bullish factors, while trade with China remains uncertain. Technically however, May soybean futures are staying supported in the middle of a wide, sideways range that spans from $8.50 to $9.50. DTN's National Soybean Index closed at $8.09 Monday, chopping sideways and priced 86 cents below the May contract.

Wheat:

May K.C. wheat ended down 1 1/4 cents Tuesday to $4.33 1/4 after USDA said 56% of the winter wheat crop was rated either good or excellent, the highest in three years. Poor-to-very poor ratings were low at 9%, but Ohio and Michigan showed bigger problems with ratings of 26% and 30%, respectively. Kansas, the number one winter wheat state, showed 55% of crops rated either good or excellent. The seven-day forecast expects moderate-to-heavy rain amounts east of central Kansas, all the way to the Atlantic Coast. Moderate-to-locally heavy amounts are also expected in the Pacific Northwest where winter wheat crops also rated well in Monday's report. Outside the U.S., some dryness is reported in the Canadian Prairies, Australia, eastern Ukraine, and the North China Plain, but there is no serious threat to world production yet. May Minneapolis wheat continued its bearish slide for the fourth consecutive session, falling 11 1/4 cents to a new contract low of $5.41 3/4. The selling is unexpected, happening while the Dakotas are dealing with flooding issues. Fundamentally, plentiful U.S. supplies continue to keep wheat prices under bearish pressure. Technically, the trends in cash HRW and SRW wheat remain down, while cash HRS wheat is holding sideways, above $5.00. DTN's National HRW index closed at $4.21 Monday, 14 cents under the May contract and up from its lowest prices in a year. DTN's National SRW index closed at $4.37, also up from its lowest prices in a year.

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

Follow him on Twitter @ToddHultman

(CZ)

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