DTN Closing Grain Comments

Soybeans, KC Wheat Fall To New Lows

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

General Comments:

July corn closed up 1/2 cent per bushel and December corn was up 1/2 cent. July soybeans closed down 6 1/4 cents and November soybeans were down 7 cents. July Kansas City wheat closed down 10 1/2 cents, July Chicago wheat was down 7 1/4 cents, and July Minneapolis wheat was down 4 1/4 cents.

The June U.S. dollar index is trading down 0.126 at 97.600. The Dow Jones Industrial Average is up 47.13 points at 26,590.46. June gold is down $7.90 at $1,280.90, July silver is down $0.15 at $14.84 and July copper is up $0.0030 at $2.8970. June crude oil is up $0.14 at $63.44, June heating oil is up $0.0062, June RBOB is down $0.0108 and June natural gas is up $0.008.

Corn:

July corn traded higher all Monday after 8:30 a.m. CDT, but ended with just a half-cent gain at $3.61 3/4, getting a small lift from snow in parts of the Northern Plains and colder temperatures over the weekend. The forecast for the next seven days has heavy rain amounts from eastern Texas into Missouri, Illinois and beyond the Great Lakes -- moisture that will add to planting delays. Southern Minnesota remains a target of planting concern with a mostly wet and cool forecast the next 10 days. From the Dakotas to Wisconsin, 4-inch midday soil planting temperatures are in the 30s and 40s. Monday afternoon's Crop Progress report will be closely watched and may show corn planting progress just below 20% after several areas took advantage of better weather last week. Earlier Monday, USDA said 53.8 million bushels (mb) of corn were inspected for export last week, a little more than needed to keep pace with USDA's export estimate. It is interesting that Brazil's FOB corn prices are 13 cents cheaper than FOB prices at the Gulf, but U.S. corn exports remain active anyway. Fundamentally, even if 92.8 million acres of corn gets planted in a timely fashion, the early outlook for ending corn stocks is in line with the past two years, giving corn a neutral price outlook. Cash prices are currently firmer than futures contracts and last Wednesday's new four-month low has shown no follow-through yet. DTN's National Corn Index closed at $3.32 Friday, priced 29 cents below the July contract and up from its lowest prices in four months. In outside markets, the June U.S. dollar index is trading quiet, down 0.03, but most other commodities are lower anyway.

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

Soybeans:

July soybeans tried to trade higher early Monday, but ended down 6 1/4 cents at a new contract low of $8.60 3/4. Planting delays affecting corn are also potentially bearish for soybeans if some corn acres get switched. There is also a chance that prevented plantings will be up in 2019, and some of that could be supportive for soybean prices. Overall however, the bigger picture for soybean prices remains bearish in early 2019 with record U.S. ending soybean stocks expected for 2018-19 and no one is able to say how trade talks with China turn out. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are in Beijing this week, ready to resume trade talks on Tuesday. Officials continue to say the two sides are close, but an actual agreement remains out of reach. Without China, U.S. soybean exports have suffered. USDA said Monday that 18.1 million bushels (mb) of soybeans were inspected for export last week, below the 38.5 mb needed each week to reach USDA's export estimate by the end of August. It is still possible that a trade agreement could offer soybean prices a reason to cheer up, but while the outcome of talks remains uncertain, July soybeans are pushing new contract lows. Technically, the trend in July soybeans turned down on April 17. DTN's National Soybean Index closed at $7.75 Friday, priced 92 cents below the July contract and at its lowest price in five months.

Wheat:

Winter wheat prices continued to take it on the chin Monday as July KC wheat fell 10 1/2 cents to a new contract low of $3.97. The seven-day forecast expects more rain and some heavy amounts in HRW wheat country, which will also extend over the SRW wheat crops in the eastern Midwest. Monday afternoon's good-to-excellent crop ratings from USDA are likely to stay near last week's 62%, giving traders little reason to be concerned about this year's U.S. winter wheat crop. Spring wheat planting, on the other hand, remains a challenge after snow and colder temperatures crossed the Dakotas and Minnesota over the weekend. Even so, July Minneapolis wheat fell 4 1/4 cents to a new contract low of $5.07 1/2 Monday, burdened by bearish supplies of all U.S. wheat in general. Earlier Monday, USDA said 23.2 mb of wheat were inspected for export last week, still not quite meeting the 29.2 mb needed each week to reach USDA's export estimate for 2018-19. Fundamentally, U.S. wheat prices continue to suffer under the weight of plentiful supplies and slow demand. Technically, spot KC wheat is near its lowest prices in 13 years and should be closer to finding support. DTN's National HRW index closed at $3.88 Friday, its lowest in over a year and 19 cents below the July contract. DTN's National SRW index closed at $4.14, trading not far above its March low.

Todd Hultmancan be reached at todd.hultman@dtn.com

FollowTodd on Twitter @ToddHultman1

(CZ)

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