DTN Closing Grain Comments

General Comments:

July corn closed up 2 cents per bushel and December corn was up 3/4 cent. July soybeans closed down 8 1/2 cents and November soybeans were down 8 cents. July Kansas City wheat closed up 5 cents, July Chicago wheat was up 8 cents and July Minneapolis wheat was up 8 3/4 cents.

The June U.S. dollar index is trading up 0.135 at 97.545. The Dow Jones Industrial Average is down 129.62 points at 26,300.52. June gold is down $11.50 at $1,272.70, July silver is down $0.09 at $14.64 and July copper is down $0.0165 at $2.7850. June crude oil is down $1.92 at $61.68, June heating oil is down $0.0195, June RBOB is down $0.0502 and June natural gas is down $0.027.

Corn:

July corn ended up 2 cents at $3.70 1/2 Thursday, posting a sixth consecutive gain on steady volume. Planting prospects aren't looking any better on Thursday as the seven-day forecast shows a broad coverage of heavy rains expected from eastern Texas to the Great Lakes and beyond, adding unwelcome moisture to the central, southeastern and Eastern Corn Belt. Lighter rain amounts are expected for the northwestern U.S. Plains, but air temperatures remain below normal, unable to give soil temperatures a needed boost. The extended forecast can be trickier, but at this point, it calls for above normal precipitation in the Corn Belt and below normal temperatures in the northern Midwest. Flooding along the major waterways is not helpful for the flow of U.S. grains and St. Louis is expected to be closed Friday for river traffic into early next week. Even so, U.S. corn shipments continue to do well, posting 53.8 million bushels (mb) last week, more than the 46.6 mb needed each week to reach USDA's export estimate. Corn sales however, are more of a concern, coming in at 23.1 mb last week. USDA's next WASDE report on May 10 will get a lot of attention, offering a new round of new-crop estimates, but they are all just starting guesses until we find out more about how planting actually goes this month. Technically, cash corn is back to within a dime of its 2019 high and the weekly stochastic has turned up. There were 775 deliveries of May corn late Wednesday. DTN's National Corn Index closed at $3.42 Wednesday, priced 26 cents below the July contract and back in its narrow, sideways range. In outside markets, the June U.S. dollar index is up 0.13 and outside commodities are mixed. June crude oil is down $1.92 after Wednesday's reported build in crude supplies, ignoring concerns about tighter sanctions on Iran and political unrest in Venezuela.

Soybeans:

The downward slide in soybeans continued for a fifth consecutive day. July soybeans dropped 8 1/2 cents Thursday, reaching a new contract low of $8.43 1/4. On the surface, noncommercial selling continues to drive prices lower, finding no significant opposition as U.S. soybeans face record ending supplies in 2018-19. Early Thursday, USDA said 11.5 mb of soybeans were sold last week, small amounts to China and Netherlands. 20.8 mb of soybeans were shipped, well below the 36.6 mb needed each week to reach USDA's export estimate of 1.875 billion bushels (bb) by the end of August. Without those exports, U.S. ending stocks are at risk of nearing 1 bb in 2018-19. The one thing that could alleviate some of the hopelessness prices are currently experiencing is an actual trade agreement with China as traders are not interested in comments saying, "we're close." Until China's tariff on U.S. soybeans is dropped, Brazil's soybeans continue to offer the better bargain for China and there is not much hope of being able to move the big U.S. surplus that has built up the last 10 months. Fundamentally, soybean prices remain at risk of trading lower. Technically, the speculative crowd continues to bet on lower prices and the trend is clearly down. May deliveries on late Wednesday totaled 983 for soybeans, 295 for meal and 502 for soybean oil. DTN's National Soybean Index closed at $7.66 Wednesday, priced 86 cents below the July contract and near its lowest price in six months.

Wheat:

July KC wheat ended up a nickel at $4.05 Thursday, but it was the Chicago and Minneapolis contracts that attracted more buying attention. July Chicago wheat closed up 8 cents at $4.44 with more heavy rain in the seven-day forecast for SRW wheat country, adding to adverse conditions in the eastern Midwest. July Minneapolis wheat gained 8 3/4 cents to $5.20 3/4, starting to show some concern about difficult planting conditions, especially in the Dakotas and Minnesota. The forecast is not as wet for the northwestern U.S. Plains, but the air temperatures remain below normal and are not able to help with drying fields or warming soil temperatures, still in the 40s. The Wheat Quality Council's HRW Wheat Tour finished Thursday, estimating a yield of 47 bushels an acre, up from last year's 38 bushels. The average guess of the Kansas wheat crop came in at 306.5 mb, up from 277 mb a year ago. As welcome as it is for producers to see two days of higher wheat prices, the fundamental outlook remains bearish for wheat. USDA's May 10 WASDE report is likely to offer another reminder that the new season on June 1 will start with roughly 1.1 bb of old-crop carry and face the possibility of a larger world wheat crop in 2019-20. Weather will have a lot to say about how the new season actually turns out, and so far, crop conditions are mostly favorable in the large wheat regions. Technically, spot KC wheat is near its lowest prices in 13 years, a historically cheap price that is finding no bullish arguments yet. Late Wednesday, May deliveries totaled 324 for Chicago wheat and none again for KC wheat. DTN's National HRW index closed at $3.85 Wednesday, up from its lowest in over a year and 15 cents below the July contract. DTN's National SRW index closed at $4.08, trading up from its March low.

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

FollowTodd on Twitter @ToddHultman1

(CZ)

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