DTN Closing Grain Comments

General Comments:

July corn closed up 4 3/4 cents per bushel and December corn was up 4 1/2 cents. July soybeans closed down 6 3/4 cents and November soybeans were down 5 3/4 cents. July Kansas City wheat closed up 10 cents, July Chicago wheat was up 12 1/4 cents and July Minneapolis wheat was up 1 cent.

The June U.S. dollar index is trading down 0.010 at 97.115. The Dow Jones Industrial Average is down 574.05 points at 25,368.32. June gold is up $12.60 at $1,300.00, July silver is down $0.01 at $14.79 and July copper is down $0.0500 at $2.7245. June crude oil is down $0.59 at $61.07, June heating oil is down $0.0116, June RBOB is down $0.0258 and June natural gas is up $0.001.

Corn:

After suffering early collateral damage from news that China responded to Friday's U.S. tariff increases with higher tariffs of their own on $60 billion of U.S. goods, July corn initially traded lower, but then rebounded to finish up 4 3/4 cents at $3.56 1/2 Monday. China does not account for much in the way of corn purchases in the U.S., but soybean prices do influence corn prices and Monday's news also added concerns as to how current trade negotiations with Japan may turn out. Even before China's news came out, a drier five-day forecast was pressuring prices a couple cents lower Sunday evening with some hope for increased planting. Monday morning, USDA said 39.4 million bushels (mb) of corn were inspected for export last week, not quite the 44.3 mb needed each week to meet USDA's export goal, but close. USDA's Crop Progress report may peg corn planting as high as 40% complete on Monday afternoon, but there are still many areas that are not ready and the forecast turns wetter again in the coming weekend. Friday's 2.485 billion bushel (bb) estimate of U.S. ending corn stocks in 2019-20 is probably too high, but we can't rule it out yet, not knowing how demand will turn out if talks with Japan turn contentious. Fundamentally, the price outlook for corn remains roughly neutral with recent history, realizing there is plenty to learn about the new-crop season. Technically, cash corn has dipped back below its one-year average, but is holding above the lower end of its sideways range. DTN's National Corn Index closed at $3.27 Friday, priced 25 cents below the July contract and back in its narrow, sideways range. In outside markets, Dow Jones Industrials are trading down 574 points as investor concerns become apparent again over the trade dispute with China.

Soybeans:

After trading down 18 cents early in the wake of news that China was retaliating with their own tariffs on $60 billion of U.S. goods, July soybeans moderated somewhat Monday, finishing down 6 3/4 cents at $8.02 1/2. While that may be a minor trading victory for the day, the road ahead for soybean prices still looks bearishly bleak, especially as CNBC.com reported there are no plans yet for trade negotiators to meet again. On Friday, USDA estimated U.S. ending soybean stocks just shy of 1 bb after dropping the export estimate by 100 mb. Monday's inspections report kept the same bearish tone, showing 18.9 mb of soybeans inspected for export last week, well below the 31.0 mb needed each week to meet USDA's new export estimate of 1.775 bb. USDA' Crop Progress report is likely to show modest planting progress after last week's 6%, but there is plenty of time for soybeans to wait for better planting conditions. Fundamentally, U.S. soybean prices are feeling the bearish weight of lacking trade while the negotiation table sits quiet in a dark room. Technically, the trend in cash soybean prices remains down with noncommercials comfortably net-short. DTN's National Soybean Index closed at $7.25 Friday, priced 84 cents below the July contract and near its lowest price in 12 years.

Wheat:

On a day that had a sharply bearish beginning for corn and soybeans, July KC wheat showed small losses early and finished a dime higher by the end of Monday's session, settling at $3.97. July Chicago wheat was up even more, rebounding from Friday's new contract low to end up 12 1/4 cents at $4.37. There is no doubt that Friday's WASDE report from USDA was not kind to wheat prices, estimating 1.13 bb of U.S. ending wheat stocks and a 6% increase in world wheat production in 2019. Even though Friday's WASDE numbers were higher than official estimates, few were probably shocked, knowing that exports haven't been doing well for several months and the International Grains Council had already estimated a 4% increase in world wheat production. Wheat did offer a small bullish surprise Monday as USDA reported 31.0 mb of wheat export inspections last week, more than the 23.4 mb needed each week to reach USDA's new export goal of 925 mb by May 31. Fundamentally speaking, it is difficult to be bullish for wheat prices when facing the prospect of larger supplies ahead in 2019, but prices are cheap enough to find support and surprises are always possible. Technically, spot KC wheat remains near its lowest prices in 13 years, while the weekly stochastic is close to showing a bullish change in momentum and deserves monitoring. DTN's National HRW index closed at $3.87 Friday, at its lowest close in over a year and 15 cents below the July contract. DTN's National SRW index closed at $3.97, also at its lowest close in over a year. May grain futures contracts are set to expire Tuesday, May 14.

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

FollowTodd on Twitter @ToddHultman1

(CZ)

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