DTN Early Word Grains
Crop Prices Pull Back Early Friday
July corn is down 4 1/4 cents, July soybeans are down 2 3/4 cents and July KC wheat is down 4 1/2 cents.
CME Globex Recap:Dow Jones futures and stock markets overseas are starting lower early Friday after President Donald Trump said he will impose a 5% tariff on Mexican goods June 10 until illegal migrants stop coming to the U.S. For the most part, investors appear to be responding by withdrawing from the market's riskier assets, while gold is trading higher. Yields on 10-year T-notes have dropped to 2.23%.
OUTSIDE MARKETS:Previous closes on Thursday showed the Dow Jones Industrial Average up 43.47 at 25,169.88 and the S&P 500 up 5.84 at 2,788.86, while the 10-yr Treasury yield ended at 2.23%. Early Friday, DJIA futures are down 285 points. Asian markets are lower with Japan's Nikkei 225 down 341.34 (-1.6%) and China's Shanghai Composite down 7.11 points (-0.2%). European markets are lower with London's FTSE 100 down 66.75 points (-0.9%), Germany's DAX down 200.80 points (-1.7%), and France's CAC 40 down 71.53 points (-1.4%). The June euro is down 0.001 cent at $1.116 and the June U.S. dollar index is down 0.13 at 97.92. The September 30-year T-Bond is up 1 6/32nds, while August gold is up $9.40 at $1,301.80 and July crude oil is down $1.30 at $55.29. Soybeans on China's Dalian Exchange were trading lower, while meal had a slight loss.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | The latest seven-day forecast is still expecting moderate rain amounts in the central and Eastern Corn Belt, adding to row-crop planting difficulties. | 1) | There is no talk of resuming trade talks with China yet and the U.S.-Mexico-Canada agreement has yet to be approved. |
| 2) | The DTN National Soybean Index is back above $8.00 and time will tell if the higher prices can be sustained. | 2) | Until China's 25% tariff on U.S. soybeans is eliminated, U.S. ending soybean stocks will continue to increase beyond current record levels. |
| 3) | Heavy rain amounts in the seven-day forecast threaten more flooding in Kansas and Oklahoma, threatening HRW winter wheat crops. | 3) | The latest rally in Chicago wheat is an impressive show of support, but U.S. wheat supplies remain abundant. |
CORN July corn is down 4 1/4 cents early Friday, trimming back what has been a sizable gain this week while rain remains in the seven-day forecast for much of the U.S. Here at the end of the week, the expected totals are diminishing and the extended forecast looks a little more favorable for planting in the northern states, but it will take time for fields to dry. Friday's weather map shows a spot of rain in central Illinois and Indiana but is dry early for the rest of the Corn Belt. Corn export shipments have been running slightly below expectations lately and USDA will have its next update of weekly numbers at 7:30 a.m. CDT. For now, corn prices continue to find legitimate support from 2019 planting problems.
SOYBEANS July soybeans are down 2 3/4 cents and July soybean meal is down $1.90 early Friday, pulling back after a week of sharply higher trading. In the case of soybeans, it is difficult to envision much higher prices, knowing that the U.S. is expecting roughly 1 billion bushels of ending supplies in 2018-19 and aid from the Market Facilitation Program is going to encourage soybean planting. This week's rally has shown bearish noncommercials were understandably nervous after USDA said only 29% of the crop was planted on May 26, but there is still time for progress to be made, if weather allows. The cease in trade talks with China also does not help the case for higher soybean prices. President Trump's plan to raise tariffs on Mexico at a time when the U.S. is trying to work out a trade agreement with Canada and Mexico is another challenge with ramifications for U.S. agriculture.
WHEAT July Kansas City wheat is down 4 1/2 cents early, continuing its choppy up and down pattern of the past three days. Overall, all three wheat prices are on track for a modest gain this week and could finish near their highest closes in three months. Friday's weather map shows rain in central Texas and moderate-to-heavy amounts on the way the next seven days, threatening more flooding problems in Kansas and Oklahoma. SRW wheat in the eastern Midwest also continues to attract more unwelcome rain in the forecast. The western Canadian Prairies is finding opposite concerns with fields looking at a dry forecast and needing more rain. Fundamentally speaking, it is difficult to see enough production problems yet to support significantly higher U.S. wheat prices, but the season is still young.
| x | DTN Cash | Change From | National | Contract | Change from |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $4.09 | $0.18 | -$0.27 | Jul | $0.001 |
| Soybeans: | $8.07 | $0.17 | -$0.82 | Jul | $0.003 |
| SRW Wheat: | $4.92 | $0.24 | -$0.23 | Jul | $0.001 |
| HRW Wheat: | $4.61 | $0.25 | -$0.18 | Jul | -$0.008 |
| HRS Wheat: | $5.18 | $0.14 | -$0.46 | Jul | -$0.005 |
Todd Hultman can be reached at todd.hultman@dtn.com
(KR)
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