DTN Closing Grain Comments

General Comments:

July corn closed up 5 3/4 cents per bushel and December corn was up 5 cents. July soybeans closed down 1 cent and November soybeans were down 2 cents. July Kansas City wheat closed up 9 1/2 cents, July Chicago wheat was up 19 1/4 cents and July Minneapolis wheat was up 18 cents.

The June U.S. dollar index is trading down 0.386 at 96.865. The Dow Jones Industrial Average is up 85.28 points at 25,624.85. August gold is up $9.00 at $1,342.60, July silver is up $0.11 at $14.90 and July copper is up $0.0260 at $2.6490. July crude oil is up $0.12 at $51.80, July heating oil is down $0.0108, July RBOB is down $0.0058 and July natural gas is down $0.063.

Corn:

July corn gained back 5 3/4 cents to $4.20 1/2 Thursday, an active day of trading that saw early losses vanish by midmorning. Trying to figure out how much corn will be produced in 2019 is this year's big challenge, and it will be a while before there's enough information to slim down the range of guesses. Wednesday's weather map has rain in the southern Midwest and southeastern U.S., giving better opportunities for planting in the northern and Western Corn Belt. The seven-day forecast supports a similar trend with the heaviest rains confined to the southeastern U.S. The problem of course, is that it's already June 6 and many areas will need time to dry, even if the weather stayed dry the rest of the month. The demand side of the market is not getting much attention these days but is becoming more bearish. USDA said early Thursday, last week's corn export sales showed net cancellations of roughly 300,000 bushels and shipments at 30.3 million bushels (mb). Total shipments are still above last year's pace, but have not been meeting USDA's estimated weekly pace as of late. USDA also reported U.S. ethanol exports were down 7% in April from a year ago and were down 22% in the first four months of 2019 from a year ago. Fundamentally speaking, the outlook for corn prices remains neutral to bullish with a strong bullish scenario possible in 2019. Technically, the trend of cash corn prices remains up and appears to be finding some resistance near $4.54, its four-year high. DTN's National Corn Index closed at $3.88 Wednesday, 26 cents below the July contract and near its highest prices in four years. In outside markets, the June U.S. dollar index is trading down 0.39, near its lowest price of May with the Labor Department set to release its monthly unemployment report on Friday morning.

Soybeans:

July soybeans ended down a penny at $8.68 3/4 Thursday, a quieter day of low volume trading in the midst of this year's planting confusion. Relatively drier weather has helped planting conditions in the western and northern Midwest lately, and that trend is expected to continue the next seven days. For southern areas like Missouri and Arkansas, however, heavy rains and flooding remain a persistent concern. USDA's WASDE report on June 11 may make some adjustment to planting estimates, but the market information is not available yet for a reliable number. Some make a case for higher soybean acres coming from unplanted corn, but field conditions have been wet enough across such a large area that total soybean acres could be less than expected. Early Thursday, USDA said last week's soybean export sales totaled 18.7 mb and shipments totaled 20.8 mb, well below the 34.8 mb of exports needed each week to meet USDA's export estimate for 2018-19. A U.S. ending stocks estimate pointed above 1 billion bushels (bb), trade disputes with China, Mexico and Japan, and a possibility that soybean yields could still do well in 2019, all make it difficult to envision significantly higher U.S. soybean prices anytime soon. Technically, the trend in cash soybeans has changed back to sideways, reflecting uncertain planting conditions. DTN's National Soybean Index closed at $7.88 Wednesday, 82 cents below the July contract and possibly finding resistance near $8.00.

Wheat:

After a 22 3/4-cent loss on Wednesday, July KC wheat closed up 9 1/2 cents at $4.55 1/4, while heavy rain fell over central Oklahoma and a part of southern Kansas, producing flash flood warnings in a prime winter wheat region. Scattered showers visited neighboring areas, keeping flash flood watches active in the surrounding region. The other two wheats closed even higher with July Chicago up 19 1/4 cents and July Minneapolis wheat up 18 cents. SRW wheat areas have had to contend with excess moisture for months and there is more rain ahead in the seven-day forecast. In the case of spring wheat, rain amounts that were expected to help crops in the western Canadian Prairies are being reduced as we get closer to the weekend. On the other hand, Russia's spring wheat region is expecting helpful rains and variable temperatures the next 10 days. Spring wheat in the U.S. should be doing well, slowly emerging at a time when the forecast calls for light-to-moderate showers in the northwestern U.S. Fundamentally, the U.S. continues to contend with adverse weather, but it is not yet clear that wheat production will be down enough to significantly reduce U.S. ending wheat supplies in 2019-20. Technically, the trend is currently up for cash SRW and HRS wheats and sideways for HRW wheat. DTN's National HRW index closed at $4.25 Wednesday, down from its recent three-month high and 21 cents below the July contract. DTN's National SRW index closed at $4.72, also down from its highest price in three months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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