DTN Before The Bell Grains

Grains Prices Higher; Eastern Fields Remain Soggy

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

July contracts of corn, soybeans and all three wheats were higher Monday morning after more rain fell over the weekend and heavy amounts continue to show up in the seven-day forecast. Outside markets were mostly lower.

Other Markets:

Dow Jones: Higher
U.S. Dollar Index: Lower
Gold: Lower
Crude Oil: Lower

Corn:

July corn is up 8 1/4 cents early Monday as prospects for planting the final 10% or so of the corn crop are not looking good. The Eastern Corn Belt saw more heavy rain over the weekend. According to Monday's seven-day forecast, more heavy amounts are in store for most of the Corn Belt, especially the eastern half where the rains will just not let up. Given the late date, it appears the final opportunities for late corn planting are being shut out and it will be interesting to see how much progress was made last week in Monday afternoon's report from USDA. Fundamentally, it is fair to say U.S. ending corn stocks are going to be lower in 2019-20. Just how much lower is the big question for this summer's corn prices. Technically, the trend of cash corn prices remains up as prices trade at their highest levels in five years. DTN's National Corn Index closed at $4.31 Friday, its highest price in five years and 22 cents below the July contract. In outside markets, the June U.S. dollar index is down 0.20 ahead of a two-day Federal Reserve meeting that starts Tuesday.

Soybeans:

July soybeans are up 13 3/4 cents early Monday, trading at its highest prices in two months. As described for corn above, planting remains extremely difficult in the eastern Midwest with more heavy rain amounts in this week's forecast. In recent history, the record amount of prevented soybean plantings was 2.2 million acres in 2015 and more than that seems likely in 2019. The other risk to this year's crop is that yields will be down and we won't have much evidence to support those guesses until the September WASDE report. Even with all the crop concerns for 2019, it is still difficult to make a bullish case for soybean prices when starting the new season with over 1 billion bushels of carry and there is no sign being even close to a trade agreement with China. Technically, the trend in cash soybean prices is up, but prices are still below the 2019 high at $8.35. DTN's National Soybean Index closed at $8.19 Friday, a new two-month high and 76 cents below the July contract.

Wheat:

July KC wheat is trading up 9 3/4 cents early, getting assistance from the rally in corn and showing concern about getting more rain over the weekend on a wheat crop that is getting close to harvest. More heavy rain fell in Oklahoma, southeastern Kansas and southern Missouri over the weekend in addition to the SRW wheat areas of the eastern Midwest. The unwelcome amounts make harvest difficult and add to concerns that wheat quality will be down when it does get harvested. On the more bearish side, the forecast for the western Canadian Prairies has a better chance for helpful rains this week. July Minneapolis wheat is also trading higher early Monday, up 4 1/2 cents, but also appears reluctant to trade above the March high of $5.76. Technically, the trend is currently up for cash SRW and sideways for HRW and HRS wheats. DTN's National HRW Index closed at $4.56 Friday, down from its recent three-month high and 20 cents below the July contract. DTN's National SRW Index closed at $5.23, its highest price in over nine months.

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

Follow him on Twitter @ToddHultman1

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Todd Hultman