DTN Closing Grain Comments

General Comments:

July corn closed up 1 3/4 cents per bushel and December corn was up 5 cents. July soybeans closed up 16 cents and November soybeans were up 16 cents. July KC wheat closed down 3/4 cent, July Chicago wheat was up 1 cent and July Minneapolis wheat was down 3 cents. The June U.S. dollar index is trading down 0.185 at 97.385. The Dow Jones Industrial Average is up 69.88 points at 26,159.49. August gold is down $2.00 at $1,342.50, July silver is up $0.02 at $14.82 and July copper is up $0.0225 at $2.6520. July crude oil is down $0.39 at $52.12, July heating oil is down $0.0217, July RBOB is down $0.0286 and July natural gas is down $0.006.

Corn:

After a higher start Sunday evening, July corn ended up 1 3/4 cents at $4.54 3/4 Monday, showing some hesitation about trading at new highs even though planting prospects still look grim. Monday afternoon's Crop Progress report will likely show planting made progress in the central and Western Corn Belt last week, but more heavy rain fell across the Eastern Corn Belt over the weekend, adding to corn acreage concerns. The seven-day forecast still looks hostile to planting efforts with heavy rains expected across much of the central and Eastern Corn Belt. The extended forecast is looking warmer and drier toward the end of June. One of the bearish sides of the current corn rally is that higher U.S. prices are making export sales more difficult and that should remain true through summer. Early Monday, USDA said 25.7 million bushels (mb) of corn were inspected for export last week, less than the 40.7 mb needed each week to reach USDA's export estimate of 2.200 billion bushels for 2018-19. Fundamentally speaking, cash corn prices should be able to maintain support in the low $4s while traders wait for better estimates of the 2019 corn crop. Technically, the trend of cash corn prices remains up with prices trading at their highest level in nearly five years. DTN's National Corn Index closed at $4.31 Friday, its highest price in nearly five years and 22 cents below the July contract. In outside markets, the June U.S. dollar index is down 0.18 with the Federal Reserve's two-day meeting ready to begin Tuesday.

Soybeans:

July soybeans jumped up 16 cents to $9.12 3/4 Monday, the highest close in two months as planting concerns continue to pressure bearish noncommercials into reducing their net-short positions in soybeans. The persistence of heavy rains in June, especially in the eastern Midwest, and another seven-day forecast for more of the same is making soybean prices more volatile than expected this summer and putting bearish traders in an awkward predicament. Soybean prices may still find themselves in a bearish situation this fall, depending on how much of the crop eventually gets planted. But between now and then, traders are finding it difficult to stay short as prices have rallied over a dollar since their May 13 low. On the demand side for soybeans, Dow Jones reported an April soybean crush estimate of 154.8 mb from the National Oilseed Processors Association, less than expected and down 4% from a year ago. Soybean oil stocks fell from 1.761 billion pounds to 1.581 billion pounds by the end of April, down 24% from a year ago. July soybean oil responded by closing up 0.53 cent at 28.14 cents, its highest close in over a month. Earlier Monday, USDA said 24.8 mb of soybeans were inspected for export last week, less than the 31.0 mb needed each week to reach USDA's export goal by the end of August. Soybean exports continue to struggle without China's full participation and that keeps bearish pressure on ending stocks expectations in 2018-19. Fundamentally, the bearish concerns for soybeans still outnumber the bullish concerns, but the uncertainty surrounding this year's crop conditions are a relatively new feature helping prices the past month. Technically, the trend is up in cash soybeans, 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 traded higher early, but ended the day down 3/4 cent at $4.75 1/2, receiving bullish influence from row crops and also continuing to show concern that higher quality wheat supplies may be turning into lower quality supplies as heavy rains continue to fall over both, HRW and SRW wheat areas. July Chicago prices have gained the most since their low on May 13 and are now toying with new highs in 2019, while SRW wheat areas have been especially wet in the eastern Midwest. Fundamentally, however, it is difficult to see an argument for wheat prices continuing much higher when the rest of the world's wheat regions are doing well and USDA is expecting a record world wheat crop in 2019. USDA has set its expectations for wheat exports at a low 900 mb in 2019-20 and so far, actual inspections are on a neutral pace. USDA said 13.8 mb of wheat were inspected last week, putting total inspections roughly even with a year ago as we start a new season. Technically, the trend is currently up for cash SRW wheat 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

(CZ)

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