DTN Early Word Grains
Grains Sag Lower Ahead of Friday's Reports
December corn is down 3 1/4 cents, November soybeans are down 3 1/4 cents and September KC wheat is down 4 cents.
CME Globex Recap:U.S. stock futures and European stock markets are mixed early Wednesday with a report on U.S. durable goods orders due out at 7:30 a.m. CDT. August crude oil is trading higher with early headlines showing harsh rhetoric traded back and forth between the U.S. and Iran after the U.S. imposed new sanctions against Iran on Monday.
OUTSIDE MARKETS:Previous closes Tuesday showed the Dow Jones Industrial Average down 179.32 at 26,548.22 and the S&P 500 down 27.97 at 2,917.38 while the 10-Year Treasury yield ended at 1.99%. Early Wednesday, the September DJIA futures are up 118 points. Asian markets are lower with Japan's Nikkei 225 down 107.22 (-0.5%) and China's Shanghai Composite down 5.79 points (-0.2%). European markets are mixed with London's FTSE 100 down 2.56 points (-0.03%), Germany's DAX up 7.80 points (0.06%) and France's CAC 40 down 3.12 points (-0.06%). The September Euro is down 0.002 at 1.143 and the September U.S. dollar index is up 0.16 at 95.80. The September 30-Year T-Bond is down 15/32nds, while August gold is down $8.20 at $1,410.50 and August crude oil is up $1.03 at $58.86. Soybeans and meal on China's Dalian Exchange were both slightly lower.
| BULL | BEAR | ||
| 1) | Friday's Acreage report from USDA has a wide range of possibilities and there is a chance corn plantings could be low enough to significantly reduce new-crop ending stocks. | 1) | The U.S. seven-day forecast is slowly turning drier with higher temperatures on the way, more favorable for crop development. |
| 2) | In spite of market fatigue over trade issues, U.S. and Chinese leaders are expected to discuss trade at this week's G-20 meeting. | 2) | The recent rally in U.S. corn, soybeans and wheat prices have hurt their export prospects. |
| 3) | This week's hot temperatures in Europe are catching wheat crops vulnerable to stress. | 3) | Rain in the forecast for the western Canadian Prairie and southern Russia are helpful changes for the world wheat crop. |
CORN December corn is down 3 1/4 cents early Wednesday, showing caution and possibly some nervousness among traders about Friday's Acreage and Grain Stocks reports from USDA. Corn stocks on June 1 are likely to come in near last year's 5.3 billion bushels (bb) as export activity has slowed in the third quarter of 2018-19. USDA's planting estimate however, is not so easy to predict and is likely to have a big price impact after an unprecedented spring of planting difficulties. Anything under 88.0 million acres is likely to earn a bullish response Friday, but the range of possibility is wide. Wednesday's weather map is mostly dry with scattered showers in the Western Corn Belt. The seven-day forecast still has some threat of moderate showers from North Dakota to Ohio, but higher, more summer-like temperatures will be helpful to crops.
SOYBEANS November soybeans are down 3 1/4 cents early Wednesday, sagging lower after touching a three-month high of $9.48 last week, but also staying above its 100-day average at $9.15 while traders wait to see what USDA will say on Friday. With over 1 bb of old-crop ending soybean stocks anticipated, it is difficult to make a case for soybean prices trading higher from here, but there is some uncertainty to watch out for. As with corn, USDA is likely to find plenty of soybeans in the U.S. on June 1, but the planting estimate is more difficult to predict. Less corn acres could translate to more soybean acres, but planting conditions were nearly impossible in several important areas. The other uncertainty has to do with trade with China where talks are getting underway again after a couple of months of no progress. Overall, the outlook for soybean prices remains bearish, but modestly bullish surprises are possible.
WHEAT September KC wheat is down 4 cents early, not finding much to entice new buyers lately. Monday's news of hot temperatures in Europe this week is supportive to prices, but is also offset by chances for helpful showers in the western Canadian Prairies and southern Russia this week. Here in the U.S., the seven-day forecast is mostly dry for the southwestern U.S. Plains and eastern Midwest, more favorable for winter wheat harvest. Moderate showers are expected from Montana to the Great Lakes and offer some benefit to spring wheat crops. Friday's USDA reports don't hold the same level of drama for wheat prices and will be another reminder of how much wheat is in the U.S. and how poor demand is for that wheat. Unless new weather threats emerge in 2019, the outlook for U.S. wheat prices remains bearish with record high world wheat production expected.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $4.31 | $0.02 | -$0.17 | Jul | $0.010 |
| Soybeans: | $8.29 | -$0.05 | -$0.75 | Jul | $0.005 |
| SRW Wheat: | $5.22 | -$0.01 | -$0.13 | Jul | $0.008 |
| HRW Wheat: | $4.48 | $0.02 | -$0.17 | Jul | $0.026 |
| HRS Wheat: | $5.06 | $0.09 | -$0.42 | Jul | $0.042 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter@ToddHultman1
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