DTN Closing Grain Comments

General Comments:

July corn closed down 19 3/4 cents per bushel and December corn was down 19 1/2 cents. July soybeans closed up 12 cents and November soybeans were up 10 3/4 cents. September Kansas City wheat closed down 20 cents, September Chicago wheat was down 19 1/2 cents and September Minneapolis wheat was down 7 1/4 cents.

The September U.S. dollar index is trading down 0.027 at 95.715. The Dow Jones Industrial Average is up 52.32 points at 26,578.90. August gold is up $1.30 at $1,413.30, July silver is up $0.05 at $15.25 and September copper is down $0.0015 at $2.7150. August crude oil is down $1.15 at $58.28, August heating oil is down $0.0247, August RBOB is down $0.0253 and August natural gas is down $0.011.

For the week:

July corn closed down 22 cents and December 2019 corn was down 22 cents. July soybeans were up 3 cents and November 2019 soybeans were down 4 1/2 cents. September Kansas City wheat was down 3 cents, September Chicago wheat was up 3 1/2 cents, and September Minneapolis wheat was up 10 1/4 cents.

Corn:

December corn closed down 19 1/2 cents at $4.31 1/2 Friday as many were stunned to hear USDA estimate 91.7 million acres of corn plantings, much more than the analysts in Dow Jones' survey expected. USDA Crop Comments in the report explained, "Farmers responding to the survey indicated that 83% of the intended corn acreage had been planted at the time of the interview, significantly lower than the 10-year average." Judging by the state breakdowns, which showed no or only slight reductions for states in the Eastern Corn Belt, it looks like USDA went on the assumption that the remaining 17% of corn got planted -- an assumption that is highly unlikely. NASS announced that it would survey 14 states in July and release new planting estimates in the Aug. 12 Crop Production report. Until then, the fundamental outlook for corn prices is now looking more neutral than bullish. USDA also said there were 5.20 billion bushels (bb) of U.S. corn stocks on hand as of June 1, a little less than expected. Technically, Friday's lower close turned the trend in corn to sideways, back down from the highest cash prices in five years. DTN's National Corn Index closed at $4.25 Thursday, 21 cents below the July contract. Outside markets were mostly quiet and mixed on Friday with attention on the G-20 meeting in Japan and on Saturday's meeting between the presidents of China and the U.S.

Soybeans:

November soybeans closed up 10 3/4 cents at $9.23 Friday, getting a surprising lift from USDA's lower-than-expected planting estimate of 80.0 million acres. The estimate was lower than analysts in Dow Jones' survey were looking for, and if it stands, will be the lowest planting since 2013. State-by-state comparisons showed large reductions throughout the entire Midwest -- reductions not seen in corn. A quick, rough estimate of USDA's lower planting could reduce new-crop ending soybeans stocks from 1.045 bb to roughly 600 million bushels (mb) -- a significant moderating influence for prices. Current ending stocks of soybeans are still on track, however, for roughly 1 bb as USDA found 1.79 bb of U.S. soybeans on hand as of June 1. Earlier Friday, USDA said 20 mb (544,000 mt) of U.S. soybeans were sold to China for 2018-19, giving China roughly 220 mb of outstanding soybean sales in the current season. Fundamentally speaking, the uncertainty over determining the size of this year's soybean crop remains high, but Friday's report suggests we may be looking at less burdensome supplies in 2019-20. Technically, the trend in cash soybeans remains up and is suspect. DTN's National Soybean Index closed at $8.14 Thursday, priced $0.80 below the July futures contract and down from its highest price in a year.

Wheat:

September KC wheat dropped 20 cents Friday to $4.61 1/2, influenced by the drop in corn prices and pressured by a slight increase in USDA's estimate of winter wheat acres. USDA estimated all wheat acres at 45.6 million, the lowest in over 100 years as was anticipated. Winter wheat acres were estimated at 31.8 million, a little above expectations and spring wheat came in at a slightly less-than-expected 12.4 million acres. June 1 wheat stocks totaled 1.072 bb and that will be the ending stocks of 2018-19, down slightly from 1.102 bb in 2017-18. U.S. wheat exports are off to a better start in 2019-20, but there is a long way to go and plenty of competition on the way as both USDA and the International Grains Council are expecting record world wheat crops in 2019. Temperatures remain high and stressful to wheat in western Europe, but December milling wheat in Paris closed down 1.75 euro or -0.9% Friday, not showing much concern. Fundamentally, the outlook for wheat remains bearish with weather surprises still possible. Technically, the trends for SRW, HRW and HRS wheat are all sideways. DTN's National HRW index closed at $4.52 Thursday, down 30 cents from the July futures contract. DTN's National SRW index closed at $5.32 Thursday, among its highest prices in 10 months.

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

Follow him on Twitter @ToddHultman1

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