DTN Closing Grain Comments

General Comments:

September corn closed up 9 1/4 cents per bushel and December corn was up 8 1/2 cents. August soybeans closed up 4 1/2 cents and November soybeans were up 4 1/2 cents. September KC wheat closed up 20 cents, September Chicago wheat was up 16 3/4 cents and September Minneapolis wheat was up 12 1/2 cents. The September U.S. dollar index is down 0.013 at 96.690. The Dow Jones Industrial Average is up 138.91 points at 26,999.11. August gold is down $4.60 at $1,407.90, September silver is down $0.09 at $15.14 and September copper is down $0.0085 at $2.6855. August crude oil is down $0.21 at $60.22, August heating oil is down $0.0111, August RBOB is down $0.0154 and August natural gas is down $0.033.

Corn:

December corn closed up 8 1/2 cents at $4.48 Thursday and if you try to relate the higher close to USDA's new estimates, you'll be scratching your head. USDA increased its estimate of U.S. ending corn stocks from 1.675 billion bushels (bb) to 2.010 bb for 2019-20, more than Dow Jones' survey expected, but the new number was not convincing to the market. As expected, USDA used the June 28 planting estimate of 91.7 million acres, which has a big flaw and will likely be corrected by a second planting survey, due for release on Aug. 12. Old-crop ending corn stocks increased to 2.340 bb, largely due to a 100-mb reduction in the export estimate, which was not surprising. Total export commitments for corn are down 15% in 2018-19 from a year ago and had another bearish showing of export sales earlier Thursday. With USDA's new-crop estimate increased from 13.680 bb to 13.875 bb, world ending corn stocks also increased more than expected, from 290.5 million metric tons (mmt) to 298.9 mmt (11.77 bb) for 2019-20. Fundamentally speaking, most would be better off to stick with USDA's June estimates until the Aug. 12 WASDE report brings the updated planting survey. In other news, Tropical Storm Barry is threatening to bring heavy rain amounts to Louisiana this weekend, causing flooding and creating more transportation problems along the lower Mississippi River. Technically, Thursday's higher close turned the trend in cash corn up again. DTN's National Corn Index closed at $4.25 Wednesday, 10 cents below the September contract and down from this year's high. In outside markets, most non-ag commodities are lower while the Dow Jones Industrials threaten to close above 27,000.

Soybeans:

November soybeans closed up 4 1/2 cents at $9.17 1/4 Thursday, a modest celebration after USDA reduced its estimate of U.S. ending soybean stocks from 1.045 bb to 795 mb for 2019-20. As expected, USDA used the 80.0 million acre planting estimate from June 28 and also reduced the yield estimate from 49.5 to 48.5 bushels per acre. The new crop estimate of 3.845 bb was down from last month's 4.150 bb estimate and, like corn, may also see an adjustment in the Aug. 12 WASDE report. Earlier Thursday, USDA said there were 4.9 mb of export sales last week and 25.4 mb of shipments. Total export commitments are on track to reach USDA's export estimate, but it depends on China shipping its 210 mb of outstanding sales -- an uncertain prospect. USDA reduced its estimate of 2019-20 world soybean stocks from 112.7 mmt to 104.5 mmt (3.84 bb), largely due to the lower estimate of U.S. production. It was also interesting that in the age of African swine fever, the estimate of China's soybean imports stayed unchanged at 87.0 mmt. Fundamentally speaking, without China's cooperation, the outlook for soybean prices remains bearish, but less production in 2019 has the ability to ease the bearishness. Technically speaking, the trend is sideways in cash soybeans with support around $7.85. DTN's National Soybean Index closed at $8.23 Wednesday, 72 cents below the August contract.

Wheat:

September KC wheat jumped up 20 cents to $4.61 1/2 Thursday, boosted by USDA's lower-than-expected estimates of U.S. and world ending wheat stocks. In the U.S., the 2019-20 ending stocks estimate fell from 1.072 bb to 1.000 bb, largely helped by a 50 mb increase in the new-crop export estimate and a 41 mb increase in old-crop feed demand. The bigger surprise came in world numbers where USDA dropped the ending stocks estimate from 294.3 mmt to 286.5 mmt or 10.53 bb. Several wheat producers contributed small reductions in crop estimates, including Australia, Canada, Europe, Russia and Ukraine. The U.S. actually showed slightly higher wheat production of 1.921 bb, 804 mb of which was for HRW wheat. Thursday's lower estimates gave wheat prices an unexpected boost, but even after Thursday's lower estimates, USDA's world production estimate of 771.46 mmt or 28.35 bb is still a record high. Technically, the trend is currently sideways for cash SRW wheat and down for HRW and HRS wheats. DTN's National HRW Index closed at $4.20 Wednesday, 21 cents below the September contract. DTN's National SRW Index closed at $4.85, down from its highest prices in four years.

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

Follow him on Twitter @ToddHultman1

(CZ)

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