DTN Closing Grain Comments

Row Crops End Lower a Second Day

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

September corn closed down 5 3/4 cents per bushel and December corn was down 5 3/4 cents. August soybeans closed down 14 cents and November soybeans were down 14 cents. September Kansas City wheat closed down 2 3/4 cents, September Chicago wheat was down 1/4 cent and September Minneapolis wheat was down 2 1/4 cents.

The September U.S. dollar index is trading up 0.515 at 97.060. The Dow Jones Industrial Average is down 21.36 points at 27,337.80. August gold is down $6.20 at $1,407.30, September silver is up $0.28 at $15.64 and September copper is down $0.0160 at $2.6950. August crude oil is down $2.09 at $57.49, August heating oil is down $0.0507, August RBOB is down $0.0451 and August natural gas is down $0.104.

Corn:

December corn closed down 5 3/4 cents at $4.41 1/4 Tuesday, pressured by expectations for below normal temperatures in the central and Eastern Corn Belt the next eight to 14 days. Temperatures are expected to be higher this weekend with possible triple-digit temperatures in the Western Corn Belt. Early next week, however, temperatures moderate, offering more favorable conditions for pollination. Late Monday, USDA said just 17% of the corn crop is silking, so the crop still has a ways to go before the pollination period is upon us. USDA also said 58% of the corn crop was rated good to excellent, up 1 percentage point from last week, but still the lowest in seven years. The poorest crop ratings for corn continue to come from Missouri and the eastern Midwest. Those problems remain a bullish source of support for prices in this uncertain trading environment. Fundamentally speaking, the outlook for corn prices is neutral at this higher level, but there is still a bullish possibility that actual plantings are less than expected. Technically, the trend in cash corn is up and choppy with plenty of unknowns still confronting traders. DTN's National Corn Index closed at $4.33 Monday, 8 cents below the September contract and a new five-year high. In outside markets, the September U.S. dollar index is up 0.51 with ongoing concerns about economic growth in Europe offering a counter to expectations for a rate cut in the U.S.

Soybeans:

November soybeans closed down 14 cents at $9.06 Tuesday, also responding to more moderate temperatures in the forecast after this weekend. It should also be pointed out the forecast is fairly dry across the Midwest after the next five days and that will also be a factor to watch as soybean crops progress. Late Monday, USDA said 22% of soybeans were blooming and 54% of the crop was rated good to excellent, up 1 percentage point from last week, but still the lowest rating in seven years. As with corn, the more problematic soybean crop conditions are found in Missouri and to the east of Iowa. Members of the White House staff continue to say China is expected to make large purchases of U.S. farm products, but so far, there is no sign of that happening. DTN Cash Grains Analyst Mary Kennedy noted that she sees no sign of new business yet in the Pacific Northwest cash quotes. Looking at cash soybean prices across the U.S., the national average basis of 70 cents below August is roughly 30 cents narrower than what we saw at harvest time, but still exceptionally wide by historic standards. That is a bearish reflection of the record U.S. soybean supplies available in 2018-19, and another reason why it's difficult for November soybeans to trade above $9.50. Technically speaking, the trend is sideways in cash soybeans with support around $7.85. DTN's National Soybean Index closed at $8.31 Monday, down from a new one-year high and 70 cents below the August contract.

Wheat:

September KC wheat ended down 2 3/4 cents at $4.46 1/4 Tuesday, a quiet day of trading on low volume, which also went along with a 1.25% drop in Europe's wheat price. Late Monday, USDA said 57% of winter wheat was harvested, which is less than the five-year average of 71%, but not necessarily bad for the crop. The southwestern U.S. Plains are close to being finished and Kansas is 81% complete. The forecast for the central U.S. becomes drier after the next five days and should be helpful to harvest progress. To the north, USDA said 78% of spring wheat is headed and 76% of the crop is rated good to excellent, down 2 percentage points from last week, but still a very good showing. So far in 2019, Chicago wheat prices have held up the best, supported by this year's smaller crop and poor crop conditions. Minneapolis wheat prices on the other hand, continue to trade near their lowest prices in over two years, pressured by the anticipation of higher U.S. ending spring wheat stocks in 2019-20. Fundamentally speaking, the outlook for wheat prices remains bearish in general with record world production expected in 2019. Technically, the trend is currently sideways for all three cash wheats. DTN's National HRW index closed at $4.28 Monday, 21 cents below the September contract. DTN's National SRW index closed at $4.88, down from its highest prices in four years.

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

Follow him on Twitter @ToddHultman1

(CZ)

Todd Hultman