DTN Closing Grain Comments 06/14 14:05
Front-Month Corn Leads Push Higher
July corn closed up 11 cents Friday as the market bid front-month corn
prices higher a second day. July contracts of soybeans and winter wheat were
also higher on the day, facing adverse weather ahead, while spring wheat ended
the day 3 cents lower.
By Todd Hultman
DTN Lead Analyst
July corn closed up 11 cents per bushel and December corn was up 7 3/4
cents. July soybeans closed up 8 3/4 cents and November soybeans were up 8 1/4
cents. July KC wheat closed up 8 cents, July Chicago wheat was up 3 cents and
July Minneapolis wheat was down 3 cents. The June U.S. dollar index is trading
up 0.536 at 97.535. The Dow Jones Industrial Average is down 26.23 points at
26,080.54. August gold is down $0.30 at $1,343.40, July silver is down $0.09 at
$14.81 and July copper is down $0.0280 at $2.6285. July crude oil is up $0.55
at $52.83, July heating oil is up $0.0269, July RBOB is up $0.0244 and July
natural gas is up $0.060.
For the week:
July corn closed up 37 1/4 cents and December 2019 corn was up 29 3/4 cents.
July soybeans were up 40 1/2 cents and November 2019 soybeans were also up 40
1/2 cents. July Kansas City wheat was up 27 1/4 cents, July Chicago wheat was
up 34 cents, and July Minneapolis wheat was down 2 3/4 cents.
July corn closed up 11 cents at $4.53 Friday, showing a second day of
increased demand for corn's front-month contract. Friday's close was a new
contract high for corn, securing a 37 1/4 cent gain on the week. Friday's
seven-day forecast expects heavy rains from Kansas and Oklahoma to the
northeastern U.S., not giving producers in the Eastern Corn Belt (ECB) much
hope for planting anytime soon. If that wasn't enough, the extended forecast
also looks wet for the ECB out to at least June 28. Front-month corn and cash
corn prices are leading the push higher as traders warm up to the idea that
U.S. ending corn supplies are likely to tighten more than previously expected
in 2019-20. On the demand side, factors are mixed as rising U.S. corn prices
are encouraging buyers to seek other sources, but also raising concerns among
anyone needing corn this year that they should not wait to secure what they
need. USDA announced early Friday 4.95 million bushels (125,613 mt) of new-crop
corn were sold to unknown destinations. Fundamentally speaking, the
consistently wet forecasts in June are keeping many of us concerned about the
ability to produce corn in the U.S. in 2019, supporting a neutral to bullish
price outlook. Technically, the trend remains up as cash corn prices near their
highest prices in five years. DTN's National Corn Index closed at $4.20
Thursday, 22 cents below the July contract. In outside markets, the June U.S.
dollar index is trading up 0.54 ahead of Wednesday afternoon's Federal Reserve
July soybeans closed up 8 3/4 cents at $8.96 3/4 Friday, securing a 40 1/2
cent gain on the week. Even though the soybean crop has a better chance of
maintaining its planting estimates, this month's rain is not helping its
prospects in the eastern Midwest either. Earlier this week, USDA Chief
Economist Robert Johansson suggested soybean yield estimates may be adjusted
lower in the July 11 WASDE report, which seems as reasonable as USDA's move to
lower the corn yield estimate in June. The similarities with corn end there,
however, as soybeans are looking at over 1 billion bushels of U.S. ending
soybean stocks in 2018-19 and possibly more in 2019-20 if the trade situation
with China does not get resolved. Early Friday USDA issued a strange
announcement, saying 4.8 mb of U.S. soybeans (130,000 mt) were sold to China
for 2018-19 and 5.0 mb (136,000 mt) of the same were cancelled. Another 4.8 mb
of U.S. soybeans (130,000 mt) were sold to unknown destinations for 2018-19.
While July soybeans have gained over a dollar from the low in May, trading
significantly higher from here remains difficult with several bearish concerns
in play. Technically, the trend in cash soybeans is sideways. DTN's National
Soybean Index closed at $8.10 Thursday, $0.78 below the July futures contract
and a new two-month high.
July KC wheat traded both sides of Thursday's close and finished up 8 cents
Friday at $4.76 1/4, posting a 27 1/4 cent gain on the week. With winter wheat
crops getting close to harvest it is not helpful to see heavy rain amounts in
the seven-day forecast from Kansas and Oklahoma across the eastern Midwest
threatening problems for both HRW and SRW wheat crops. Among U.S. wheat
contracts, July Chicago was this week's big winner, posting a gain of 34 cents,
after adding 3 more cents on Friday. For spring wheat in the northwestern U.S.,
the forecast is for dry to light rain amounts, favorable for crops, while
western Canada has beneficial rain in the forecast. Outside of North America,
Spain and eastern Australia are commonly cited as two areas that need rain, but
most wheat regions appear to be doing well. The $1.20 rally in July Chicago
wheat since May 13 is impressive, but with record ending wheat supplies
expected in 2019-20, it is difficult to expect much more on the upside.
Technically, the trends are up for SRW and HRS wheats, sideways for HRW wheat.
DTN's National HRW Index closed at $4.49 Thursday, down 19 cents from the July
futures contract. DTN's National SRW Index closed at $5.19 Thursday, its
highest price in over nine months.
Todd Hultman can be reached at email@example.com
Follow him on Twitter @ToddHultman1
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