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DTN Early Word Grains         05/24 06:02

   Grains Higher Ahead of Next Rain, Long Memorial Day Weekend

   July corn is up 4 1/4 cents per bushel, July soybeans are up 3 cents, and 
July K.C. wheat is up 5 1/2 cents.

By Tregg Cronin
DTN Contributing Analyst

6:00 a.m. CME Globex:   July corn is up 4 1/4 cents per bushel, July soybeans 
are up 3 cents, and July K.C. wheat is up 5 1/2 cents.

CME Globex Recap:   Equity markets have stabilized overnight from Thursday's 
selloff, stoked by the deteriorating trade talks between the U.S. and China. 
The second Market Facilitation Payment (MFP) program was announced in part 
during the session Thursday with additional details released after the close. 
In our view, the announcement of a second program at this juncture would 
suggest a trade deal is nowhere close and the Administration is readying for a 
long, drawn-out affair. Grains are higher overnight with most contracts working 
on solid weekly gains. The confusion related to the second round of MFP 
payments along with rumors over higher prevent plant coverage is making the tea 
leaves especially difficult to read at the moment. The bottom line is 
additional moisture is on the way and final plant dates for many areas of the 
Corn Belt will be passed this Saturday with another tranche hitting on June 5.

OUTSIDE MARKETS:   Previous closes on Thursday showed the Dow Jones Industrial 
Average down 286.14 at 25,490.47 and the S&P 500 down 34.03 at 2,856.27 while 
the 10-Year Treasury yield ended at 2.296%. Early Friday, the June DJIA futures 
are up 177 points. Asian markets are mixed with Japan's Nikkei 225 down 33.92 
(-0.16%) and China's Shanghai Composite up 0.48 points (0.02%). European 
markets are higher with London's FTSE 100 up 42.27 points (0.58%), Germany's 
DAX up 94.91 points (0.79%) and France's CAC 40 up 51.3 points (0.87%). The 
June Euro is up 0.001 at 1.120 and the June U.S. dollar index is down 0.118 at 
97.605. The June 30-Year T-Bond is down 18/32nds, while June gold is down $4.60 
at $1,280.80 and July crude oil is up $0.60 at $58.51. Soybeans on China's 
Dalian Exchange were up 0.03% while soybean meal was down -0.82%.



   BULL                                       BEAR
1) Rumors circulated Thursday evening a    1) Corn export sales missed the
   second disaster aid package was being      level needed to hit the USDA
   readied by the Administration to pay       forecast for the second time in
   producers who could not seed ground or     three weeks.
   had losses due to flooding this spring.
2) Soybean export sales of 19.7 million    2) The Bloomberg Commodity Index
   bushels (mb) were well better than the     traded to the lowest level
   6.9 mb needed weekly to hit the USDA       Thursday since January 3 as crude
   forecast.                                  oil plunged through its 200-day
                                              moving average.
3) China's first auction of state corn     3) The U.S. Dollar Index traded to
   this year saw 90.7% of the total           the highest level since May 16,
   offered purchased at around $236.88 per    2017, Thursday before reversing
   metric ton (mt) ($6.02/bushel).            to close lower.


   CORN  Corn futures are higher Friday morning following yesterday's lower 
close and the first down day in eight sessions. Overnight, the rumor mill was 
churning hard with sources close to the White House talking of raising the 
insurance guarantee percentage for prevented planting on corn from 55% to as 
much as 70-90%. If verified, it would definitely make the decision easier for 
producers who are struggling between prevented planting and mudding in a late 
crop. The decision to plant or not plant would still not be black and white as 
producers would have to weigh a potential Market Facilitation Payment against 
higher Prevented Planting coverage. The higher Prevented Planting coverage is 
just speculation at this juncture but it adds to an already murky operating 
environment for U.S. producers in 2019. Export sales in the week ended May 16 
totaled 17.4 mb vs. the 29.3 mb needed to hit the USDA forecast. Commitments as 
a percentage of the USDA export forecast at 80.89% is the lowest for this time 
of year since 2001, indicating the high level of sales needed through August to 
achieve the USDA forecast. Shipments are also a concern at 64.73% of the USDA's 
export forecast, above the 57.79% from last year but the third lowest of the 
last 19 years. The competition from Argentina, Brazil and Ukraine should be 
present the rest of the calendar year.

   SOYBEANS  Soybeans are higher Friday morning, sitting inside Thursday's 
session but well off the previous day's close. Soybean traders are as confused 
as anyone as to the events of the last 24-36 hours. Ideas of big MFP payments 
were mostly struck down Thursday with reports producers would receive a 
non-specific payment rate based on acres actually planted in 2019. Other 
reports suggested there would not be a payment rate on any crop, but rather a 
county-wide payment which would end up being similar to last year. Presumably, 
the first payment would come after acreage certification in July but rounds two 
and three of this second MFP payment are to-be-determined. Export sales last 
week totaled 19.6 mb vs. the 6.2 mb needed weekly to hit the USDA forecast. 
Export sales are not the issue, but rather, a slow export pace due to river 
logistics. At 70.24%, the shipments as a percentage of the USDA forecast are at 
the lowest on record going back to 2000. There would need to be 35.2 mb of 
soybean exports every week to achieve the USDA forecast, 4.6 mb above the 
previous record pace from a year ago. Regardless of what program ends up being 
announced, we still feel soybeans will take the brunt of the price declines due 
to an oversupplied balance sheet with additional new crop on the way.

   WHEAT  Wheat markets are higher as prices remain inside Thursday's rather 
wide range More importantly, markets are working on their second higher weekly 
close in a row. As with corn and soybeans, wheat traders spent much of the day 
trying to decipher the press reports from Washington D.C., and the impact on 
marketing decisions. Obviously, the discussion for wheat is much different than 
it is for corn and soybeans as both winter and spring wheat acres are already 
in the ground. Still, there is likely to be a fair amount of prevented planting 
in South Dakota and southern North Dakota. Heavy rains are still forecast for 
northern Texas, Oklahoma, Kansas and Missouri the next seven days, having an 
impact on heading and flowering. The timing of these rains with respect to the 
stage the winter wheat is in could not be worse for avoiding a vomitoxin and 
test weight issue. Wheat export sales last week totaled 1.8 mb for old crop and 
12.7 mb for new crop. New crop commitments of 122.1 mb are solid and 137% above 
the same timeframe a year ago. That said, global wheat prices have not followed 
U.S. prices to the same degree on this rally. In the process, U.S. HRW has 
pushed itself back to a premium against Russian, German and Baltic wheat on a 
FOB basis for all available slots. It is rather telling that U.S. wheat is not 
fighting for export business during its harvest slot and would appear to be 
focusing on second half export business once the bulk of the EU/FSU exportable 
surplus has been shipped.

              DTN Cash   Change From    National      Contract   Change from
Commodity     Index      Prev Day       Avg. Basis    Month      Prev Day
Corn:         $3.63      -$0.05         -$0.27        Jul        -$0.001
Soybeans:     $7.39      -$0.07         -$0.82        Jul        $0.002
SRW Wheat:    $4.46      -$0.02         -$0.25        Jul        $0.004
HRW Wheat:    $4.10      -$0.07         -$0.16        Jul        $0.000
HRS Wheat:    $4.91      -$0.09         -$0.43        Jul        $0.002


   Tregg Cronin can be reached at 

   Tregg can be followed throughout the day on Twitter @5thWave_tcronin 



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