DTN Closing Grain Comments 07/19 13:50
Soybeans Lead Grains Higher Friday
November soybeans closed up 20 1/4 cents as hot temperatures covered the
Midwest and northeastern U.S. on Friday. December corn was up 6 cents and all
three wheats finished higher, generating some short-covering after a bearish
week of trade.
By Todd Hultman
DTN Lead Analyst
September corn closed up 6 1/4 cents and December corn closed up 6 cents.
August soybeans closed up 20 1/4 cents and November soybeans were up 20 1/4
cents. September KC wheat closed up 7 1/4 cents, September Chicago wheat was up
9 cents and September Minneapolis wheat was up 3 3/4 cents. The September U.S.
dollar index is trading up .36 at 96.81. The Dow Jones Industrial Average is up
70.31 points at 27,293.28. August gold is up $0.10 at $1,428.20, September
silver is down 1 cent at $16.19 and September copper is up $0.0395. August
crude oil is up $0.42 at $55.72, August heating oil is up $0.299, August RBOB
gasoline is up $0.0109 and August natural gas is down $0.029.
For the week:
September corn closed down 23 1/2 cents and December 2019 corn was down 23
1/2 cents. August soybeans were down 11 3/4 cents and November 2019 soybeans
were down 12 1/4 cents. September Kansas City wheat was down 27 1/4 cents,
September Chicago wheat was down 20 1/2 cents, and September Minneapolis wheat
was down 13 1/2 cents.
December corn closed up 6 cents at $4.35 3/4, along with most commodities
Friday. For the week, however, prices were down 23 1/2 cents. Corn prices
continue to chop between roughly $4.20 and $4.70 a bushel with traders keeping
an eye on weather, while we all wait for USDA's second planting survey to be
released Aug. 12. Friday's weather map shows rain in northwestern Minnesota,
but was mostly dry elsewhere with hot temperatures across much of the Corn Belt
through Saturday. Scattered light to moderate showers are expected the next
seven days with heavier amounts for Wisconsin. Milder temperatures in the
forecast for next week are helping ease concerns about corn getting closer to
pollination. It still sounds odd to talk about corn pollinating in late July
and August, but that is where the crop is headed in this unusual year. U.S.
corn exports have fallen off dramatically and are not likely to rebound any
time soon as FOB corn prices in New Orleans are 42 cents higher than comparable
prices at Brazil's ports. Fundamentally, the outlook for corn prices is neutral
with a smaller crop expected in 2019. There is still a bullish possibility the
crop will be even lower than expected, and USDA's next important clue is set
for Aug. 12. Technically, the trend in cash corn is sideways, down from its
highest prices in five years. The DTN National Corn Index closed at $4.17
Thursday, 8 cents below the September contract. In outside markets, the
September U.S. dollar index is up 0.36 with unconfirmed talk that The European
Central Bank may be close to reducing its interest rate by a quarter-percent.
In spite of the stronger dollar, most commodities are trading higher Friday.
November soybeans closed up 20 1/4 cents at $9.19 1/4 Friday, nearly erasing
the last three days of losses and finishing the week with a smaller loss of 12
1/4 cents. Both, the Midwest and the northeastern U.S. are covered with heat
advisories and excessive heat warnings Friday and more of the same is expected
Saturday. Survivors will see more moderate temperatures Sunday, extending into
next week. The late-planted soybean crop is just starting to bloom and pod
setting is still several weeks away. The U.S. Drought Monitor doesn't recognize
any problem in the Midwest yet, but there are areas where crops need rain and
the forecast for just light to moderate amounts in the central Midwest is of
some concern. It is no secret that U.S. soybean demand remains a large bearish
concern with 434 million bushels (mb) fewer soybean exports anticipated in
2018-19. Officials from the U.S. and China spoke about trade by phone Thursday,
but no significant progress was reported. Until China drops its 25% tariff on
U.S. soybeans, the fundamental outlook for U.S. soybean prices remains bearish.
At the same time, the anticipation of a smaller soybean crop in 2019 is helping
ease the bearish severity and is helping keep prices above their 12-year lows.
Technically, the trend in cash soybeans is up with prices back down from their
highest level in a year. The DTN National Soybean Index closed at $8.12
Thursday, 70 cents below the August futures contract.
September KC wheat closed up 7 1/4 cents at $4.40, getting some help from
Friday's higher corn price and a dose of short-covering. For the week, KC wheat
was down 27 1/4 cents and September Chicago wheat was down 20 1/2 cents as both
managed to hold above support within their sideways trading ranges. In spite of
Friday's higher prices, it is still difficult to find anything bullish to say
on behalf of wheat prices. This week's hot temperatures were not pleasant, but
present no significant problem for the ongoing winter wheat harvest. The U.S.
spring wheat crop has been doing well and is expected to see some stress early
next week from hotter temperatures and a mostly dry forecast for the
northwestern U.S. Other spring wheat regions in Canada and Russia are also
dealing with drier conditions, which should limit production somewhat, but no
serious threats to world production are seen at this time. Fundamentally, as
long as world wheat production remains on track for a new-record high in 2019,
wheat prices will continue to be under a lid of bearish pressure. Technically,
the trends for SRW, HRW and HRS wheat are all sideways and Friday's higher
closes kept prices above support. The DTN National HRW Index closed at $4.11
Thursday, down 22 cents from the September futures contract. The DTN National
SRW Index closed at $4.74 Thursday, near its June low.
Todd Hultman can be reached at firstname.lastname@example.org
Follow him on Twitter @ToddHultman1
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