DTN grains

Wire: DTN (DTN) Date: May 26 2016 8:15:04
DTN Before The Bell Grains 05/26 08:09

DTN Before The Bell Grains 05/26 08:09

Meal Keeps Pushing Higher

July corn was up 3 1/2 cents, July soybeans were up 8 cents, and July
Chicago wheat was up 6 3/4 cents.

By Todd Hultman
DTN Analyst

Morning CME Globex Update:

July corn was up 3 1/2 cents, July soybeans were up 8 cents, and July
Chicago wheat was up 6 3/4 cents. At 8 a.m. CDT, USDA announced that 123,000
metric tons (4.8 mb) of U.S. corn were sold to unknown destinations and 65,000
metric tons (2.6 mb) were sold to Taiwan for 2015-16. Taiwan also bought
another 65,000 tons of U.S. corn for 2016-17. Before the announcements, all
three grains were higher, led once again by commercial buying in soybean meal.

Other Markets:

Dow Jones: Higher
U.S. Dollar Index: Lower
Gold: Higher
Crude Oil: Higher

Corn:

At 8 a.m. CDT, USDA announced that 123,000 metric tons (4.8 mb) of U.S. corn
were sold to unknown destinations and 65,000 metric tons (2.6 mb) were sold to
Taiwan for 2015-16. Taiwan also bought another 65,000 tons of U.S. corn for
2016-17. Before the announcements, July corn was already a few cents higher
with light commercial buying as prices continue to benefit from gains in
soybean meal and dry weather in Brazil. Early Thursday, USDA said that last
week’s export sales and shipments of corn totaled 54.4 and 44.3 million
bushels, neutral-to-bullish amounts for the week that still give corn a chance
to reach USDA’s export estimate of 1.725 billion bushels. Fundamentally, a 14
billion bushel crop is a possible bearish threat this year, but so far demand
for corn is doing well and July corn has a good chance to break out of its
narrow six-month range by the end of this week — a bullish technical event, if
it happened. DTN’s National Corn Index closed at $3.70 Wednesday, priced 35
cents below the July contract and at its highest price in ten months. In
outside markets, July crude oil is trading above $50 for the first time in over
six months.

Soybeans:

July soybeans were higher early Thursday, propelled by commercial buying in
soybean meal once again. At 7:30 a.m. CDT, USDA said that last week’s export
sales and shipments of soybeans totaled 16.8 and 4.4 million bushels
respectively, a neutral weekly amount that keeps total shipments in 2015-16 a
little below USDA’s estimated pace. So far, the train of commercial buying in
soybean meal keeps chugging along, but it does seem crazy and a bit worrisome
that the July contract is trading over $20 above the August. Fundamentally, a 4
billion bushel soybean crop is still possible in the U.S., but prices are
showing no regard for any bearish concerns now. July soybeans remain in an
uptrend with USDA’s Acreage report due out on June 30. DTN’s National Soybean
Index closed at $10.16 Wednesday, priced 69 cents below the July contract and
at its highest price in over a year.

Wheat:

July Chicago wheat was higher early with help from light commercial buying
and this month’s higher corn prices. Early Thursday, USDA said that last week’s
export sales posted a net cancellation of 400,000 bushels while shipments
totaled 10.5 million bushels — another bearish performance for 2015-16.
New-crop sales were modest at 13.0 million bushels, but it will take time to
see if USDA’s higher export estimate for 2016-17 is reasonable. As bearish as
the analysis is for wheat prices, it is impressive that they continue to hold
firmly sideways, thanks to loyal commercial support. Right now, the HRW wheat
crop looks very good in the southwestern Plains, but there is some concern that
this rainy, sometimes stormy pattern will hurt crops in the next few weeks as
harvest get underway. DTN’s National SRW index closed at $4.22 Wednesday,
priced 44 cents below the July contract and staying within its narrow, sideways
range.

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

Follow Todd on Twitter @ToddHultman1

(KA)

Copyright 2016 DTN/The Progressive Farmer. All rights reserved. -0-
May/26/2016 13:15 GMT

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