DTN grains

Wire: DTN (DTN) Date: May 27 2016 8:13:03
DTN Before The Bell Grains 05/27 08:11

DTN Before The Bell Grains 05/27 08:11

China Buys Corn and Soybeans

July corn was down 1/2 cent, July soybeans were down 1/4 cent, and July
Chicago wheat was down 1/2 cents.

By Todd Hultman
DTN Analyst

Morning CME Globex Update:

July corn was down 1/2 cent, July soybeans were down 1/4 cent, and July
Chicago wheat was down 1/2 cents. At 8 a.m., USDA announced that China bought
130,000 metric tons (5.1 mb) of U.S. corn for 2015-16 and 110,000 metric tons
(4.0 mb) of U.S. soybeans for 2016-17. 100,000 metric tons of soybean meal were
also sold to unknown destinations for 2016-17. Before the announcements, all
three grains were slightly lower, showing caution ahead of Memorial Day weekend
with more severe weather expected later Friday.

Other Markets:

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

Corn:

At 8 a.m., USDA announced that China bought 130,000 metric tons (5.1 mb) of
U.S. corn for 2015-16. Before the announcement, July corn was a half-cent
lower, acting cautious after posting its highest close in seven months Thursday
with a three-day weekend ahead. Rain continues to create flooding problems in
eastern Texas with more severe weather threats in the southern Plains on
Friday. Moderate rain amounts are expected in the central Midwest through the
weekend, but only lighter amounts for Indiana and Ohio. The 2016 corn crop is
off to a bumpy start and this spring’s wet weather will likely push some acres
to soybeans where possible, but a 13.8 to 14.0 billion bushel corn crop still
seems reasonable, weather permitting. July corn continues to challenge the
upper end of its sideways range, thanks to active demand and help from higher
soymeal prices. DTN’s National Corn Index closed at $3.73 Thursday, priced 35
cents below the July contract and at its highest price in ten months. In
outside markets, the U.S. dollar index is up .24 after the Commerce Department
said that U.S. GDP was up 2.0% in the first quarter from a year ago, more than
previously estimated.

Soybeans:

At 8 a.m., USDA announced that China bought 110,000 metric tons (4.0 mb) of
U.S. soybeans for 2016-17 and 100,000 metric tons of soybean meal were sold to
unknown destinations for 2016-17. July soybeans were a quarter-cent lower,
encountering early commercial selling in soybean meal. Thursday’s high in July
meal hit its highest price in 20 months and for a short time traded over $20
above the August contract. It is fair to wonder if prices are nearing at least
a short-term peak with the three-day weekend in front of us, but there is no
question that this year’s meal demand remains a strong bullish influence for
soybeans. Apart from meal, this year’s wet spring is conducive for a soybean
crop near 4 billion bushels, so a wide range of scenarios are still possible,
from moderately bearish to wildly bullish depending on how the summer goes. For
now, July soybeans remain in an uptrend near its highest prices since August
2014. DTN’s National Soybean Index closed at $10.11 Thursday, priced 69 cents
below the July contract and down from its highest price in over a year.

Wheat:

July Chicago wheat was down a half-cent Friday, a quiet start that gives
wheat a chance to protect this week’s gain as we head toward Memorial Day.
Friday’s weather map shows more rain in eastern Texas and Oklahoma with chances
for more severe weather in Kansas later in the day. This has been a turbulent
time for the HRW wheat region and while it seems likely that a big winter wheat
crop will still be harvested, more unwelcome rain amounts are expected early
next week, adding doubts to the approaching harvest. Outside the U.S., major
wheat areas are said to be doing well which keeps wheat fundamental outlook as
bearish as ever. Technically, Chicago wheat prices have compressed into a
narrow sideways range and are simply lacking a reason to break out higher.
DTN’s National SRW index closed at $4.37 Thursday, priced 45 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/27/2016 13:13 GMT

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