DTN grains

Wire: DTN (DTN) Date: May 31 2016 7:52:03
DTN Before The Bell Grains 05/31 07:51

DTN Before The Bell Grains 05/31 07:51

Soybeans’ Higher Trend Still Uninterrupted

Corn 1 3/4 lower. Soybeans 3 3/4 higher. Wheat 4 1/4 lower. Row crops’
higher trends remain in place uninterrupted by the holiday weekend.

By Elaine Kub
DTN Contributing Analyst

Morning CME Globex Update:

Corn 1 3/4 lower. Soybeans 3 3/4 higher. Wheat 4 1/4 lower. Row crops’
higher trends remain in place uninterrupted by the holiday weekend. Grain and
oilseed futures have started Tuesday with quiet, unsurprising movements, yet
this could be a short but volatile week of outside market influence or sudden
reckoning with underlying supply security.

Other Markets:

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

Corn:

After Monday’s Memorial Day holiday, during which both crude oil and the
U.S. Dollar Index moved higher in relatively light international trade, grain
markets spent the overnight session mostly higher. Corn contracts across the
calendar are mixed, but all firmly above $4 per bushel and displaying bullish
indications from very tight carry spreads (less than 2 cents) through the end
of 2016. Futures traders are busy re-adjusting their ending stocks projections
after last week’s sale to China of American corn rather than South American or
Ukrainian corn. They should also be watchful for day-to-day volatility spilling
over from the oil market as it navigates the $50-per-barrel level in a week
when OPEC is meeting in Vienna. The DTN National Corn Index, an average of cash
bids around the country, was $3.77 Friday. The national average basis level
remained steady at 35 cents under the July futures contract.

Soybeans:

The weekly Crop Progress report to be released Tuesday afternoon is likely
to show soybeans are above 70 percent planted (and corn about 95 percent
planted), but it’s hard to argue that the soybean market’s upward trend is
being led by planting weather or by the new crop story at all. Still, the 6 to
10-day forecast for drier weather in Ohio and Indiana will help the Eastern
Corn Belt catch up to their normal planting pace. Overnight, the continuous
front-month soybean chart traded within 2 cents of last week’s $10.98 high, so
it isn’t yet signaling an intention to pull back like soybean meal has done
amid nervous speculative profit-taking. Argentina’s soybean harvest has been
behind pace and recently delayed by showers, but the forecast turns drier and
the country’s harvesters will likely be on their last lap (10 percent or so)
this week. The DTN National Soybean Index was $10.18 Friday afternoon, showing
the U.S. average basis level remained steady at 68 cents under the July futures
contract.

Wheat:

Both the U.S. winter wheat crop and the North American spring wheat crop
continue to display excellent yield potential, with last week’s Crop Progress
report showing 92 percent of winter wheat and 98 percent of spring wheat rated
above poor, and this week’s report likely to say something similar. Any hail
damage from Monday’s line of storms across the Northern Plains isn’t likely to
be a widespread market mover. However, in Texas and Oklahoma, the precipitation
in the 6 to 10-day forecast may hinder some intentions to get started on
harvest. The DTN National Soft Red Wheat Index closed at $4.39 Friday, showing
that average basis bids strengthened to 43 cents under the July Chicago
contract. For the hard wheat varieties, Friday’s HRW Index value was $3.91 and
the Spring Wheat Index closed at $4.73 — a stronger basis bid of 55 cents
under the July Minneapolis contract.

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

Follow Elaine on Twitter @elainekub

(KA)

Copyright 2016 DTN/The Progressive Farmer. All rights reserved. -0-
May/31/2016 12:52 GMT

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Copyright (c) 2016

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