DTN Closing Grain Comments    05/03 14:05

   Winter Wheat Prices Lead Grains Higher, While Soybean Oil Ends Near New 
3-Year Low

   July Chicago wheat closed up 18 1/4 cents at $6.22 1/2, Friday's largest 
percentage gainer in the grain-related sector with more rain expected on a 
soggy SRW wheat crop next week. November soybeans closed up 13 1/4 cents at a 
new one-month high, but July soybean oil fell to its lowest weekly close in 
over three years.

Todd Hultman
DTN Lead Analyst

GENERAL COMMENTS:

   July corn closed up 1/2 cent and December corn was up 3 1/4 cents. July 
soybeans closed up 16 cents and November soybeans were up 13 1/4 cents. July KC 
wheat closed up 13 3/4 cents, July Chicago wheat was up 18 1/4 cents and July 
Minneapolis wheat was up 5 1/4 cents.

   The U.S. Dollar Index is down 0.26 at 105.04. The Dow Jones Industrial 
Average is up 500.56 points at 38,726.22. June gold is down $2.30 at $2,307.30, 
July silver is down $0.16 at $26.67 and July copper is up $0.0705. June crude 
oil is down $0.80 at $78.15, June ultra-low sulfur diesel is up $0.0027, June 
RBOB gasoline is down $0.0391 and June natural gas is up $0.098.

   For the week:

   July corn closed up 10 1/4 cents and December corn was up 9 1/4 cents. July 
soybeans closed up 37 3/4 cents and November soybeans were up 26 1/4 cents. 
July KC wheat closed down 4 cents, July Chicago wheat was up 1/4 cents and July 
Minneapolis wheat was up 11 cents.

CORN:

   December corn ended up 3 1/4 cents at $4.82 3/4 Friday, the highest close in 
over three months and was up 9 1/4 cents on the week. After several months of 
trading below harvest-time prices with expectations of big crops from South 
America, both the narrative and the direction of corn prices have changed. Corn 
may still encounter significant competition from South American supplies this 
summer, but the expectation of new supplies has lightened, helped by Brazil's 
safrinha corn crop facing hot and dry conditions this month and by wet 
conditions in Argentina that have delayed harvest. Late Thursday, the Buenos 
Aires Grain Exchange lowered its estimate of Argentina's corn production from 
49.5 million metric tons (mmt) to 46.5 mmt or 1.83 billion bushels (bb).

   Also adding to this week's bullish pressures on bearish corn specs, the U.S. 
Corn Belt faces another week of wet weather ahead with heavier amounts across 
the southeastern Corn Belt, including several areas that are already too wet 
and don't want the rain. Some areas will get short breaks and temperatures are 
expected to stay above normal the next seven days, but the forecast remains 
mostly wet for the first half of May.

   On the demand side, corn exports remain active and are a little ahead of 
USDA's estimated pace. Ethanol production slowed lately but remains 4% above 
last season's total for this time of year. DTN's national corn basis is in the 
process of rolling to July and continues to strengthen since harvest.

   Waiting for corn planting to pick up again in the U.S., the trend has turned 
up for December corn after a long stretch of lower prices this winter. DTN's 
National Corn Index was priced at $4.37 Thursday evening, 23 cents below the 
July futures. In related news, the U.S. Labor Department said the unemployment 
rate increased from 3.8% in March to 3.9% in April. The number of people 
employed increased 25,000 to 161.491 million. Dow Jones futures are trading up 
500 points on Friday afternoon.

SOYBEANS:

   November soybeans ended up 13 1/4 cent at $12.01 Friday, the highest close 
in over a month and above the 100-day average for the first time this year. For 
the week, November prices were up 26 1/4 cents. As with corn, this week's 
buying was fueled by a combination of events in South America and the U.S. 
Southern Brazil has been hit by a long string of heavy rains that have 
virtually halted the final 10% of the soybean harvest. See DTN's South America 
Calling blog by DTN Meteorologist John Baranick here: 
https://www.dtnpf.com/agriculture/web/ag/news/article/2024/05/02/flooding-rain-s
outhern-brazil .

   In Argentina, the Buenos Aires Grain Exchange said 36% of soybeans were 
harvested, well below their usual pace and hindered by wet conditions, but not 
as severe as those seen in southern Brazil. Harvesting will have to dodge more 
rain ahead, but should eventually get done. Adding to this week's bullish 
pressures, there are concerns the oilseeds workers union may go back on strike, 
but there was no confirmation of that by Friday's close.

   Here in the U.S., planting was slow this week and looks like it will be 
again next week with moderate to heavy rains expected over nearly all growing 
areas. The Eastern Corn Belt has the most concern with several areas already 
too wet, but there is still time for planting opportunities later this month.

   Earlier Friday, USDA said 4.5 million bushels (mb) of old-crop soybeans were 
sold for export to unknown destinations, offering small help for exports that 
are currently down 18% from last year's seasonal total at this time. Narrowing 
crush premiums were a bearish concern for soybean demand earlier this week, but 
July soybean meal prices got a big lift Thursday and ended up $7.30 Friday. For 
the week, July soybean meal finished up $27.50 at $372.20, its highest close in 
over three months with support from concerns about Argentina's problems and a 
possibility of new buying interest from specs going long. Meanwhile, July 
soybean oil finished at 43.08 cents, its lowest weekly close in over three 
years after finding no reason to celebrate the government's new feedstock 
guidelines for SAF fuels. See Friday's Todd's Take here: 
https://www.dtnpf.com/agriculture/web/ag/news/article/2024/05/03/corn-soybeans-c
hance-saf-market . Here in early May, the trend in November soybeans has turned 
up with a new season in front of us. DTN's National Soybean Index was priced at 
$11.38 Thursday evening, 61 cents below the July futures.

WHEAT:

   July KC Wheat closed up 13 3/4 cents at $6.50 1/4 Friday, but was down 4 
cents on the week. The May contract only had 16 contracts still open early 
Friday and closed up 23 cents at $6.60 Friday, either indicating strong 
commercial demand or a procrastinating spec begging to get out of his last 
short positions. Either way, it was an impressive performance for July KC wheat 
to maintain most of last week's 71 1/4-cent gain.

   Riding on the back of last week's short-covering rally, there are still a 
few weather concerns in wheat. The Western Canadian Prairies have been dry but 
will get more precipitation next week and should turn warmer later in the week. 
Western Europe remains too wet and is expecting more rain this weekend into 
next week. Recent rains in southwestern Russia have been limited and there is a 
threat of colder temperatures coming to the Black Sea region next week. 
September milling wheat in France ended slightly lower on the week but is still 
near its highest prices in four months at 235 euros per metric ton.

   Here in the U.S., western Kansas remains dry, but the rest of the HRW wheat 
crop has had beneficial rains recently with more expected next week. SRW wheat 
crops have high crop ratings from USDA, but many are located in areas that are 
too wet and have more rain expected next week. July Chicago wheat was up a 
quarter-cent on the week, barely posting a new three-month closing high at 
$6.22 1/2. Of the three U.S. wheats, July Minneapolis wheat saw the largest 
gain this week, ending up 11 cents at $7.14 1/2, its highest close in over 
three months. With weather concerns in early May, the trends remain up for the 
July contracts of all three U.S. wheats. DTN's National HRW Index closed at 
$5.86 Thursday, near the lowest prices in over three years. DTN's National HRS 
Index closed at $6.80.

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

   Follow him on social platform X @ToddHultman1




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