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GRAIN MARKETS: Spring wheat highest since January

Corn and soybeans slip as winter wheat has fractional losses.

Spring wheat was the star of Thursday’s trading as it posted its highest close since January and has the July contract almost in overbought territory on technical charts.

Spring wheat’s gains have been attributed to expected demand for high-protein supplies to offset lower-quality winter wheat. Also, the U.S. Department of Agriculture’s first condition report put spring wheat at 62% good/excellent, which was well short of last year’s initial rating of 79%.

Corn and soybeans drifted lower as forecasts lacked harmful conditions for the Midwest this week. Drier weather in some areas should aid replanting of flooded fields and boost newly sown crops.

Winter wheat markets were largely a fraction lower in light trading.

Forecasts show scattered showers and cool weather in the Midwest for the next few days. The latest 6- to 10-day outlook (June 7-11) is dry but cool for most of the Midwest.

Equities bounded higher after a private report showed gains in May job numbers. A government jobs report is due on Friday. The Dow Jones Industrials were up 100 points when the crops closed. Crude oil was a little lower despite a bigger-than-expected decline in weekly stocks. The dollar rose after the jobs report.

Exports (from USDA and Reuters):

- A South Korea feed group bought 66,000 metric tons of corn in a private deal at about $183.50 per ton, c&f, for arrival about Oct. 5. The corn can be sourced from the U.S. or South America.

- Philippines feed makers seek to buy up to 200,000 metric tons of South American soybean meal for October to January shipment. The tender concludes on Wednesday.

- Iraq seeks to buy 50,000 metric tons of wheat from the U.S., Canada or Australia. The tender closes June 4, with offers valid until June 8. From the U.S., Iraq seeks hard red spring, dark northern spring or hard red winter wheat.

- Jordan seeks to buy 100,000 metric tons of optional-origin hard wheat for mid-October to Nov. 30 shipment. The tender closes June 6.

Corn futures closed a little lower in lighter volume to take back a portion of yesterday’s modest gains.

After the crops closed, the government said ethanol plants used 432.8 million bu. of corn in April, down from 460.4 million bu. in March but up from 400.7 million a year ago.

Also on Thursday, a weekly government energy report showed that ethanol production rose by 10,000 barrels a day last week, and stocks increased by 79,000.

The Chicago Board of Trade (CBOT) estimated Thursday’s corn futures volume at 270,611. Wednesday’s actual volume was 441,346. Open interest in Wednesday’s higher market increased by 2,375 with July’s down 15,027 and December’s up 4,214.

July corn closed down 1-1/2 cents at $3.70-1/2, and new-crop December dropped 1-3/4 cents to $3.89-1/4.

What to Look For: Weekly export sales will be released on Friday with most participants in a Reuters poll expecting old- and new-crop sales to top last week’s business.

Soybeans closed a few cents lower as funds were noted selling in the lightly traded session.

Traders awaited the monthly USDA crush report that was released after the close. USDA said 150 million bu. of soybeans were crushed in April, down from 160 million in March and from 158 million a year ago. The April crush was better than the 148 million bu. traders had expected.

CBOT estimated Thursday’s volume at 125,063. Wednesday’s actual volume was 227,021. Wednesday’s open interest in the higher market increased by 199 with July’s down 3,179 and November’s up 1,228.

July soybeans closed down 3-3/4 cents at $9.12-1/4, and August dropped 3 cents to $9.15-1/4. New-crop November was down ½ cent at $9.17-3/4.

What to Look For: USDA’s weekly export sales on Friday should be down for the old crop versus a week ago, while new-crop business could be up.

Winter wheat markets finished slightly lower, while spring wheat added more gains. The spring wheat is now the highest since January.

Winter wheat barely moved despite fund selling. Forecasts for the next few days lacked weather threats for winter wheat areas, which need drier conditions with harvest due to start later in the month in the central Plains.

CBOT estimated Thursday’s soft red winter wheat volume at 112,807. Wednesday’s actual volume was 110,678. Open interest in Wednesday’s flat market increased by 766 with July’s down 4,955 and September’s up 4,318..

Chicago, Ill., July soft red winter wheat closed down ¼ cent at $4.29, and September was down ¼ cent at $4.43-1/2. Kansas City, Mo., July hard red winter wheat dropped 1 cent to $4.30-3/4, and September slipped 3/4 cent to $4.49-1/4. Spring wheat for July jumped 6-1/4 cents to $5.78-3/4, and September rose 6 cents to $5.82-1/2.

What to Look For: The bulk of Friday’s weekly export sales should be new crop, with traders expecting numbers on either side of last week’s 12.6 million bu.

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