Grains

Grains this morning are mixed with July corn +0.25 (+0.07%), July beans +4.75 (+0.54%), and July wheat -1.00 (-0.20%). Grain prices on Thursday closed higher: Jul corn +2.75 (+0.78%), Jul soybeans +7.00 (+1.43%), Jul wheat +10.50 (+2.20%). Bullish factors included (1) a weaker dollar, and (2) short-covering following recent sharp losses. Bearish factors included (1) concern Chinese demand for U.S. grains will dry up after China pledged to retaliate "forcefully' against U.S. threats for tariffs on another $200 billion of Chinese imports, and (2) ideal growing conditions in the Midwest that should boost early development of the just planted U.S. corn and soybean crops. The escalation of U.S.-China trade tensions hammered grain prices on Tuesday as Jul corn fell to a 6-1/4 month nearest-futures low, Jul soybeans dropped to a 9-1/2 year nearest-futures low and Jul wheat slid to a 1-3/4 month low. A bearish factor for wheat is increased wheat exports from Russia that may curb foreign demand for more-expensive U.S. wheat supplies with Russian wheat exports in the 2017/18 season that ends in June are up 49% y/y to 39.4 MMT as of Jun 20. China's National Grain and Oils Information Center recently projected China 2018 soybean imports may decline by -1 MMT to 95 MMT, the first decline in 15 years.

Monday's USDA Crop Progress report showed 78% of the U.S. corn crop in good-to-excellent condition as of Jun 17, up +1 point w/w and +11 points ahead of last year. The Crop Progress report also showed 73% of the U.S. soybean crop was in good-to-excellent condition as of Jun 17, down -1 point w/w but +6 points ahead of last year at the same time. 39% of the U.S winter wheat was in good/excellent condition as of Jun 17, up +1 point w/w but down -10 points from 49% last year. The NWS reported that the wheat-growing region from Texas to southwest Kansas had the driest Dec-Feb on record.