DTN Closing Grain Comments

General Comments:

Corn was up 2 1/2 cents in the March contract and up 2 1/2 cents in the July. Soybeans were up 3 cents in the March contract and up 2 3/4 cents in the July. Wheat closed up 6 1/2 cents in the March Chicago contract, up 7 1/2 cents in the March Kansas City, and up 3 1/4 cents in the March Minneapolis contract. The March U.S. dollar index is down 0.20 at 91.62. February gold is up $7.30 at $1,316.60 while March silver is up 8 cents and March copper is down $0.0220. The Dow Jones Industrial Average is up 57 at 24,776. February crude oil is down $0.07 at $60.35. February heating oil is down $0.0094 while February RBOB gasoline is down $0.0325 and February natural gas is up $0.102.

Corn:

March corn closed up 2 1/2 cents at $3.53 1/4 Tuesday, starting the year on a positive note with help from light commercial buying and steadily increasing cash corn prices. Concerns about dry conditions in Argentina are also not going away with hot temperatures expected in this week's forecast. Otherwise, U.S. corn supplies are still plentiful and export activity is slow. Tuesday morning, USDA said 26.9 million bushels of corn were inspected for exports last week, adding to a total that is down 36% in 2017-18 from a year ago. Brazil's FOB corn prices jumped higher in December and are now 25 cents higher than prices at the U.S. Gulf, but we have yet to see any evidence of increased business here in the U.S. Friday's CFTC data showed noncommercials less bearish in corn, reducing net shorts from 92,972 to 74,657 as of Dec. 26. Commercials took advantage of corn's slightly higher price and reduced net longs to 57,446. March corn prices have been holding steady since mid-November, thanks to commercial support, but the overall trend remains down with no significant bullish argument in view. DTN's National Corn Index closed at $3.15 Friday, priced 35 cents below the March contract and near its highest price in four months. In outside markets, the March U.S. dollar index is down 0.20 after manufacturing indices showed expanding activity in Europe and China, reported RTTNews.com. February crude oil is not showing much reaction to reports of anti-government protests in Iran, trading down 7 cents.

Soybeans:

March soybeans finished 3 cents higher Tuesday at $9.64 3/4, catching a wave of light commercial buying at the end of the session. South American weather remains the primary topic of interest. Brazil had more rain over the weekend while Argentina received lighter amounts. This week's forecast keeps the same familiar pattern of expecting more rain across Brazil while light rain amounts and hot temperatures are expected in Argentina. While the situation in Argentina could eventually offer soybean prices some help, noncommercial traders gave up on the long side of soybeans in December. Friday's CFTC data showed noncommercials turned slightly bearish in soybeans with 23,331 net shorts as of Dec. 26. Commercials on the other hand, continue to find soybeans' lower prices attractive and increased net longs from 29,127 to 59,953. Commercial interest in the long side of soybeans suggests good demand, it is difficult to find any bullish hope in the weekly numbers as Monday's inspections report from USDA pegged total inspections down 14% in 2017-18 from a year ago. For now, the trend in March soybeans remains down. DTN's National Soybean Index closed at $8.86 Friday, priced 76 cents below the March contract and up from its lowest price in over two months. Among January contracts, delivery intentions totaled 21 for soybeans, 300 for soybean meal, and 34 for soybean oil.

Wheat:

March Chicago wheat closed up 6 1/2 cents at $4.33 1/2, helped by commercial buying after a weekend of bitter cold temperatures invaded the U.S., reaching deep into winter wheat country. Likewise, March K.C. wheat was up 7 1/2 cents. Tuesday's boost put March Chicago wheat within a dime of its December high, an unexpected rebound after posting a new low on Dec. 12. Cold weather in December is not exactly a surprise, but temperatures dropped colder than the southwestern U.S. Plains normally gets and also caught crops vulnerable in dry conditions that are expecting no moisture relief again this week. None of the factors above present a strong bullish argument for wheat prices, but they are threatening enough to inspire some noncommercial short-covering. Friday's CFTC data showed noncommercials still heavily bearish in Chicago wheat with 94,767 net shorts as of the day after Christmas. Commercials remain loyal to the long side, holding 96,335 contracts net long. Earlier Tuesday, USDA said 10.1 million bushels of wheat were inspected for export last week, a bearish amount that has total inspections down 6% in 2017-18 from a year ago. DTN's National SRW index closed at $3.95 Friday, priced 32 cents below the March contract and near its highest price in three months. DTN's National HRW index closed at $3.76, its highest price in three months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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