DTN Closing Grain Comments

General Comments:

Corn was down 4 cents in the March contract and down 3 1/2 cents in the December. Soybeans were down 4 cents in the March contract and down 1 1/2 cents in the November. Wheat closed down 3 cents in the March Chicago contract, down 4 1/4 cents in the March Kansas City and down 1 1/4 cents in the March Minneapolis contract.

The March U.S. dollar index is up 0.45 at 92.12. February gold is down $2.80 at $1,319.50 while March silver is down 16 cents and March copper is down $0.0020. The Dow Jones Industrial Average is up 4 points at 25,300. February crude oil is up $0.20 at $61.64. February heating oil is down $0.0144 while February RBOB gasoline is up $0.0022 and February natural gas is up $0.033.

Corn:

March corn fell 4 cents Monday to $3.47 1/4 and is close enough to challenge its 2017 low at $3.46 1/2. There was no new specific bearish news to pressure prices, but it is possible that farmer selling is taking advantage of a few warm days in January to move grain. Or there are the old bearish reasons that we are already familiar with: plentiful corn supplies, slow exports and two USDA reports due out Friday that will likely reinforce a bearish view for corn prices. USDA did report Monday that 3.75 million bushels (mb) (102,100 metric tons) of U.S. corn were sold to Mexico for 2017-18, but much more is needed to move supplies. USDA said last week's export inspections totaled 33.4 mb, putting total inspections down 36% in 2017-18 from a year ago. As far as market participants go, Friday's CFTC data showed noncommercial traders still bearish in corn with 69,731 net shorts as of Jan. 2. Commercials reduced net longs from 57,446 to 51,199 but remain corn's primary source of support at these low prices. For now, the trend in March corn futures is sideways while cash corn prices have shown several weeks of steady improvement. DTN's National Corn Index closed at $3.17 Friday, priced 34 cents below the March contract and near its highest price in four months. In outside markets, the March U.S. dollar index is up 0.45 with many expecting more interest rate increases in 2018 and adding to grains' bearish woes.

Soybeans:

March soybeans ended down 4 cents Monday at $9.66 3/4 with light bearish influence also coming from both soybean meal and soybean oil. Early Monday, USDA kicked things off with slightly bullish news that 4.4 mb (120,000 mt) of U.S. soybeans were sold to Egypt and another 4.85 mb (132,000 mt) of U.S. soybeans were sold to unknown, both for 2017-18. March prices briefly traded higher after the 8:30 a.m. CST open, but then slid lower soon after. Monday's report of export inspections offered no help to prices with total inspections now down 14% in 2017-18 from a year ago. South American weather continues to repeat the same pattern of maintaining favorable conditions in central Brazil while this week's forecast for southern Brazil and Argentina is drier, with hot temperatures expected (see Monday's DTN article, "Hot In Argentina," by DTN Ag Meteorologist Bryce Anderson). Friday's CFTC data showed noncommercial traders turned more bearish, increasing net shorts in soybeans from 23,331 to 44,754 as of Jan. 2. Commercials added to net longs for a third week and are now holding 77,954, the most since July. So far, the trend in March soybeans remains down in spite of ongoing weather concerns for Argentina and a significant showing among commercials for the long side of soybeans. DTN's National Soybean Index closed at $8.99 Friday, priced 72 cents below the March contract and up from its lowest price in over two months. Among January contracts, delivery intentions totaled 21 for soybeans and 226 for soybean meal early Monday.

Wheat:

March Chicago wheat closed down 3 cents at $4.27 3/4 Monday, encountering moderate commercial selling while the Southern Plains enjoy several days of warmer weather before subfreezing temperatures return on Thursday. Monday's selling may also be related to chances for moderate precipitation this week in Nebraska and western Kansas, but overall, the outlook for the western Plains remains mostly dry. Monday morning, USDA said 8.6 mb of wheat were inspected for export last week, a neutral amount that is not doing much to move wheat's abundant U.S. supplies. On Friday, USDA will release its next round of monthly supply and demand estimates and tell us how much U.S. wheat was on hand Dec. 1. Those two reports are likely to be bearish, but USDA's estimate of winter wheat plantings is likely to be low enough to offer prices some support. Friday's CFTC data showed not much change from the previous week. Noncommercials were a little less bearish in Chicago wheat with 83,238 net shorts as of Jan. 2. Commercials reduced net longs to 84,887 but remain the main source of support for prices. The trend in winter wheat remains sideways for now with little happening to disrupt the trend. DTN's National SRW index closed at $3.99 Friday, priced 32 cents below the March contract and near its highest price in over two months. DTN's National HRW index closed at $3.88, near its highest price in over four months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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