DTN Closing Grain Comments

General Comments:

Corn was unchanged in the March contract and up 1/4 cent in the December. Soybeans were down 8 3/4 cents in the March contract and down 9 1/4 cents in the November. Wheat closed up 2 cents in the March Chicago contract, up 1 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 0.15 at 92.11. February gold is up $3.90 at $1,317.60 while March silver is down 2 cents and March copper is up $0.0205. The Dow Jones Industrial Average is down 38 points at 25,348. February crude oil is up $0.47 at $63.43. February heating oil is up $0.0117 while February RBOB gasoline is down $0.0051 and February natural gas is down $0.019.

Corn:

March corn ended unchanged on light volume at $3.49 Wednesday, staying within a 2-cent range and showing few signs of life ahead of Friday's USDA reports. Judging by Dow Jones' survey, analysts are only expecting minor changes in Friday's WASDE report, but January reports are known for hiding occasional surprises. The main bearish concern is that with corn shipments down 35% from a year ago, the estimate of U.S. ending stocks and tally of U.S. corn stocks on Dec. 1 appears destined for a bearish conclusion. Another emerging concern for corn is ethanol demand. The U.S. Energy Department said 996,000 barrels of ethanol were produced last week, under the one million mark for the first time in three months while ethanol inventory inched up to 22.7 million barrels. The concern is that overall fuel demand may be slowing with spot gasoline prices trading at their highest levels in over two years. Technically, the trend in March corn remains sideways while prices keep a narrow margin above the December low of $3.46 1/2. DTN's National Corn Index closed at $3.16 Tuesday, priced 33 cents below the March contract and near its highest price in four months. In outside markets, February gold is up $6.00 and February crude oil is up 48 cents at its highest spot price in three years.

Soybeans:

March soybeans fell 8 3/4 cents to a new four-month low of $9.55 Wednesday, extending their downtrend after two weeks of sideways trading. The obvious bearish factor plaguing soybean prices is that Brazil's crops continue to do well with more rain again in this week's forecast. Argentina's conditions have been drier and more questionable, but will also be helped by rain in the northern end this week while the southern half stays drier. If those weren't enough, Bloomberg news reported early Wednesday that Chinese officials are considering either halting or reducing their purchases of U.S. Treasury securities. Chinese officials have yet to speak on the matter, but soybean traders have to wonder if it is a sign of heightened trade tensions with the U.S. Early Wednesday, USDA said 9.6 million bushels (260,000 metric tons) of U.S. soybeans were sold to unknown, 2.4 million bushels (65,000 mt) of which were for 2017-18 and the rest were for 2018-19. Even so, the pace of U.S. soybean exports is down in 2017-18 and is an important part of the reason the downtrend continues for March soybeans. DTN's National Soybean Index closed at $8.93 Tuesday, priced 71 cents below the March contract and up from its lowest price in three months. Among January contracts, delivery intentions totaled 21 for soybeans, 99 for soybean meal, and 140 for soybean oil early Wednesday. January grain futures contracts expire early Friday.

Wheat:

March Chicago wheat closed up 2 cents Wednesday at $4.34 1/4. Trading was quiet in front of Friday's USDA reports while the U.S. Plains enjoy one more day of mild weather before subfreezing temperatures return as far south as central Texas on Thursday. With conditions dry in the western Plains, the colder temperatures could bring some damage, but traders are unfazed as this looks like a milder version of the temperatures seen around the New Year's holiday. The latest seven-day forecast is expecting a combination of snow and ice in the northwestern Plains this week, but precipitation amounts are expected to be light for most of the western Plains, allowing drought tendencies to continue. With Friday's USDA reports possibly set to show a smaller planting of winter wheat this season, but plenty of wheat on hand, the trend in winter wheat futures remains sideways. DTN's National SRW index closed at $4.01 Tuesday, priced 31 cents below the March contract and near its highest price in three months. DTN's National HRW index closed at $3.92, its highest price in nearly five months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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