DTN Closing Grain Comments

Corn Wakes Up, Finishes Higher

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was up 4 3/4 cents in the March contract and up 3 1/2 cents in the December. Soybeans were up 3/4 cent in the March contract and down 1/4 cent in the November. Wheat closed up 5 cents in the March Chicago contract, up 5 cents in the March Kansas City, and up 1/4 cent in the March Minneapolis contract. The March U.S. dollar index is down 0.03 at 90.12. February gold is up $1.50 at $1,338.60 while March silver is down 2 cents and March copper is down $0.0250. The Dow Jones Industrial Average is up 219 points at 26,038. February crude oil is up $0.25 at $63.98. February heating oil is up $0.0090 while February RBOB gasoline is up $0.0209 and February natural gas is up $0.107.

Corn:

March corn closed up 4 3/4 cents at $3.53 Wednesday, the biggest daily gain since November 17 and helped by a noticeable lack of sellers to offset commercial buying. In spite of Friday's new contract low after USDA raised its estimate of the 2017 U.S. corn crop to 14.6 billion bushels, commercials had been net long since September and cash corn prices had been steadily rising since mid-November. It appears corn futures are finally catching on to those mild hints of support that we had been seeing, but were slow to develop without any obvious bullish arguments to help. Meanwhile, this week's forecast is drier for central Brazil with chances for beneficial showers in southern Brazil and Argentina -- a favorable combination for row crops. So far, the technical trend in March corn remains down, but a close above $3.55, if it happened, would turn the trend higher. DTN's National Corn Index closed at $3.16 Tuesday, priced 32 cents below the March contract and near its highest price in five months. In outside markets, the March U.S. dollar index is down 0.03 after the Federal Reserve's Beige book said, "11 Districts (were) reporting modest to moderate gains and Dallas (was) recording a robust increase."

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Soybeans:

March soybeans closed up 3/4 cent at $9.68 3/4 Wednesday, hanging on to a roughly 18-cent gain since Friday's USDA numbers showed a slightly smaller soybean crop of 4.39 billion bushels in 2017. The recent move higher is a bit surprising, given Argentina's rain over the weekend and mostly favorable forecast for South America this week. However, the upswing has also been accompanied by a rebound in March soybean meal prices and an impressive increase in commercial net longs. March meal was up $1.50 to another new one-month high. In addition to expecting a sixth consecutive large soybean harvest out of Brazil in early 2018, the pace of U.S. soybean exports has been bearishly low, down 14% from a year ago. Wednesday's news that 4.8 million bushels (130,000 mt) of U.S. soybeans were sold to unknown destinations for 2018-19 didn't do much to change the bearish path. Fundamentally, the outlook for soybeans is bearish and technically the trend is still down, but the recent increase in commercial interest and rebound in meal prices are two curious votes of bullish dissent. DTN's National Soybean Index closed at $9.00 Tuesday, near its highest in a month and priced 69 cents below the March contract.

Wheat:

March Chicago wheat closed up a nickel at $4.21 1/2, mimicking corn and getting help from commercial buying on light volume. Much of the U.S. Southern Plains started the day with single-digit temperatures that gave way to warmer readings from the west as the day progressed. The rest of this week will be warmer, but dry conditions remain an ongoing concern with little precipitation expected in the western Plains the next seven days. Fundamentally speaking, the outlook remains bearish with plenty of winter wheat available in the U.S. and around the world. Technically, the trend remains sideways through winter with commercials lending support when spot futures prices near the low $4s. DTN's National SRW index closed at $3.86 Tuesday, priced 31 cents below the March contract and down from its highest price in three months. DTN's National HRW index closed at $3.77, down from its highest price in five months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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Todd Hultman