DTN Closing Grain Comments

K.C. Wheat Adds a Dime, Leads Grains Higher

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

General Comments:

Corn was up 2 1/4 cents in the March contract and up 2 cents in the December. Soybeans were up 6 cents in the March contract and up 5 1/4 cents in the November. Wheat closed up 8 1/4 cents in the March Chicago contract, up 10 cents in the March Kansas City, and down 3/4 cent in the March Minneapolis contract.

The March U.S. dollar index is up 0.26 at 89.15. February gold is down $10.00 at $1,342.10 while March silver is down 25 cents and March copper is down $0.0020. The Dow Jones Industrial Average is down 100 points at 26,517. March crude oil is down $0.54 at $65.60. March heating oil is down $0.0296 while March RBOB gasoline is down $0.0110 and March natural gas is down $0.011.

Corn:

March corn ended up 2 1/4 cents Monday at $3.58 3/4, influenced by this week's forecast for hot and dry weather in Argentina. USDA's news that 4.5 million bushels (mb) (115,000 metric tons) of U.S. corn were sold to Egypt for 2017-18 also helped to support Monday's prices, but the export pace remains sluggish. USDA said 39.1 mb of corn were inspected for export last week, more than the previous week, but contributing to a total that is down 34% in 2017-18 from a year ago. Friday's CFTC data showed noncommercials a little less bearish in corn with 77,025 net shorts as of Jan. 23. Commercials reduced net longs from 70,407 to 58,168 but still remain the primary source of support for March corn prices. The fundamental outlook remains bearish with plenty of U.S. corn supplies available, but March corn futures are finally starting to lift away from their lows as active domestic demand helps cash corn prices keep inching higher. DTN's National Corn Index closed at $3.25 Friday, priced 31 cents below the March contract and near its highest price in five months. In outside markets, the March U.S. dollar index is trading up 0.26, ahead of a two-day Federal Reserve meeting that is expected to keep rates unchanged until March.

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Soybeans:

March soybeans closed up 6 cents at $9.91 1/2, helped by another hot and dry seven-day forecast for Argentina. Crops in parts of eastern Argentina received beneficial showers over the weekend, but wider coverage is needed as soybean pods get ready to fill. Heavy rains are expected in central Brazil this week which may interrupt harvest activity. Friday's CFTC data showed noncommercials still on the bearish side of soybeans with 67,090 net shorts as of Jan. 23. Commercials trimmed back net longs from 111,976 to 105,646, but remain supportive, even after soybean prices climbed higher since Jan. 12. Fundamentally, Brazil's upcoming soybean crop, estimated just over 4.0 billion bushels (bb) remains a bearish concern for prices, but overall, market clues remain mixed. Technically, the trend in March soybeans has turned higher with support from commercial buying in the mid-$9s and ongoing uncertainty about Argentina. DTN's National Soybean Index closed at $9.17 Friday, near its highest in a month and priced 68 cents below the March contract.

Wheat:

March Chicago wheat closed up 8 1/4 cents Monday at $4.49 1/4 and March K.C. wheat was up a dime at $4.53 -- both helped by another dry looking seven-day forecast for the southwestern U.S. Plains. Friday's CFTC data showed noncommercials still heavily bearish in Chicago wheat with 95,971 net shorts as of Jan. 23. Commercials slightly increased net longs to 97,584. The combination of rising wheat prices and heavy noncommercial short positions is bullish short-term as traders are likely feeling pressure to liquidate their short commitments. Longer term, however, there is plenty of winter wheat available, which is apt to keep a lid on any noticeable rally. Thanks to dry weather and too many shorts, March Chicago wheat is challenging resistance from its November high of $4.50. DTN's National SRW index closed at $4.11 Friday, priced 30 cents below the March contract and at its highest price in four months. DTN's National HRW index closed at $4.03, at its highest price in five months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman