DTN Closing Grain Comments

K.C. Wheat Goes Higher for Fifth Day

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

General Comments:

Corn was up 2 3/4 cents in the March contract and up 2 cents in the December. Soybeans were up 8 3/4 cents in the March contract and up 5 1/2 cents in the November. Wheat closed up 8 cents in the March Chicago contract, up 16 3/4 cents in the March Kansas City and up 2 1/4 cents in the March Minneapolis contract.

The March U.S. dollar index is down 0.05 at 89.08. April gold is down $4.20 at $1,340.90 while March silver is down 3 cents and March copper is up $0.0005. The Dow Jones Industrial Average is down 340 points at 26,099. March crude oil is down $1.21 at $64.35. March heating oil is down $0.0293 while March RBOB gasoline is down $0.0445 and March natural gas is up $0.055.

Corn:

March corn closed up 2 3/4 cents at $3.61 1/2 Tuesday, the highest finish in over two months with help from this week's dry forecast for Argentina and bullish influence from both soybeans and wheat. Dow Jones reported South Africa's corn plantings will be down 12% in 2018 due to drought, and corn prices also received slight help from USDA's news that 5.2 million bushels (mb) (132,000 metric tons) of U.S. corn were sold to Spain for 2017-18. Granted, March corn is climbing out of a deep hole, but it seems clear that the seasonal uptrend is underway, especially among cash corn prices, which have been working higher since mid-November. Dry weather concerns in Argentina are certainly helpful and are giving bearish traders their first challenge in several months. Fundamentally, there is still plenty of corn available, and farmers may be enticed to sell at some point, but for now, the trend in March corn is up. DTN's National Corn Index closed at $3.27 Monday, priced 32 cents below the March contract and at its highest price in five months. In outside markets, the March U.S. dollar index is down 0.05 and Dow Jones futures are down 340 points after the Federal Reserve concluded the first half of its two-day meeting.

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Soybeans:

March soybeans closed up 8 3/4 cents at $10.00 1/4, back above $10 for the first time in over a month, thanks to this week's forecast for more dry weather in Argentina and heavy rain in central Brazil. Argentina's soybeans are nearing pod-filling time and temperatures are expected in the low to mid-90s with no significant precipitation the next seven days. Brazil, on the other hand, is getting ready to harvest a 4.0 billion bushel soybean crop and doesn't need the interruption of heavy showers in this week's forecast. Fundamentally, the outlook for soybean prices still leans bearish while traders sort out these late-season weather threats. The short-term trend for March soybean prices is up, but from a wider lens, prices have continued to chop sideways since last summer and that makes for a confusing picture for soybean prices. DTN's National Soybean Index closed at $9.23 Monday, near its highest in a month and priced 68 cents below the March contract.

Wheat:

March Chicago wheat ended up 8 cents, but once again the larger gain showed up in March K.C. wheat where prices jumped up 16 3/4 cents to $4.69 3/4, their highest close in four months. The five-day buying streak in K.C. wheat has been spurred by dry weather in the southwestern U.S. Plains and no relief is expected in this week's forecast as red flag warnings have been issued for the area around the Texas Panhandle. Some NASS state offices provided crop assessments late Monday and two of the worst were Oklahoma where 79% of winter wheat crops were rated either poor or very poor and Kansas, at 44% poor-to-very-poor. It is a fair point to not take these crop ratings too seriously at the end of January as wheat is resilient, and there is still plenty of time for rain to show up. For now however, the trend in winter wheat is up with evidence of commercial buying Tuesday while the short side of the market is under pressure to liquidate. DTN's National SRW index closed at $4.19 Monday, priced 30 cents below the March contract and at its highest price in five months. DTN's National HRW index closed at $4.13, at its highest price in six months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman