DTN Closing Grain Comments

General Comments:

Corn was unchanged in the March contract and down 1/4 cent in the December.

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

The March U.S. dollar index is up 0.01 at 89.00. April gold is up $2.80 at $1,342.80 while March silver is up 20 cents and March copper is up $0.0120. The Dow Jones Industrial Average is up 143 points at 26,220. March crude oil is down $0.01 at $64.49. March heating oil is down $0.0037 while March RBOB gasoline is up $0.0187 and March natural gas is down $0.216.

Corn:

March corn finished unchanged on low volume Wednesday, keeping a low profile while soybean and wheat prices took bigger hits. Wednesday's satellite map showed rain in northwestern Argentina and the seven-day forecast has a chance for rain in Argentina's central crop areas on Sunday and Monday but expected amounts are light, so far. Here in the U.S., much of the Western Corn Belt is dry as we close out January and the seven-day forecast is only offering light precipitation. Wednesday morning, the U.S. Energy Department said last week's ethanol production slipped from 1.062 million barrels to 1.040 million barrels per day, still high enough to help support corn prices. Ethanol inventory fell from 23.8 million barrels to 23.0 million barrels, a good sign of active demand. March corn has come up roughly a dime from its January low, helped by domestic demand and rising cash corn prices. This season's export pace remains slow, but USDA did say 5.7 million bushels (145,000 metric tons) of U.S. corn were sold to unknown destinations for 2017-18. Corn prices continue to face an uphill battle against plentiful supplies, but for now, the trend in March corn is up, in line with its seasonal tendency. DTN's National Corn Index closed at $3.30 Tuesday, 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 up 0.01 after the Federal Reserve kept the federal funds target unchanged, at 1 1/4% to 1 1/2%, as expected.

Soybeans:

March soybeans closed down 4 1/2 cents at $9.95 3/4 Wednesday, pressured by mention of rain in Argentina just one day after closing above $10 for the first time in over a month. Wednesday's satellite map showed rain in northwestern Argentina, but central crop areas were mostly dry. This week's forecast expects heavy rain in central Brazil while southern Brazil and Argentina are mostly dry, except for a chance of light showers in central Argentina on Sunday and Monday. The heavy rains in central Brazil are disruptive to harvest progress, and this weekend's showers in Argentina will be closely monitored, coming at an important time for pod-filling soybeans. Wednesday's lower close threatens the short-term uptrend that March soybeans have been in, but a wider perspective shows prices chopping sideways. DTN's National Soybean Index closed at $9.32 Tuesday, its highest in over a month and priced 69 cents below the March contract.

Wheat:

March Chicago wheat finished down 5 1/2 cents and March Kansas City wheat was down 2 1/2 cents, both taking a break after posting five consecutive days higher. The seven-day forecast for the southwestern U.S. Plains remains mostly dry and Thursday's U.S. Drought Monitor is likely to show another week of drier conditions. Temperatures are also yo-yoing back up with part of northern Texas expected to hit above 80 degrees on Wednesday. While weather conditions remain bullish, it is reasonable to wonder just how much of a rally we can expect out of K.C. wheat at the end of January. So far, March K.C. wheat is up over 40 cents over the past six session and that should have encouraged a fair amount of short-covering by now. Technically, the trends remain up in winter wheat, but fundamentally, wheat supplies are plentiful and we are still several months away from the next winter crop. DTN's National SRW index closed at $4.27 Tuesday, priced 30 cents below the March contract and at its highest price in five months. DTN's National HRW index closed at $4.29, 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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