DTN Closing Grain Comments

Soybeans, Grains Fire Back

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 4 cents in the December. Soybeans were up 16 1/2 cents in the March contract and up 14 cents in the November. Wheat closed up 6 cents in the March Chicago contract, up 7 1/4 cents in the March Kansas City and up 6 1/2 cents in the March Minneapolis contract.

The March U.S. dollar index is up 0.02 at 89.42. April gold is down $5.10 at $1,331.50 while March silver is down 9 cents and March copper is down $0.0280. The Dow Jones Industrial Average is down 46 points at 24,300. March crude oil is down $0.66 at $63.49. March heating oil is down $0.0325 while March RBOB gasoline is down $0.0409 and March natural gas is down $0.003.

Corn:

March corn closed up 4 3/4 cents Tuesday at $3.63 1/2, back near its three-month high and quickly erasing Monday's stock market-related selling. At 8 a.m. CST, USDA said 4.7 million bushels (mb) (120,000 metric tons) of U.S. corn were sold to Japan and another 4.1 mb (105,000 mt) were sold to unknown destinations, both for 2017-18. It was the seventh corn sale announcement from USDA in the past eight trading sessions, a likely sign that Brazil's corn exports are finally running down. Corn prices may have also been helped by Tuesday's news from USDA that U.S. ethanol exports were up 60% in December from a year ago, helped by the top three destinations of Brazil, Canada, and China. Exports of distillers grains were also up 15% in December from a year ago. Thanks to the current stretch of hot and dry weather, USDA is likely to reduce its estimate of Argentina's corn crop on Thursday. USDA may also reduce its estimate of Brazil's corn crop after USDA's attache for Brazil reduced its crop estimate from 95.0 million metric tons (mmt) to 92.0 mmt (3.62 billion bushels) late Monday. For now, the trend in March corn continues to work higher, in line with its seasonal tendency. DTN's National Corn Index closed at $3.28 Monday, priced 31 cents below the March contract and down from its highest price in five months. In outside markets, the stock market's two-day selling panic eased as the Dow Jones Industrial Average is trading down 46 points early Tuesday afternoon.

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Soybeans:

March soybeans rebounded 16 1/2 cents higher to $9.86 1/4 Tuesday as traders forgot about the stock market long enough to notice that Argentina's crop conditions are not getting any better. Tuesday's satellite map showed another dry day for crops in Argentina while temperatures were either close to or at triple digits in row-crop areas. A chance for light showers is in the back end of the five-day forecast but does not sound very promising for crops at this point. Along with Tuesday's higher soybean prices, March meal was up $4.7 and March bean oil was up 0.66, helped by commercial buying in both. USDA said U.S. exports of biodiesel were down sharply in December from a year ago but still managed a 6% gain for all of 2017. The anticipation of Brazil's big soybean harvest remains a bearish concern, but so far, the trend in March soybeans remains broadly sideways. DTN's National Soybean Index closed at $9.01 Monday, back in its sideways range and priced 69 cents below the March contract.

Wheat:

March Chicago wheat closed up 6 cents and March Kansas City wheat was up 7 1/4 cents to $4.69 with concerns of dry weather hanging on in the western U.S. Plains. A combination of snow, ice, and/or rain are expected to cross the central and eastern Midwest Wednesday and bring heavy rains to the Delta, but the seven-day forecast remains mostly dry for HRW wheat in the western Plains. Yes, Feb. 6 is too early to reach important conclusions about winter wheat, but so far, the threat of dry weather has been bullish enough to keep bearish noncommercial traders on their heels. Thursday's WASDE report will remind us again that the world has plenty of available wheat this winter and should not have much price impact unless there is a surprise in USDA's corn estimates. For now, the trend remains up in winter wheat. DTN's National SRW index closed at $4.11 Monday, priced 29 cents below the March contract and down from its highest price in five months. DTN's National HRW index closed at $4.20, near 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