DTN Closing Grain Comments

Winter Wheat Regains Lost Ground

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

General Comments:

Corn was up 1 cent in the March contract and up 3/4 cent in the December. Soybeans were down 2 1/4 cents in the May contract and down 1/4 cent in the November. Wheat closed up 4 3/4 cents in the May Chicago contract, up 4 1/2 cents in the May Kansas City, and up 3 1/4 cents in the May Minneapolis contract. The March U.S. dollar index is down 0.20 at 89.71. April gold is down $0.10 at $1,332.00 while March silver is down 6 cents and March copper is up $0.0170. The Dow Jones Industrial Average is up 242 points at 25,040. April crude oil is up $1.09 at $62.77. April heating oil is up $0.0201 while April RBOB gasoline is up $0.0176 and April natural gas is down $0.012.

Corn:

March corn ended up a penny at $3.74 3/4 on low volume, keeping a quiet pattern of trading while prices loiter near their three-month highs. South American weather continues to offer support with another dry, seven-day forecast issued for southern Brazil and Argentina. Also, frequent rains across central Brazil have a chance to delay planting of the second corn crop. However, so far, Brazil's soybean harvest is close to its usual pace with roughly half of Mato Grosso finished. One consistent source of support for corn prices has been ethanol production. Early Thursday, the U.S. Energy Department said last week's ethanol production increased from 1.016 million to 1.068 million barrels per day while ethanol inventory slipped from 22.9 million to 22.8 million barrels. The weak link in corn demand has been exports and on that front, USDA mentioned 5.1 million bushels (130,000 mt) of U.S. corn were sold to unknown destinations for 2017-18. Corn supplies are plentiful, making it difficult for March corn to trade higher, but as seasonally inclined, the trend remains up for now. DTN's National Corn Index closed at $3.36 Wednesday, priced 30 cents below the March contract and down from its highest price in six months. In outside markets, the March U.S. dollar index is down 0.20 while commodities are mostly mixed.

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Soybeans:

May soybeans started the day lower, trading both sides of Wednesday's close and eventually closing down 2 1/4 cents at $10.43 1/4 on low volume. In spite of the loss, prices are still within a dime their July high of $10.53 with ongoing support from another dry, seven-day forecast for southern Brazil and Argentina. Depending on what source you pick, Brazil's soybean harvest is somewhere around 20% to 25% complete, able to skirt by February's rainy weather, so far. USDA's weekly report of export sales will be released Friday morning, but earlier Thursday, USDA said 4.0 million bushels (110,000 mt) of U.S. soybeans were sold to unknown destinations, half for 2017-18 and half for 2018-19. It was a small amount and the odds seem to favor another bearish export report early Friday. The fundamental outlook for soybeans remains confusing while Brazil harvests a 4.1 billion bushel crop, but technically, the trends clearly remain up in May soybeans and May meal. DTN's National Soybean Index closed at $9.64 Wednesday, at its highest prices in 11 months and priced 70 cents below the March contract.

Wheat:

May Chicago wheat was up 4 3/4 cents and May K.C. wheat was up 4 1/2 cents, modest rebounds after this week's lower start with ongoing concerns about the impact of this winter's weather on crops. Thursday's U.S. Drought Monitor showed slight moisture improvement in southern Illinois, but not much change otherwise and the western Plains continue to face a mostly dry seven-day forecast. Wednesday's rains did offer some flooding threat, but have already pushed eastward and were not as big of a problem as earlier feared. While world wheat supplies remain plentiful, drought is prevalent throughout the southwestern U.S. Plains and remains a threat to winter crops. For now, the trends in winter wheat remain up. DTN's National SRW index closed at $4.19 Wednesday, down from its highest price in six months and priced 28 cents below the March contract. DTN's National HRW index closed at $4.25, also down from its highest price in six months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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Todd Hultman