DTN Closing Grain Comments

General Comments:

Corn was up 2 3/4 cents in the May contract and up 1 1/2 cents in the December. Soybeans were up 6 cents in the May contract and up 1/4 cent in the November. Wheat closed up 18 cents in the May Chicago contract, up 17 1/2 cents in the May Kansas City, and up 12 3/4 cents in the May Minneapolis contract. The March U.S. dollar index is up 0.21 at 90.49. April gold is up $1.70 at $1,320.30 while March silver is up 1 cent and May copper is down $0.0465. The Dow Jones Industrial Average is up 40 points at 25,450. April crude oil is down $0.62 at $62.39. April heating oil is down $0.0429 while April RBOB gasoline is down $0.0365 and April natural gas is down $0.003.

Corn:

May corn closed up 2 3/4 cents at $3.82 Wednesday, near its highest price in six months with bullish influence from the drought-related rally in U.S. winter wheat and from a continuation of dry weather in Argentina. It is difficult to believe that May corn was making new contract lows just over two months ago when all the market could think about was the larger-than-expected harvest of 14.6 billion bushels in 2017 and an anemic pace of exports. Since then, exports haven't gotten much better and flooding in the eastern Midwest is disrupting the ability to move grain. However, the market's attention has turned to drought -- both in Argentina and in the western U.S. Plains -- and that has turned the trend higher, more in line with corn's seasonal tendency, while heavy supplies remain in storage. At some point, a higher price will entice corn out of bins, but we have not seen signs of that happening yet. DTN's National Corn Index closed at $3.42 Tuesday, priced 29 cents below the March contract and at its highest price in seven months. In outside markets, the March U.S. dollar index is up 0.21, still finding traction from Fed Chairman Powell's comment from Tuesday, "...the economic outlook remains strong."

Soybeans:

May soybeans closed up 6 cents at $10.55 1/2 Wednesday, a new contract high close that finally exceeded last July's high after two days of unsuccessful attempts. May soybean meal has been the most bullish beneficiary of Argentina's dry weather in February and that contract closed up $5.50 at another new 19-month high of $394.70. Wednesday's satellite map showed light rain in northern Argentina, but light amounts the next seven days are not expected to give row crops much help. After last week's cancellation of 13.3 million bushels of soybean sales by China, it was interesting that USDA reported a 9.2 million bushel (250,000 mt) sale of U.S. soybeans to unknown destinations for 2017-18 early Wednesday, following a 4.8 million bushel sale to China on Monday. On the bearish side, the seven-day forecast for central Brazil looks a little drier, favorable for harvest progress. While soybeans' fundamental outlook remains confusing, the trends are clearly higher in May soybeans and soybean meal. DTN's National Soybean Index closed at $9.70 Tuesday, at its highest price in nearly a year and priced 68 cents below the March contract.

Wheat:

May Chicago wheat closed up 18 cents at $4.95 Wednesday while May K.C. wheat was up 17 1/2 cents at $5.22 1/4, a new six-month high and driven by ongoing drought in the western U.S. Plains. Red flag warnings are posted around the Texas Panhandle again on Wednesday and risk of wild fire remains a concern in western Kansas this weekend. Not only does the seven-day forecast remain dry for the southwestern Plains, even the three-month forecast through May offers little hope for moisture. Forecasts can always change, but for now, concerns about the future of this year's U.S. winter wheat crop are driving not only K.C. wheat prices higher, but also helping Chicago wheat and corn prices trade higher. Fundamentally, the world has plenty of old-crop wheat to compete for exports, but technically, the trends in U.S. winter wheat are clearly up. DTN's National SRW Index closed at $4.37 Tuesday, at its highest price in six months and priced 26 cents below the March contract. DTN's National HRW Index closed at $4.49, also near its highest price in seven months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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