DTN Closing Grain Comments

General Comments:

Corn was down 3 1/4 cents in the May contract and down 2 1/2 cents in the December. Soybeans were down 2 3/4 cents in the May contract and down 1 cent in the November. Wheat closed down 6 cents in the May Chicago contract, down 11 cents in the May Kansas City, and down 5 1/2 cents in the May Minneapolis contract. The June U.S. dollar index is down 0.46 at 88.57. April gold is up $4.70 at $1,354.60 while May silver is up 13 cents and May copper is down $0.0120. The Dow Jones Industrial Average is up 495 points at 24,028. May crude oil is down $0.32 at $65.56. May heating oil is down $0.0031 while May RBOB gasoline is down $0.0210 and May natural gas is up $0.026.

Corn:

May corn fell 3 1/4 cents Monday to $3.74, its lowest close in a month after Monday's weekly report of export inspections fell short of USDA's aggressive estimated pace. USDA said 45.4 million bushels of corn were inspected for export last week, keeping total inspections down 28% in 2017-18 from a year ago. With USDA estimating 2.225 billion bushels of corn exports, business is going to have to pick up the pace the next five months or face an increase in ending stocks. USDA's Grain Stocks report on Mar. 29 will be closely watched for demand clues in the first half of 2017-18, as will the Prospective Planting estimates for the 2018 crop. Friday's CFTC data held a small surprise, showing noncommercials still extremely bullish in corn, holding 378,601 net longs as of Mar. 20, even though May prices dropped 17 cents from the previous week. Fundamentally speaking, it remains difficult to see a bullish argument for corn at this time, but we have a whole new season of unknowns in front of us. Technically, weekly momentum remains bearish for corn, going against the seasonal tendency. DTN's National Corn Index closed at $3.40 Friday, near its lowest close in a month and priced 37 cents below the May contract. In outside markets, the June U.S. dollar index is down 0.46 and Dow Jones futures are up 495 points after Treasury Secretary Mnuchin offered optimistic comments over the weekend on trade with China.

Soybeans:

May soybeans ended down 2 3/4 cents at $10.25 1/2 Monday, giving up an early attempt to trade higher while Argentina is facing another seven-day forecast of mostly dry weather. Similarly, May soybean meal started the day higher with help from early commercial buying, but finished down $2.90 as commercials turned to sellers late in the session. As with corn, Friday's CFTC data showed noncommercials still bullish in soybeans, holding 197,820 net longs as of Mar. 20, even though May prices fell 20 cents over the previous week. An increasing trade war with China has given traders reason to be concerned about soybean prices, but so far, China's new tariffs do not include soybeans. Monday's weekly report from USDA showed 21.5 million bushels of soybeans inspected for export last week, keeping total inspections down 12% in 2017-18 from a year ago. Earlier, USDA said 4.85 million bushels (132,000 mt) of U.S. soybeans were sold to unknown destinations and 120,000 mt of U.S. soybean meal were sold to Spain, both for 2017-18. With roughly two-thirds of Brazil's big soybean harvest now complete, China should be well supplied for the next five or six months and that is keeping old-crop soybean prices under pressure while November soybean prices remain in an uptrend. DTN's National Soybean Index closed at $9.50 Friday, up from its lowest close in a month and priced 78 cents below the May contract.

Wheat:

May Chicago wheat closed down 6 cents and May K.C. wheat was down 11 cents at $4.68 1/4 Monday after light scattered showers crossed the Texas Panhandle, Oklahoma, and eastern Kansas. More rain is possible the next couple days, but amounts are apt to be light on the western side of the southwestern U.S. Plains while heavier amounts fall from eastern Texas to southern Illinois -- an area that has already seen plenty of rain this year. Exporting wheat out of the U.S. remains a difficult task this year with so much competition overseas. USDA said Monday that 10.2 million bushels of wheat were inspected for export last week, another bearish amount that now has total inspections down 9% from a year ago. Right on cue with wheat's recent bearish change in trend, Friday's CFTC data showed noncommercials turned slightly bearish in Chicago wheat, going from 6,029 net longs to 4,401 net shorts as of Mar. 20. Commercials increased net longs to 12,687, a hint of increased support for spot prices near $4.50. In spite of drought concerns in the U.S., the trends in winter wheat remain down. DTN's National SRW Index closed at $4.28 Friday, near its lowest in over a month and 32 cents below the May contract. DTN's HRW Index closed at $4.37, up from its lowest prices in over a month.

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

Follow Todd Hultman on Twitter @ToddHultman1

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