DTN Closing Grain Comments

May Chicago Wheat Leads Grains Higher?

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

General Comments:

Corn was up 2 1/4 cents in the May contract and up 2 1/4 cents in the December. Soybeans were up 13 1/4 cents in the May contract and up 10 cents in the November. Wheat closed up 18 1/2 cents in the May Chicago contract, up 16 cents in the May Kansas City, and up 19 1/4 cents in the May Minneapolis contract. The June U.S. dollar index is down 0.22 at 89.56. June gold is up $3.70 at $1,339.80 while May silver is up 15 cents and May copper is up $0.0250. The Dow Jones Industrial Average is up 381 points at 23,314. May crude oil is up $1.46 at $63.52. May heating oil is up $0.0438 while May RBOB gasoline is up $0.0328 and May natural gas is down $0.008.

Corn:

May corn closed up 2 1/4 cents at $3.90 3/4 Monday, a modest gain that was given help from higher closes in soybeans and wheat. USDA also encouraged some buying Monday after it said last week's corn inspections totaled 76.3 million bushels, more than was expected. Total corn inspections improved to down 23% from a year ago. The overall pace is still bearish, but corn inspections now have a chance to gain on last year as South America's big crops depressed U.S. corn exports through the summer in 2017. Here in the U.S., we don't expect to see much planting progress outside of the South in Monday afternoon's Crop Progress report. Another snowstorm worked across the Northern Plains over the weekend and across the central Midwest on Monday. Temperatures will turn warmer in the central Midwest later this week, but are expected to stay cold in the northern Corn Belt, unfavorable for planting. Friday's CFTC data showed noncommercials still bullish in corn as of April 3, having increased net longs from 301,735 to 367,317, back near their most bullish holding on record. DTN's National Corn Index closed at $3.54 Friday, down from its highest prices since June 2016 and priced 35 cents below the May contract. In outside markets, the June U.S. dollar index is down 0.22 and Dow Jones futures are up 328 points with China's president set to speak on trade issues Tuesday.

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Soybeans:

May soybeans closed up 13 1/4 cents at $10.47 Monday, a show of optimism that trade differences with China will somehow work out as China's President Xi Jinping is set to speak on trade issues Tuesday. U.S. soybean export news improved a little last week and early Monday, USDA said 8.5 million bushels (232,500 mt) of U.S. soybeans were sold to unknown destinations for 2017-18. Monday's weekly inspections report however, was bearish again with only 13.7 million bushels of inspections reported for last week. In spite of trade tensions with China, soybean prices have held remarkably firm. Friday's CFTC data showed noncommercials a little more bullish in soybeans on Apr. 3, the day before China proposed a 25% tariff on U.S. soybeans. Net longs were increased to 210,461, the most since July 2016. Technically, the trend in May soybeans is sideways and the trend in November soybeans is up. Dec soybean meal closed up $5.80 Monday at $382.00, its highest close since July 2016 with USDA expected to lower its crop estimate for Argentina in Tuesday's WASDE report. DTN's National Soybean Index closed at $9.62 Friday, up from its lowest prices in over a month and priced 72 cents below the May contract.

Wheat:

May Chicago wheat closed up 18 1/2 cents and May K.C. wheat closed up 16 cents Monday with revived concerns of dry weather conditions in the southwestern U.S. Plains lifting prices back near March's high. September Minneapolis wheat closed higher a third consecutive day, up 17 3/4 cents to $6.41 1/4, after another snowstorm crossed the Northern Plains over the weekend, adding to concerns of spring wheat planting delays. While wildfire danger remains a concern in the Southern Plains, cold temperatures are expected to hang on in the Northern Plains, increasing serious weather concerns for this year's U.S. wheat crops. Meanwhile, Canada has also been too cold to plant spring wheat, of course, and Manitoba could use more moisture. U.S. wheat exports are not likely to pick up this year with so much competition around the globe. USDA said 15.8 million bushels of wheat inspections took place last week, keeping total inspections down 9% in 2017-18 from a year ago. Friday's CFTC data showed noncommercials lightly bearish in Chicago wheat, holding 16,590 net shorts on April 3. Commercials reduced net longs slightly, to 24,859, finding good value in the mid to upper $4s. Technically, all three wheats are approaching the upper end of their sideways trading ranges. DTN's National SRW Index closed at $4.42 Friday, up from its lowest price in over a month and 31 cents below the May contract. DTN's HRW Index closed at $4.66, up from its lowest price in two months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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Todd Hultman