DTN Closing Grain Comments

General Comments:

Corn was down 2 1/4 cents in the May contract and down 2 cents in the December. Soybeans were down 2 1/4 cents in the May contract and down 1 1/2 cents in the November. Wheat closed down 4 3/4 cents in the May Chicago contract, down 5 cents in the May Kansas City, and up 2 1/2 cents in the May Minneapolis contract. The June U.S. dollar index is up 0.02 at 89.30. June gold is up $8.30 at $1,354.20 while May silver is up 6 cents and May copper is down $0.0270. The Dow Jones Industrial Average is down 116 points at 24,292. May crude oil is up $1.30 at $66.81. May heating oil is up $0.0304 while May RBOB gasoline is up $0.0282 and May natural gas is up $0.018.

Corn:

May corn closed down 2 1/4 cents at $3.87 Wednesday, a quiet day of low volume trading as prices found little new in Tuesday's updated old-crop estimates from USDA. Crop estimates were reduced for Brazil and Argentina, but any bullish impact that may have resulted was offset by a 5.3 mmt reduction in USDA's estimate of world demand. Wednesday morning, the U.S. Energy Department said last week's ethanol production slipped from 1.038 million to 1.034 million barrels a day -- still an important source of support for corn prices. Ethanol inventory dropped from 22.4 million to 21.8 million barrels, the lowest on hand since November. All but the northern Corn Belt is enjoying warmer temperatures that should last into Friday, but planting efforts remain confined to the South with another winter storm expected this weekend. Plentiful old-crop corn supplies are keeping the trend sideways in May corn while the trend in Dec corn remains up with prices near their highest levels in eight months. DTN's National Corn Index closed at $3.55 Tuesday, near its highest prices since June 2016 and priced 34 cents below the May contract. In outside markets, the June U.S. dollar index is up 0.02 after the U.S. Labor Department reported consumer prices up 2.4% in March from a year ago, slightly less than expected. Lower trading in the Dow Jones Industrial Average also showed some concern about a possible military engagement with Syria.

Soybeans:

May soybeans tried to hold a modest gain Wednesday, but ended down 2 1/4 cents at $10.47 3/4 on light volume. Even so, prices are still finding support from tight soybean supplies in South America and Tuesday's encouraging comments from China's President Xi Jinping regarding trade. Wednesday's trade saw Brazil's FOB soybean price jump to $11.83 a bushel, the highest since August 2016 and 43 cents above the FOB price in New Orleans. This recent rally in Brazil's soybean price is a strong bullish surprise after USDA just increased Brazil's crop estimate to a record high 115.0 mmt (4.23 bb), but also lowered its estimate of Brazil's ending soybean stocks, from 49 million to 27 million bushels (mb) for 2017-18. Adding to the notion of tight supplies in South America, Argentina made its second purchase of U.S. new-crop soybeans this week. Early Wednesday, USDA said 5.2 mb (141,518 mt) of U.S. soybeans were sold to Mexico and 4.4 mb (120,000 mt) were sold to Argentina, both for 2018-19. Once again, it is looking like stronger-than-expected demand from China is providing direct bullish support to soybean prices in Brazil and indirect support to new-crop soybean prices in the U.S. -- even while talk of a 25% tariff on U.S. soybeans has not yet been ruled out. The trend in May soybeans is sideways while the trend in Nov soybeans remains up with futures spreads showing bullish commercial support. DTN's National Soybean Index closed at $9.80 Tuesday, back near its highest prices in over a year and priced 70 cents below the May contract.

Wheat:

May Chicago wheat ended down 4 3/4 cents and May K.C. wheat was down a nickel at $5.16 3/4 Wednesday, trading lower most the day after Tuesday's slightly higher estimates of U.S. and world ending wheat stocks from USDA were officially bearish. In the bigger picture, USDA's estimates offered no surprises and were confined to the current season, which runs out at the end of May. Wheat traders are currently more interested in wheat's new season and, in that regard, the seven-day forecast continues to threaten U.S. wheat production. The southwestern Plains is expected to stay mostly dry, another winter storm will emerge from the northwestern U.S. Plains on Friday and move across the northern and central Midwest through the weekend, and more rain is headed to the Delta and eastern Midwest where some SRW wheat fields have already had plenty. Outside the U.S., there is some concern of dryness in China, but no significant problems are being reported from the world's major wheat regions. The trends remain sideways for all three wheats. National SRW Index closed at $4.60 Tuesday, near its highest prices in eight months and 32 cents below the May contract. DTN's HRW Index closed at $4.81, near its highest price in two years.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.