DTN Closing Grain Comments

General Comments:

Corn was down 1 1/2 cents in the December contract and down 1 1/4 cents in the July. Soybeans were up 4 3/4 cents in the January contract and up 4 3/4 cents in the July. Wheat closed down 1 1/2 cents in the December Kansas City contract, up 3/4 cent in December Chicago, and down 2 1/4 cents in the December Minneapolis contract.

The December U.S. dollar index is up 0.11 at 96.90. December gold is down $10.00 at $1,215.30, while December silver is down 19 cents and December copper is down $0.0085. The Dow Jones Industrial Average is up 416 points at 25,291. December crude oil is down $0.42 at $65.76. December heating oil is up $0.0049 while December RBOB gasoline is down $0.0351 and December natural gas is up 0.061.

Corn:

December corn closed down 1 1/2 cents at $3.63 1/4 Wednesday, keeping a low profile while harvest continues to make progress across the central and western Corn Belt. A line of heavy showers is falling from West Texas to Ohio with a risk of flooding in the Ohio River Valley. More rain is expected to then return to the eastern Midwest early next week, adding to harvest difficulties while the western Corn Belt stays drier. A big corn crop is still expected this fall, but quality concerns will be an issue in the wetter areas. On the demand side, corn got some lightly bullish news Wednesday when the U.S. Energy Department said ethanol inventory dropped from 23.9 million barrels to 22.7 million barrels last week, while production increased to 1.059 million barrels per day. In spite of prices gradually trickling lower, the trend in corn remains up as we head toward a quieter time of year. DTN's National Corn Index closed at $3.25 Tuesday, well above its September low of $3.00 and priced 40 cents below the December contract. In outside markets, the U.S. dollar index is up 0.11, still at its highest price in a year, while outside commodities are mixed.

Soybeans:

January soybeans closed higher for the first time this week, ending up 4 3/4 cents at $8.51 3/4 Wednesday. Similarly, December soybean meal finished up $1.30 at $3.0640, possibly finding support at the lower end of its sideways trading range. While the soybean harvest will be making more progress in the central and western Midwest the next seven days, Arkansas and the Ohio River Valley are getting more heavy showers Wednesday and more rain is expected to return to the eastern Midwest early next week. Soybean damage from this year's wet fall conditions probably will not get a good assessment until USDA's Grain Stocks report on January 11. In the meantime, demand for U.S. soybean exports remains a concern, and on Wednesday, Reuters quoted the CEO of Bunge as saying China may not need U.S. soybeans before Brazil's next harvest in early 2019. Brazil's crop is off to a good start with a broad coverage of adequate moisture along with a chance for heavy rains in southern Brazil this week. The trend in soybeans is struggling to stay sideways, but prices are still holding above their September low. DTN's National Soybean Index closed at $7.37 Tuesday, priced $1.10 below the January contract and still well above the September low of $7.12.

Wheat:

December K.C. wheat traded lower most the day, but ended down just 1 1/2 cents at $4.93 1/4 Wednesday, possibly finding support near its lowest prices in nine months. According to USDA, 2018 posted a 3.7% drop in world wheat production, which eased the burden of excess global supplies. Ending wheat stocks in the top seven exporters are estimated at their lowest level in five years, but the one place in the world where wheat supplies remain abundant is here in the U.S. where exports are dragging, down 22% from last year's anemic pace. Outside the U.S., western Europe has a better chance for beneficial rain this week, while eastern Europe, Ukraine and southern Russia remain dry. For now, the trends in both Chicago and K.C. wheat futures are currently down while Minneapolis wheat is holding sideways. DTN's National HRW index closed at $4.61 Tuesday, but likely fell to new lows on Thursday, trading 34 cents below the December contract. Similarly, DTN's National SRW index closed at $4.66 Tuesday.

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

Follow him on Twitter @ToddHultman1

(BE)

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