DTN Closing Grain Comments

General Comments:

Corn closed down 3 3/4 cents in the December contract and was down 3 1/4 cents in the July. Soybeans closed up 7 3/4 cents in the January and up 8 1/4 cents in the July. Wheat closed down 9 3/4 cents in the December Kansas City, down 5 3/4 cent in the December Chicago, and was down 6 3/4 cents in the December Minneapolis. The December U.S. dollar index is up 0.20 at 96.75. December gold is down $16.00 at $1,209.10 while December silver is down 28 cents and December copper is down 0.0525. The Dow Jones Industrial Average is down 237 points at 25,954. December crude oil is down $0.61 at $60.06. December heating oil is down $0.0074 while December RBOB gasoline is down $0.0272 and December natural gas is up $0.177.

For the week:

December corn closed down 1 1/2 cents and July was down 1 cent. January soybeans were down 1 cent while the July was up 1 cent. December Kansas City wheat was down 16 3/4 cents, December Chicago wheat was down 6 3/4 cents, and December Minneapolis wheat was down 7 1/4 cents.

Corn:

December corn fell 3 3/4 cents to $3.69 3/4 Friday and was down 1 1/2 cents on the week. Considering USDA's 5.9 billion bushel (bb) upward revision in China's corn stocks on Thursday, prices held together well and the main reason is that China is not an exporter of corn. That fact alone also makes us wonder about the quality of corn that China's National Grain and Oils Information Center (CNGOIC) added to their official stocks total. Aside from the China issue, USDA estimated 2.38 bb of ending corn stocks among the top four exporters of corn in 2018-19, the lowest in three years. Here in the U.S., corn export commitments are up 16% in 2018-19 from a year ago and that is helping support prices as we approach the end of a big harvest. For now, the trend in corn remains up, in line with its seasonal pattern. DTN's National Corn Index closed at $3.38 Thursday, staying above the September low and 36 cents below the December contract, showing gradual basis improvement. In outside markets, the December U.S. dollar index is up 0.20 after the U.S. Labor Department said producer prices were up 0.6% in October and up 2.9% from a year ago. It was the biggest monthly gain in six years, reported Marketwatch.com.

Soybeans:

January soybeans closed up 7 3/4 cents at $8.86 3/4 Friday, losing just a penny on the week. As with corn, soybean prices held together fairly well, considering USDA cut the soybean export estimate by 160 million bushels (mb) and raised the ending stocks estimate to a higher-than-expected 955 mb. One factor helping support soybean prices is the hope expressed by last week's tweet from President Trump that the U.S. and China may be getting closer to a trade agreement. Granted, it is easy to be skeptical of the tweet, but we also see Brazil's FOB soybean prices down 81 cents from their October high, adding to suspicions that trade progress may be happening. Meanwhile, this week's snow in the western and central Plains is not helping soybean harvest progress. In South America, early rains have been mostly helpful to the new crops. According to Dow Jones and private consultant AgRural, 71% of Brazil's soybeans are planted, well ahead of their usual pace. In Argentina, too much rain in the seven-day forecast may slow planting. Fundamentally, the outlook for soybeans remains bearish, but would look much better if a trade agreement were to be reached. For now, soybeans are trading within a sideways range. DTN's National Soybean Index closed at $7.83 Thursday, still up from its lowest price in 11 years and priced $0.96 below the November contract. There were 249 delivery intentions for November soybeans early Friday.

Wheat:

December K.C. wheat dropped 9 3/4 cents to $4.87 1/2 Friday and was down 16 3/4 cents on the week, likely pressured by noncommercial selling as traders lose patience with prices that are drifting near their lowest level in ten months. Thursday's USDA report also did not help, showing modest increases in the estimates of both world wheat production and world wheat ending stocks. Even with the increases, however, ending wheat stocks among the top seven exporters total 1.91 bb, the lowest in six years with 949 mb estimated in the U.S. USDA's estimate of winter wheat seedings is due out January 11 and should help us understand more about how disrupted planting season was in Kansas this fall. This week's snow and cold temperatures certainly didn't help this state caught with standing soybeans still in fields. For now, the trends in all three wheats are sideways, but it is clear that Minneapolis wheat is holding firmer than the two winter wheats. DTN's National HRW index closed at $4.65 Thursday, above its July low of $4.50 and down 32 cents from the December contract. DTN's National SRW index closed at $4.76 Thursday, up from its July low of $4.51.

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

Follow him on Twitter @ToddHultman1

(CZ)

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