DTN Closing Grain Comments

General Comments:

March corn was up 4 3/4 cents and July corn was up 4 1/2 cents. January soybeans were up 15 cents and July soybeans were up 14 1/2 cents. March K.C. wheat closed up 8 3/4 cents, March Chicago wheat was up 5 cents, and March Minneapolis wheat was up 1 1/2 cents. The December U.S. dollar index is down 0.61 at 96.67. December gold is up $8.40 at $1,221.80 while December silver is up 21 cents and December copper is up $0.0865. The Dow Jones Industrial Average is up 553 points at 25,302. January crude oil is down $0.38 at $51.18. January heating oil is down $0.0285 while January RBOB gasoline is down $0.0059 and January natural gas is up 0.399.

Corn:

March corn closed up 4 3/4 cents at $3.73 1/4 -- a bullish turn from its latest path of sagging prices -- with help from Wednesday's higher soybean prices. Wednesday's weather map showed a mix of snow and ice in the central Midwest with more precipitation and wintry travel expected this weekend. Other than waiting for Thursday's weekly export sales reports, there is not a lot going on this time of year and recent corn sales have been lighter than what we saw earlier in the season. Corn demand for ethanol remains a bearish concern, but so far, ethanol production is holding steady, reported up slightly, at 1.048 million barrels per day last week. Ethanol inventory increased from 22.8 million to 22.9 million barrels. The seven-day forecasts in Brazil and Argentina are currently favorable with light precipitation in Argentina giving planting a good start. For now, the trend in corn remains sideways during this quieter time of year. DTN's National Corn Index closed at $3.27 Tuesday, well above its September low of $3.00 and priced 30 cents below the December contract. In outside markets, the December U.S. dollar index is down 0.61 after the U.S. Commerce Department said real GDP was up 0.9% in the third quarter and up 3.0% from a year ago, as expected. CNBC reported Federal Reserve Chairman Powell said interest rates were just below neutral, an indication that the end of the rate hike cycle may be near.

Soybeans:

January soybeans jumped up 15 cents Wednesday to $8.90 1/2 after AP reported China's President Xi Jinping told Spain's Parliament that China will streamline access to their markets and increase intellectual property protections. The same promises were uttered in May, but were deemed insufficient by U.S. negotiators. With U.S. and Chinese leaders set to meet Friday in Buenos Aires, traders took the comments as signs of hope for progress on a trade deal. On the demand side, soybean export sales remain in the dumps, but USDA did say earlier Wednesday 9.9 million bushels (268,748 mt) of U.S. soybeans were sold to unknown destinations for 2018-19. Thursday morning's export sales report will be noted, but the main event this week will be the result of President Donald Trump's talks with China's President Xi Jinping. For now, the trend in soybeans remains sideways and there has been modest basis improvement. Technically, prices remain confined to a symmetrical triangle pattern. DTN's National Soybean Index closed at $7.87 Tuesday, priced $0.89 below the January contract and still above the September low of $7.12.

Wheat:

March K.C. wheat closed up 8 3/4 cents at $4.92 1/4 Wednesday, a surprising turn higher after drifting lower for most of November. There probably was some bullish influence from corn and soybeans, but it also may be that noncommercials have liquidated enough of their long positions to be near neutral. The seven-day forecast expects light precipitation in the southwestern U.S. Plains and heavier amounts in the soft red winter wheat areas where many fields have had too much rain since fall. As we near the halfway point in wheat's season, total U.S. wheat shipments are down 17% from a year ago and HRW exports are down 40%. It does help that USDA is estimating ending wheat stocks at the top eight exporters to be down 642 million bushels in 2018-19 to 1.98 billion bushels, but the U.S. has yet to see much export benefit. As the Northern Hemisphere goes dormant, cash SRW wheat and spring wheat prices continue to trend sideways, while the trend in cash HRW wheat remains lower. DTN's National HRW Index closed at $4.35 Tuesday, 23 cents below the December contract and below former support at $4.50. DTN's National SRW Index closed at $4.69 Tuesday and is still above its support.

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

Follow him on Twitter @ToddHultman1

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