DTN Closing Grain Comments

General Comments:

March corn was up 3/4 cent and December 2019 corn was up 1 3/4 cents. January soybeans were up 5 1/4 cents and November 2019 soybeans were up 4 3/4 cents. March Kansas City wheat closed down 5 1/2 cents, March Chicago wheat was down 4 1/4 cents, and March Minneapolis wheat was unchanged.

The December U.S. dollar index is up 0.23 at 97.41. February gold is down $2.40 at $1,247.00 while March silver is up 2 cents and March copper is up $0.0455. The Dow Jones Industrial Average is down 21 points at 24,402. January crude oil is up $0.60 at $51.60. January heating oil is up $0.0032 while January RBOB gasoline is up $0.0202 and January natural gas is down $0.147.

Corn:

March corn ended up 3/4 cent at $3.84 3/4 Tuesday after USDA released small changes in its December WASDE report as was expected. USDA increased its estimate of U.S. ending corn stocks from 1.736 billion to 1.781 billion bushels (bb) for 2018-19. The main cause for the increase was a 50 million bushel (mb) reduction in the estimate of ethanol demand as the ethanol industry experiences negative profit margins. In the world section, USDA increased its estimate of world ending corn stocks from 307.51 million metric tons (mmt) to 308.80 mmt or 12.16 bb. The change was related to a prior year revision, while early corn crop estimates for Brazil and Argentina were unchanged. The next WASDE report on Jan. 11 will have Dec. 1 grain stocks included and will have a better assessment of this year's corn harvest. For now, the trend in cash corn remains up during this quieter time of year, helped by active exports and a reluctance of farmer selling at current prices. DTN's National Corn Index closed at $3.48 Monday, near its highest prices in six months and priced 36 cents below the March contract. In outside markets, the December U.S. dollar index is up 0.23, nudging toward resistance from its November high of 97.53.

Soybeans:

January soybeans closed up 5 1/4 cents at $9.15 Tuesday, surviving USDA's bearish adjustment to world ending soybean stocks. As typically happens in December, USDA made no changes to U.S. crop estimates, and as it turns out, USDA made no adjustments to U.S. demand either, keeping its estimate of ending stocks unchanged at 955 mb. Even so, the lack of actual soybean exports remains a bearish concern for soybean prices with traders still waiting for some sort of purchase. Early Tuesday, President Donald Trump tweeted to watch for important announcement from China, again stoking hope that big ag purchases are on the way, but this has become a waiting game for traders, still on the watch for any evidence of real trade progress. USDA increased its estimate for world ending soybean stocks from 112.08 mmt to 115.33 mmt (4.24 bb). Part of the increase came from the revision of a prior year, which included increasing Brazil's 2017-18 soybean crop estimate from 119.80 mmt to 120.30 mmt (4.42 bb). Brazil's 2018-19 soybean crop estimate was also increased from 120.50 mmt to 122.00 mmt (4.48 bb). Argentina has a chance for heavy rains and possible local flooding this week, but so far, the outlook for South America's new crops are a bearish concern for soybean prices. For now, the trend in cash soybeans is up, helped by modest basis improvement, but also taking place in a high risk trade environment. DTN's National Soybean Index closed at $8.22 Monday, near its highest level in four months and priced $0.88 below the January contract.

Wheat:

March K.C. wheat ended down 5 1/2 cents at $5.04 3/4 Tuesday, not finding much encouragement from Tuesday's WASDE numbers. USDA reduced the U.S. wheat export estimate by 25 mb, resulting in an increase in the ending stocks estimate for 2018-19, from 949 mb to 974 mb. USDA increased its world ending wheat stocks estimate from 266.71 mmt to 268.10 mmt or 9.85 bb, a little more than was expected. Part of the increase came from a revision to a prior year and small tweaks were made to crop estimates. Australia's wheat crop was reduced 0.5 mmt and Canada's crop was increased by 0.3 mmt. Overall, there was not much in Tuesday's report to help support winter wheat prices and both K.C. and Chicago finished lower. Even so, the trend for cash HRW wheat has turned sideways, while cash SRW and HRS prices are trending higher. DTN's National HRW index closed near a new one-month high of $4.78 Monday, 32 cents below the March contract. DTN's National SRW index closed at $4.93 Monday, near a new three-month high. Trading in December wheat contracts has become dangerously thin, ahead of final trading day on Dec. 14.

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

Follow him on Twitter @ToddHultman1

(CZ)

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