DTN Closing Grain Comments

General Comments:

March corn was down 1 cent and December 2019 corn was unchanged. January soybeans were down 13 cents and November 2019 soybeans were down 10 cents. March K.C. wheat closed up 8 3/4 cents, March Chicago wheat was up 9 1/2 cents, and March Minneapolis wheat was up 5 1/4 cents. The December U.S. dollar index is up 0.06 at 97.07. February gold is down $3.00 at $1,247.00 while March silver is down 2 cents and March copper is down $0.0025. The Dow Jones Industrial Average is down 37 points at 24,490. January crude oil is up $0.88 at $52.03. January heating oil is up $0.0102 while January RBOB gasoline is up $0.0388 and January natural gas is up 0.035.

Corn:

March corn ended down a penny at $3.84 1/4 Thursday, holding steady in a narrow range this month and staying below resistance at $3.90, while cash prices have been inching higher. While this tends to be a quiet time of year for corn prices, news of a big, 14.6 billion bushel harvest is well known by now and probably won't increase in January, given this year's difficult harvest conditions. Focus has shifted to demand and early Thursday, USDA said last week's export sales and shipments of corn totaled 35.6 million and 37.5 million bushels, respectively, a neutral showing that has total shipments up 79% from a year ago and total export commitments up 16%. The early export boost benefited from smaller South American harvests earlier this year, but that may not be true next time around as crop conditions down south are off to a good start in late 2018. This week's forecast for Argentina does include a chance for local flooding, which we will monitor. 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 Tuesday, near its highest prices in six months and 36 cents below the March contract. In outside markets, the December U.S. dollar index is up 0.06, while commodities outside of ag are mixed to higher.

Soybeans:

January soybeans dropped 13 cents to $9.07 Thursday, finally getting confirmation of a Chinese purchase from USDA, but for a lighter amount than traders had been hoping for. After weeks of rumors, sparked by President Donald Trump's tweet in early November, USDA said 41.5 million bushels (1,130,000 mt) of U.S. soybeans were sold to China for 2018-19, the first significant sale to China in 2018-19. The bullish news is that the sale is a sign of trade progress in the negotiations between the U.S. and China. The bearish news is that China's purchases are still a long way from the 1.017 billion bushels bought in 2017-18. Of course, there may be more sales to follow and much will depend on Brazil's soybean crop in early 2019. Earlier Thursday, USDA said last week's export sales and shipments of soybeans totaled 29.1 million and 42.1 million bushels, respectively, still a bearish pace. Southern Brazil has been drier lately, but has a chance for beneficial rain in Thursday's weekly forecast. Argentina is expecting heavy rains in central and northern crop areas this week with a chance for local flooding. For now, the trend in cash soybeans remains up, helped by modest basis improvement in the context of a high-risk trade environment. DTN's National Soybean Index closed at $8.27 Tuesday, near its highest level in four months and $0.88 below the January contract.

Wheat:

March K.C. wheat closed up 8 3/4 cents at $5.20 Thursday after getting a little better export evidence in USDA's weekly report. USDA said last week's export sales and shipments of wheat totaled 27.7 million and 18.0 million bushels, respectively. After USDA reduced the export estimate for wheat by 25 million to 1.0 billion bushels on Tuesday, total wheat shipments are now down 14% from a year ago and total export commitments are down 10%, slowly closing the gap with USDA's higher estimated pace. Thursday's weather map shows rain falling in the southern U.S. Plains, normally a beneficial feature for winter wheat this time of year, but there has been so much rain in the region lately that the amounts are not needed. It was also helpful to Thursday's U.S. wheat prices that March milling wheat in Europe was up 1.50 euros, near its highest price in three months with unconfirmed talk that Russia's ag minister will meet with exporters on Dec. 21. The trend in cash HRW wheat remains sideways, while cash SRW and HRS prices are trending higher, helped by signs of increased demand. DTN's National HRW Index closed at $4.73 Tuesday, down from a new one-month high and 32 cents below the March contract. DTN's National SRW Index closed at $4.89 Tuesday, down from its three-month high. Trading in December wheat contracts has become dangerously thin, ahead of final trading day on Friday, Dec. 14.

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

Follow him on Twitter @ToddHultman1

(CZ)

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