DTN Closing Grain Comments

General Comments:

March corn closed up 1/2 cent and December 2019 corn was unchanged. January soybeans closed down 6 1/2 cents and November soybeans were down 5 cents. March K.C. wheat closed down 1 3/4 cents, March Chicago wheat was down 6 cents and March Minneapolis wheat was down 4 1/4 cents. The March U.S. dollar index is up 0.37 at 96.91. February gold is down $4.80 at $1,242.60 while March silver is down 19 cents and March copper is down 0.0105. The Dow Jones Industrial Average is down 469 points at 24,128. January crude oil is down $1.30 at $51.28. January heating oil is down $0.0295 while January RBOB gasoline is down $0.0439 and January natural gas is down $0.271.

For the week:

March corn closed down 3/4 cent and December 2019 corn was up 3/4 cent. January soybeans were down 16 1/4 cents while November 2019 soybeans were down 10 1/2 cents. March Kansas City wheat was up 6 1/4 cents, March Chicago wheat was down 1 1/4 cents, and March Minneapolis wheat was up 2 1/2 cents.

Corn:

March corn traded higher most the day, but ended just a half-cent higher at $3.84 3/4 Friday and was down 3/4 cent on the week. In December, corn prices have been staying well supported, while much of this week's market focus was on the return of China to the U.S. soybean market. USDA did help prices a little early Friday, reporting 4.9 million bushels (125,000 mt) of U.S. corn sold to Japan for 2018-19. What was a good weather start for South American crops has gotten a little more interesting lately as south-central Brazil is drier with only light rain amounts in this week's forecast. Heavy rains are still expected for Argentina with a threat of local flooding. Friday's half-cent gain keeps cash corn prices in an uptrend and near their highest level in six months, in line with their seasonal tendency for this time of year. DTN's National Corn Index closed at $3.48 Thursday, 36 cents below the March contract. Outside markets were bearish for grains Friday with nearly all commodities trading lower and the Dow Jones Industrials trading down 469 points. The March U.S. dollar index up 0.37, climbing higher as the U.K.'s problems with Brexit and France's problems with yellow vest protests made this week's news.

Soybeans:

January soybeans closed down 6 1/2 cents at $9.00 1/2 Friday, a lower day of quiet trading that saw lighter sales announcements from USDA. Early Friday, USDA said 15.8 million bushels (mb) of U.S. soybeans were sold, 11.0 mb (300,000 mt) to China and another 4.8 mb (130,000 mt) to unknown destinations, both for 2018-19. The January contract was also down 16 1/4 cents on the week as early sales reports for China have been lighter than expected. Outside of exports, the other current concerns for soybeans are what USDA might say about this year's U.S. soybean harvest on Jan. 11 and South America's weather. It is always difficult to out-guess USDA, but a 1% or 2% reduction in this year's crop estimate seems reasonable, given the excessively wet harvest finish for the Southern Plains and southeastern Midwest. As mentioned above, this week's forecast is for lighter amounts in south-central Brazil and Argentina is expecting heavy rains. Overall, crop conditions down south are considered favorable, but change is still possible. Technically, the trend in soybeans remains up, but the fundamental outlook is bearish and the trade environment is highly uncertain. DTN's National Soybean Index closed at $8.20 Thursday, down from its highest close in four months and $0.87 below the January futures contract.

Wheat:

March K.C. wheat ended down 1 3/4 cents at $5.18 1/4, a quiet Friday of trading that secured a gain of 6 1/4 cents on the week. March Chicago wheat dropped 6 cents, bucking the bearish influence of a rising U.S. dollar and economic and political difficulties in Europe. Even though Friday's trading did not show much bullish response, this week's forecast for heavy rain in Argentina catches wheat 57% harvested and also vulnerable to a forecast for sub-freezing temperatures. Here in the U.S., Arkansas is getting more rain Friday, along with much of the southeastern U.S. as far north as central Indiana. On the demand side, wheat has had an interesting week of slightly higher sales reported Thursday and the Mar/May spreads in Chicago and Minneapolis continue to show increased demand for the front month, although Friday's spreads backed down from recent highs. For cash HRW wheat, the trend is sideways, just below October's high of $4.94. For cash SRW and HRS wheat, the trends remain up. DTN's National HRW Index closed at $4.90 Thursday, up from its November low and down 30 cents from the March futures contract. DTN's National SRW Index closed at $5.04 Thursday, its highest prices in three months.

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

Follow him on Twitter @ToddHultman1

(CZ)

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