DTN Closing Grain Comments

Outside Markets Weigh on Grain Prices

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

March corn was down 6 1/2 cents and December 2019 corn was down 5 3/4 cents. March soybeans were down 6 3/4 cents and November 2019 soybeans were down 6 1/4 cents. March K.C. wheat closed up 1 cent, March Chicago wheat was up 1 cent, and March Minneapolis wheat was down 1/2 cent. The March U.S. dollar index is down 0.81 at 95.67. February gold is up $10.80 at $1,267.20 while March silver is up 4 cents and March copper is down $0.0170. The Dow Jones Industrial Average is down 491 points at 22,833. February crude oil is down $2.25 at $45.92. February heating oil is down $0.0575 while February RBOB gasoline is down $0.0624 and February natural gas is down 0.097.

Corn:

March corn dropped 6 1/2 cents to $3.75 1/4 Thursday, likely seeing noncommercial liquidation in spite of aggressive buying of corn from Mexico. USDA said early Thursday export sales and shipments of corn totaled 77.7 million and 38.4 million bushels last week, a new marketing year high for sales, thanks to large purchases from Mexico. Total corn shipments are now up 76% in 2018-19 from a year ago, maintaining their bullish pace. USDA also announced another 16.8 million bushels (426,800 mt) of U.S. corn sold to Mexico, 14.7 mb of which were for 2018-19 and the rest (53,345 mt) for 2019-20. Even though the export news was bullish for corn, traders paid no attention, as much of Thursday's commodity board showed losses, influenced by new lows in the Dow Jones Industrials and crude oil. The other bearish influence on Thursday's corn prices came from this week's forecast for helpful rains in southern Brazil and lighter amounts in Argentina -- both good for crops. In spite of Thursday's loss, the trend of cash corn prices remains up. DTN's National Corn Index closed at $3.47 Wednesday, down from its highest price in six months and 35 cents below the March contract. In outside markets, the Dow Jones Industrials are down 491 points, digesting Wednesday's Federal Reserve statements and also showing concerns of a possible government shutdown.

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Soybeans:

March soybeans fell 6 3/4 cents to $9.06 1/4 Thursday, a surprisingly small loss after news broke that the U.S. charged two Chinese nationals with a global hacking campaign to steal technology and intellectual property. According to CNBC.com, Deputy Attorney General Rod Rosenstein also accused the Chinese government of being involved. At the same time, most commodities traded lower Thursday, along with the U.S. stock market as investors continue to show concerns about the world economy. Earlier Thursday, USDA said last week's export sales and shipments of soybeans totaled 104.2 million and 49.2 million bushels last week, a new marketing year high for sales, helped by China's return last Thursday. Even so, total soybean export commitments are down 30% from a year ago with more sales expected to be added to last week's total. USDA also said 7.5 million bushels (204,000 mt) of U.S. soybeans were sold to China and 9.4 million bushels (257,000 mt) were sold to unknown destinations, both for 2018-19; 100,000 mt of soybean meal was sold to Colombia for 2018-19. So far in 2018-19, meal commitments are up 11% from a year ago and bean oil export commitments are up 43% from a year ago. For now, the trend in U.S. cash soybeans remains up, in a context of heavy supplies and a high-risk trade environment. DTN's National Soybean Index closed at $8.17 Wednesday, down from its highest level in four months and $0.83 below the January contract.

Wheat:

March K.C. wheat ended with a slight one-cent gain at $5.09 1/2, a slim rebound that still has prices down on the week. There wasn't much trade volume in Thursday's winter wheat contracts, but it was impressive that this is one sub-group of commodities that held a positive gain on the day after getting hit with two days of sharp losses. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 11.5 million and 24.1 million bushels, respectively, another bearish week for wheat sales. Traders will be watching for news of Friday's meeting in Russia, looking for any sign of how Russian exports are doing. Thursday's U.S. Drought Monitor showed a bit of moderate drought in northeastern Oklahoma and eastern Colorado, but the southwestern U.S. Plains appears to have plenty of moisture at this time. For now, the trends in cash HRW and HRS wheat are sideways, while the trend in cash SRW wheat remains up. DTN's National HRW Index closed at $4.79 Wednesday, down from a three-month high and 29 cents below the March contract. DTN's National SRW Index closed at $4.93 Wednesday, down from its four-month high.

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

Follow him on Twitter @ToddHultman1

(CZ)

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Todd Hultman