DTN Closing Grain Comments

General Comments:

March corn was down 4 1/2 cents and December 2019 corn was down 3 cents. March soybeans were down 14 cents and November 2019 soybeans were down 11 1/4 cents. March K.C. wheat closed down 7 cents, March Chicago wheat was down 6 1/2 cents, and March Minneapolis wheat was down 12 1/4 cents. The March U.S. dollar index is up 0.50 at 96.50. February gold is down $2.50 at $1,269.30 while March silver is up 26 cents and March copper is up $0.0320. The Dow Jones Industrial Average is up 602 points at 22,394. February crude oil is up $3.66 at $46.19. February heating oil is up $0.0732 while February RBOB gasoline is up $0.0796 and February natural gas is up 1.6 cents.

Corn:

March corn closed down 4 1/2 cents at $3.73 1/4 Wednesday, likely encountering more noncommercial liquidation as prices make new lows in December. For the first time in a while, outside commodities were higher and couldn't be blamed for Wednesday's selling. Earlier Wednesday, USDA did release its report of weekly grain inspections, showing 39.2 million bushels of corn inspected last week. So far in 2018-19, total corn inspections are up 72% from a year ago, keeping up a bullish pace. Wednesday's U.S. weather map has snow in the north- central Plains and rain in the Southern Plains, moving eastward across the U.S. through Friday and making travel difficult. In South America, southern Brazil remains the drier area of concern with light to moderate amounts expected for the region this week. Heavier amounts in Argentina are a threat for local flooding, but at this point, corn prices aren't showing much concern. In spite of the recent weakness in corn, the trend of cash corn prices remains up. DTN's National Corn Index closed at $3.43 Monday, down from its highest price in six months and 35 cents below the March contract. In outside markets, most commodities are trading higher and the Dow Jones Industrials are up 237 points.

Soybeans:

March soybeans dropped 14 cents to $8.83 Wednesday, falling back below its 100-day average after failing to take out the old July high of $9.41 3/4 earlier this month. Announced soybean sales to China plus unknown have amounted to roughly 3.3 mmt or 123 million bushels since trade began again two weeks ago and, while the business is welcome, it is not close to enough to ease the strain of this season's U.S. soybean surplus. U.S. officials have said trade negotiations with China have a March 1 deadline to find an agreeable solution or else more tariffs will follow. At this point, it is difficult to know how things are going. Earlier Wednesday, USDA said 23.9 million bushels of soybeans were inspected for export last week, putting the total for 2018-19 down 42% from a year ago. As far as soybeans are concerned, China appears well positioned to wait for Brazil's harvest, which has already begun in Mato Grosso. It is also bearish for U.S. soybean prices that Brazil's FOB price in Paranagua is only 15 cents above the comparable price in New Orleans. Wednesday's lower close turned the trend in cash soybeans to sideways in a context of heavy U.S. supplies and a high-risk trade environment. DTN's National Soybean Index closed at $8.00 Monday, down from its highest level in four months and $0.84 below the January contract.

Wheat:

March K.C. wheat dropped 7 cents to $4.95 1/2 Wednesday, still lingering near the lowest March prices of 2018 with no bullish news to motivate the buy side of the market. It also does not help that noncommercials remain stubbornly net long and are likely under pressure to liquidate. According to USDA, Russia is expected to win the most export business in 2018-19, capturing 36.5 mmt or 1.34 billion bushels of business. The U.S. is supposed to come in second with a billion bushels of exports, but that is looking too optimistic at this point. Earlier Wednesday, USDA said 20.0 million bushels of wheat were inspected for export last week, bringing the total for 2018-19 to 450 million bushels and 14% less than a year ago when only 901 million bushels were exported. Futures charts are a bit deceptive in that they look more bearish than cash prices, but at this quiet time of year, there is not much happening to keep potential buyers involved. 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 $4.73 Monday, down from a three-month high and 30 cents below the March contract. DTN's National SRW Index closed at $4.85 Monday, 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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