DTN Closing Grain Comments

General Comments:

March corn was down 1/2 cent and December 2019 corn was unchanged. March soybeans were down 1/2 cent and November 2019 soybeans were down 1/2 cent. March K.C. wheat closed down 7 1/4 cents, March Chicago wheat was down 8 1/4 cents, and March Minneapolis wheat was down 1 1/2 cents. The March U.S. dollar index is down 0.21 at 95.75. February gold is down $0.60 at $1,282.40 while March silver is up 7 cents and March copper is down $0.0455. The Dow Jones Industrial Average is up 183 points at 23,218. February crude oil is up $0.07 at $45.40. February heating oil is up $0.0184 while February RBOB gasoline is down $0.0043 and February natural gas is down 30.2 cents.

Corn:

March corn traded lower most of Monday on light volume, ending the final session of 2018 down a half-cent at $3.75. Corn tried to trade higher early, but not even President Donald Trump's enthusiastic tweet on Saturday, claiming big trade progress with China, was enough to lift corn or soybean prices on Monday. The federal government remains constrained by a partial shutdown, but USDA did release its weekly report of grain export inspections, thanks to separate funding. USDA said 36.0 million bushels of corn were inspected for export last week, putting total inspections up 69% in 2018-19 from a year ago. The past week of corn sales is anyone's guess until lawmakers strike a deal to re-open the federal government and make export sales public again. Meanwhile, hot and dry weather in southern Brazil has had an adverse effect on crops. Brazil's CONAB will have updated crop estimates on Jan. 11 and reductions for corn and soybean crops seem likely, but prices are not showing much concern yet. In spite of the recent weakness in corn prices, the trend of cash corn remains up. DTN's National Corn Index closed at $3.41 Friday, down from its highest price in six months and 34 cents below the March contract. In outside markets, the March U.S. dollar index is trading down 0.21 and most commodities are higher outside the ag sector.

Soybeans:

March soybeans were up 6-1/2 cents at one point, but finished a half-cent lower at $8.95 Monday, not getting much of a boost from President Trump's Saturday tweet, which claimed big progress being made in trade talks with China. It is possible China has bought more soybeans, but while the federal government is in partial shutdown, we are not getting the usual export sales information from USDA. Earlier Monday, USDA did say 24.9 million bushels of soybeans were inspected for export last week. After nearly four months into 2018-19, total soybean inspections are down 42% from a year ago and well below the pace needed to reach USDA's export estimate of 1.900 billion bushels by the end of August. As mentioned above, crops in southern Brazil have suffered from hot and dry conditions and private crop estimates are dropping enough to take away the threat of a new record soybean crop for Brazil in early 2019. We don't, however, see much bullish response in prices yet, either in Brazil or the U.S. and will continue to monitor. For now, the trend in cash soybean prices is sideways with a bearish fundamental outlook and more uncertainty than usual, due to trade negotiations with China. DTN's National Soybean Index closed at $8.00 Monday, down from its highest level in four months and $0.95 below the March contract. Among January contracts early Monday, there were 721 delivery intentions for soybeans, 264 for meal and 1,299 for soybean oil.

Wheat:

March K.C. wheat fell 7-1/4 cents to $4.88 3/4 Monday, finishing the year within seven cents of its 2018 low, while potential buyers find no reason to be in a hurry securing U.S. wheat supplies. Total wheat export commitments before the government shutdown were down 12% from a year ago and there is little reason to believe much has changed since then. Earlier Monday, USDA said 13.8 million bushels of wheat were inspected for export last week, putting total inspections down 13% in 2018-19 from a year ago. U.S. wheat prices still have a few months to see possible demand benefits before production starts to get talked about in the Northern Hemisphere. Russia's encroachment into Ukraine is also a simmering concern, but on the final day of 2018, there are no pressing bullish arguments for wheat. 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 $4.68 Friday, down from a three-month high and 28 cents below the March contract. DTN's National SRW Index closed at $4.84 Friday, 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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