DTN Closing Grain Comments

General Comments:

General Comments:
March corn settled up 3 1/4 cents per bushel, while December corn was up 2 1/2 cents. March soybeans closed up 9 1/4 cents, with new crop Nov beans up a hefty 7 3/4 cents. Chicago March wheat settled down 1 1/2 cents, Kansas City March was down 2 cents, and Minneapolis March wheat finished down 3/4 of a cent per bushel. The U.S. dollar index is down .7620 at 95.806. February gold is up $17.90 at $1297.70. March silver was up .400 at $15.6950. The Dow Jones average is up 154 points at 24,706. March crude oil is up 60 cents at $53.73 per barrel. March RBOB is $1.4054, up .0017. March heating oil is up .0059 at $1.8859.

For the week:

March corn closed down 1 1/2 cents and December 2019 corn was down 1/2 cent. March soybeans were up 8 1/2 cents, while November 2019 soybeans were also up 8 1/2 cents. March Kansas City wheat was up 3 cents, March Chicago wheat was up 2 1/4 cents, and March Minneapolis wheat was up just 1/2 cent per bushel.

Corn:

Corn futures traded sideways to higher in low volume, but surged later to a 3 1/4 cent higher finish. March corn is trading just above the intersection of the 20-, 50- and 100-day moving averages. Although U.S. corn is well priced to garner export business, the lack of a China solution and weeks without export sales data have sapped volatility from the trade and left corn without direction lately. A news story Friday that Sinograin has reduced their reserve stockpiles of corn by 100 mmt (3.936 billion bushels) did little to move the market early. However, many in the trade feel China's expected deficit of 26.5 mmt (1.046 billion bushels) of corn could result in a sharp pick-up in their corn imports. We certainly won't know for a while. Also underpinning the corn market is the expanding drought in some key areas of Brazil's safrinha corn region, especially Parana, which is the second largest safrinha producing state. Recent drought monitors have shown drought expanding in that area. There are a host of other importing countries looking to secure corn, and the U.S. is in the thick of the competition. Short-term support continues to be $3.76 to $3.77 on March with resistance in the $3.82 area, and then $3.85. Monday may give us more guidance as news from the next trade meeting are leaked, and news that a deal has been reached to open the government could give us a slew of export data to digest. DTN's National Corn Index closed at 3.46 on Thursday, and reflects an average basis of 31 under March.

Soybeans:

Soybeans had been mostly firmer, with March right at the 200-day moving average, then surged late day to finish over 9 cents higher as news of a deal to reopen the government for at least three weeks was released. Although many in the trade feel the downside potential for the Brazilian soy crop is limited from the 115 mmt area, weather continues to be a concern. Following projected weekend showers, it appears the detrimental hot and dry pattern reappears in some key growing regions. This, along with optimism as we approach Monday's trade talks, supported soybeans. The surge of March bean oil above its 200-day moving average as it heads for its sixth consecutive higher close is also a bullish input for the soy complex. The sharp increase in both soybean oil and palm oil usage for biodiesel has resulted in bullish moves in both markets lately. With the brutal cold wave in the U.S. projecting lows in Illinois of -15 to -20, barge freight has surged with few offers, and any major warming is not in the forecast through February. Basis values at the ports for soybeans have not been impressive, likely indicative of little new business. China is said to be buying Brazilian beans nearby at a sharp discount. Monday we could have more to trade on, as news from the trade talks begins to circulate, and export data can be released next week. Weather, China news and export sales data will drive the soy market next week. DTN's National Soybean Index closed at $8.26 on Thursday and is $0.90 below the March futures contract.

Wheat:

In two-sided and uneventful trade, wheat continues its mini-correction from the recent rally. Although the U.S. is said to be much cheaper than primary competitor Russia on an FOB basis, the market continues to trade on rumor rather than fact, in the absence of USDA data. That could all change next week as the government reopens. There are plenty of wheat tenders around, and the U.S. should be in the mix. The frigid temps expected to invade many key wheat areas in the middle of next week, have the trade on edge regarding possible wheat damage, but that will be tough to quantify. The rumors continue about China possibly buying from 3 mmt to 7 mmt (110 million to 257 million bushels) of U.S. wheat, it is just that -- a rumor. Sov Econ's increase of Russia's wheat exports on Thursday was a bit confusing in light of constant chatter about tightening stocks and internal controls. For some, that is no surprise as Sov Econ's 35.6 mmt is still lower than the 36.5 mmt to 37 mmt that other analysts are carrying. DTN's National HRW index closed at $4.87 on Thursday, and that is an average basis of 24 under Kansas City March futures, firmer.

Dana Mantini can be reached at dana.mantini@dtn.com

Follow Dana on Twitter @mantini_r

(CZ)

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