DTN Closing Grain Comments

General Comments:

March corn closed down 4 3/4 cents per bushel and December corn was down 3 1/4 cents. March soybeans closed up 1 1/2 cents and November soybeans were up 1 cent. May K.C. wheat closed down 15 3/4 cents, May Chicago wheat was down 19 cents and May Minneapolis wheat was down 11 1/2 cents. The March U.S. dollar index is trading down 0.057 at 96.310. The Dow Jones Industrial Average is up 137.51 points at 26,169.32. April gold is down $3.30 at $1,329.50, March silver is down $0.06 at $15.86 and March copper is down $0.0025 at $2.9490. April crude oil is down $1.65 at $55.61, April heating oil is down $0.0461, April RBOB is down $0.0536 and April natural gas is up $0.064.

Corn:

May corn dropped 4 1/2 cents to $3.80 Monday, not benefitting from unconfirmed talk of possible purchases from China, especially as winter wheat prices fell to new contract lows. Earlier Monday, USDA announced 3.25 million bushels (mb) or 88,500 metric tons (mt) of U.S. corn were sold to Mexico for 2018-19 and another 7.0 mb (190,900 mt) for 2019-20. Weather reports from South America continue to look good for Brazil's safrinha corn crop with broad rain coverage expected this week. Argentina's crops are also in good shape with light to moderate rain amounts expected this week. USDA said 29.6 mb of corn were inspected last week, down from the previous week, but still enough to show total inspections up 38% from a year ago. More important for now, total corn export commitments are up 2% from a year ago, close to USDA's estimated export pace. Fundamentally and seasonally, cash corn prices should have a chance to keep working higher until early June, but DTN's Corn Index is currently showing difficulty trading above February's high of $3.52. DTN's National Corn Index closed at $3.49 Friday, 26 cents below the March contract. In outside markets, most commodities are trading lower and the March U.S. dollar index is down 0.06.

Soybeans:

May soybeans ended up 1 1/4 cents Monday at $9.25, a surprisingly slight response to Friday's news from USDA Secretary Sonny Perdue that China committed to buying 367 mb of U.S. soybeans and from Sunday's news that President Donald Trump was extending his tariff deadline beyond March 1, due to satisfactory progress in the trade talks with China. On the other hand, even with the new purchase, it is still not clear if U.S. soybean exports will reach USDA's 1.875 bb estimate in 2018-19 and some of the expectations for trade progress with China are probably already reflected in current prices. It seems safe to say Brazil's soybean crop will be a little lower this season. According to Dow Jones, the private consultant AgRural said Brazil's harvest was 45% complete and reported no harvest losses yet, even though some areas have been wet. This week's forecast remains favorable for crops in Argentina with light to moderate rain amounts expected. Fundamentally, the news is encouraging that the U.S. and China may be close to a new trade agreement, but the U.S. still has a large soybean surplus to contend with in 2019. For now, both cash and futures soybean prices remain in a sideways trend, staying shy of their eight-month highs. DTN's National Soybean Index closed at $8.25 Friday, 85 cents below the March contract.

Wheat:

May K.C. wheat fell 15 3/4 cents to $4.50 1/4 and May Chicago fell 19 cents Monday, new contract lows for both. In K.C. wheat, the drop was accompanied by a modest increase in trade volume, which does not yet suggest a widespread surrender of long positions. The July contract of K.C. wheat was down 14 3/4 cents, not as much as the May, but still showing early concerns about the prospects of a larger world wheat crop in 2019. The seven-day forecast for the southwestern U.S. Plains is mostly dry with increased rain chances in the southeastern U.S., closer to SRW wheat areas. Colder temperatures are expected to reach western Kansas next week, but traders are showing no concern about winter wheat crops yet. For now, the trends in cash HRW and SRW wheat are down, while the trend in cash HRS wheat remains sideways. DTN's National HRW Index closed at $4.39 Friday, 20 cents under the March contract and down from its highest prices in five months. DTN's National SRW Index closed at $4.62, down from its highest prices in six months.

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

Follow him on Twitter @ToddHultman

(CZ)

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