DTN Closing Grain Comments

General Comments:

May corn closed up 1/4 cent per bushel and December corn was up 1/4 cent. May soybeans closed up 2 cents and November soybeans were up 2 cents. May K.C. wheat closed up 8 1/4 cents, May Chicago wheat was up 8 1/4 cents and May Minneapolis wheat was up 6 1/4 cents.

The June U.S. dollar index is trading down 0.466 at 95.365. The Dow Jones Industrial Average is down 22.84 points at 25,864.54. April gold is up $8.60 at $1,315.10, May silver is up $0.13 at $15.51 and May copper is up $0.0145 at $2.9375. May crude oil is up $0.83 at $60.12, April heating oil is up $0.0126, May RBOB is up $0.0221 and April natural gas is down $0.055.

Corn:

May corn ended up a quarter-cent at $3.71 1/2 Wednesday on lower volume, another day of quiet trading as the calendar turns to spring. Looking at a chart of corn prices, there is no evidence of concern about recent flooding in the Western Corn Belt, but that does not mean the situation will not affect corn prices at some point this year. We have yet to learn what impact there will eventually be on planting or how much stored grain has been lost. Earlier Wednesday, USDA said ethanol production stayed roughly steady last week at 1.004 million barrels per day while ethanol inventory hit a new record high of 24.4 million barrels. Given the flooding disruption in the Western Corn Belt, it is surprising that last week's production pace held steady. Transportation around several plants could be a problem for several weeks or longer. The main bearish pressure on corn prices continues to come from the anticipation of larger corn crops from South America. Wednesday marked the seventh session that USDA had no daily export sale announced for any crop. Fundamentally, the outlook for corn prices is neutral. Technically, the trend in cash corn is sideways with some support from commercial net longs. DTN's National Corn Index closed at $3.43 Tuesday, priced 28 cents below the May contract and up from its lowest price in over three months. In outside markets, the June U.S. dollar index is down 0.47 after the Federal Reserve kept the federal funds rate target unchanged at 2.25% to 2.50%, as expected. The Fed statement said, "The Committee will be patient as it determines future adjustments..."

Soybeans:

May soybeans was up 2 cents at $9.06 Wednesday, also a day of quiet trading while rumors continue to swirl around trade talks with China. Dow Jones reported late Tuesday that U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer will travel to Beijing next week, in an effort to secure an agreement with Chinese officials. As far as the market is concerned, we have heard this before and prices have become somewhat numb to the news, holding in a narrow, sideways range. If an agreement were reached, it would help take the edge off of bearish concerns, but the U.S. would still be facing large ending soybean supplies in 2018-19. China could help relieve some of the surplus with near-term purchases, but so far, this is all speculation, and the level of uncertainty remains wide. Without a trade agreement with China, the road for U.S. soybean prices is clearly bearish so much is riding on these talks. The other topic of interest for soybean demand lately is the spread of African swine fever in Asia. July hogs closed limit up at $93.07 Wednesday, the highest July close in four years. So far, May soybean meal remains well above support at $300.00 and was up 80 cents Wednesday at $311.60. For now, the trend in cash soybeans remains sideways. DTN's National Soybean Index closed at $8.18 Tuesday, priced 86 cents below the May contract.

Wheat:

May Kansas City wheat closed up 8 1/4 cents Wednesday at $4.44, a decent show of support for K.C. wheat prices near their lowest level in a year with help from the Federal Reserve's dovish comments about interest rates. Tuesday's news that Brazil's President Bolsonaro agreed to allow 750,000 metric tons (mt) (28 million bushels) of duty-free U.S. wheat imports helped give HRW wheat prices a lift Wednesday. Otherwise, there hasn't been much bullish to say about winter wheat prices lately other than they have gotten cheap enough to attract commercial support. The more bullish argument is found in spring wheat where exports are up 15% from a year ago and commercial net-longs have helped keep May Minneapolis prices above $5.50. This week's warmer temperatures in the U.S. Northern Plains are expected to eventually bring flooding to the Dakotas and parts of Minnesota. Outside the U.S., most major wheat areas other than Australia are reporting favorable early conditions. With U.S. wheat supplies plentiful and HRW wheat exports sluggish, the trends in cash HRW and SRW wheat remain down, while the trend in cash HRS wheat is holding sideways. DTN's National HRW index closed at $4.19 Tuesday, 17 cents under the May contract and up from its lowest prices in a year. DTN's National SRW index closed at $4.31, also up from its lowest prices in a year.

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

Follow him on Twitter @ToddHultman

(CZ)

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