DTN Closing Grain Comments

General Comments:

Corn closed down 2 1/2 cents in the March contract and down 2 1/2 cents in the July. Soybeans were up 1 1/4 cents in the January contract and up 2 1/4 cents in the July. Wheat closed down 5 3/4 cents in the March Chicago contract, down 5 cents in the March Kansas City, and down 5 cents in the March Minneapolis contract.

The December U.S. dollar index is down 0.25 at 100.28. February gold is up $6.90 at $1,177.00 while March silver is up $0.43 and March copper is down $0.0300. The Dow Jones Industrial Average is up 255 at 19,507. January crude oil is down $0.60 at $50.33. January heating oil is down $0.0048 while January RBOB gasoline is down $0.0144 and January natural gas is up $0.013.

Corn:

March corn ended 2 1/2 cents lower Wednesday on light trading volume. USDA's WASDE report on Friday should show an increase in the corn export estimate, but that could also be more than offset by an increase in the crop estimate for Brazil. Overall, December WASDE reports are usually low key and no big surprises are expected. The U.S. Energy Department said last week's ethanol production increased from 1,012,000 to 1,023,000 barrels per day while inventory inched up .1 to 18.5 million barrels. After Tuesday's report showed October had the most monthly ethanol exports in five years, ethanol continues to be a bright spot for corn demand in 2016-17. March corn continues to trade within a sideways range between $3.42 and $3.69. DTN's National Corn Index closed at $3.17 Tuesday, priced 43 cents below the March contract and at its highest price in four months. For now, 6,480 contracts of December corn remain open and there have still been no deliveries with expiration set for Dec. 14. In outside markets, most commodities were lower, but the S&P 500 is on track for a new record high, trading up 21.20.

Soybeans:

January soybeans closed a penny higher in a quiet day of trading, just two days before USDA's next WASDE report will be released. Dow Jones survey of analysts expects a slight reduction in USDA's estimate of U.S. ending stocks, from 480 million bushels to 472 mb, but frankly, a lower estimate is warranted given this season's increased export activity. Early Wednesday, USDA added to those numbers, saying 2.4 mb (66,000 metric tons) of U.S. soybeans were sold to China and 5.0 mb (136,000 mt) were sold to unknown, both for 2016-17. Another 10.4 mb (284,000 mt) were also sold to China for 2017-18. February palm oil was down 1.3% overnight, but January soybean oil closed up .38 at a new high for the contract. January soybeans continue to trend higher with persistent support from export demand. DTN's National Soybean Index closed at $9.76 Tuesday, priced 72 cents below the January contract and near its highest price in three months. There were 394 deliveries of December soybean oil early Wednesday but none for meal.

Wheat:

March Chicago wheat closed down 5 3/4 cents Wednesday, headed back toward its contract low with nothing happening to support prices. The closest thing to a bullish concern for wheat is the combination of dry conditions in the southwestern Plains and sub-freezing temperatures reaching as far south as central Texas this week. The problem is that with so much other wheat available, traders aren't apt to pay much attention to any problems this winter until crops can be assessed in the spring. Higher crop estimates from Australia and Canada this week may not make it into Friday's WASDE report, but are still being felt in wheat's depressed prices. March Chicago wheat continues to slug along near its lowest spot prices in 10 years. See Wednesday's article "When not to Make a Trade" by DTN contributing analyst Elaine Kub for a good discussion of wheat's current prices. DTN's National SRW index closed at $3.54 Tuesday, priced 52 cents below the March contract and still near its lowest cash prices in seven years. DTN's National HRW index closed at $2.98, near its lowest prices in 11 years. There were 10 deliveries of December Chicago wheat, 24 deliveries of K.C., and 46 Minneapolis reported early Wednesday. Only 68 contracts of December K.C. wheat remained open as of Wednesday morning.

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

Follow Todd Hultman on Twitter @ToddHultman1

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