DTN Closing Grain Comments

By Darin Newsom
DTN Analyst

General Comments:

March corn was up 9 1/4 cents at $3.55 with new-crop December 2017 8 cents higher at $3.84 1/4. March soybeans finished 26 3/4 cents higher at $10.24 1/4 with new-crop November 2017 up 21 1/4 cents to $10.02 1/2. March Chicago wheat closed 16 cents higher at $4.09 1/2, March Kansas City gained 12 1/2 cents to $4.18 3/4, and March Minneapolis added 6 3/4 cents to close at $5.37 1/2. The U.S. dollar index was 0.07 higher at 103.03. February gold was $5.60 higher at $1,139.20 while March silver was $0.236 higher and March copper rallied $0.0395. The Dow Jones Industrial Average gained 31 points to 19,965. February crude oil was up $1.00 at $54.02. The January distillates (heating oil) contract was $0.0367 higher, January RBOB gasoline gained $0.0363, and January natural gas added $0.109.

Corn:

Corn posted a solid rally Tuesday, due in part to spillover buying interest from soybeans. Technically both old-crop March and new-crop December rallied off last week's tests of price support, maintaining sideways trading patterns on weekly charts. Fundamentally, the market received some bullish news with a solid 38.2 mb of weekly export inspections (for the week ending Thursday, Dec. 22). More impressive is that fact marketing-year total inspections continue to run 80% ahead of last year as compared to USDA's December projection of a 17% year-to-year increase. Given the strength of Tuesday's rally, it wouldn't be overly surprising to see light selling emerge early in the overnight session.

Soybeans:

Both old-crop and new-crop markets posted strong 20-cent plus rallies as commercial buying returned after taking a few weeks off. The carry in the old-crop forward curve weakened, discounting the soon to be in delivery January contract. This goes along with the idea demand remains strong for U.S. supplies, a factor confirmed with another bullish 62.8 mb weekly inspection figure (for the week ending Thursday, Dec. 22). Technically, the more active March contract is already retraced about 1/3 of its previous short-term downtrend that began with its high of $10.74 (Nov. 28). As with corn, Tuesday's sharp rally could lead to a small pullback early in the overnight session. However, traders will continue to debate whether southern Argentina has received enough rain to stabilize that area's crop.

Wheat:

Both winter wheat markets posted strong rallies Tuesday, supported by spillover buying from soybeans and corn. This week's early rally makes last week's move to new contract lows look like a classic wheat head fake, though some renewed selling interest could be seen overnight. Fundamentally, weekly export inspections (for the week ending Thursday, Dec. 22) could still be viewed as bullish, with marketing year totals running 28% ahead of last year as compared to USDA's December projection of a 26% year-to-year increase.

Darin Newsom can be reached at darin.newsom@dtn.com

Follow Darin Newsom on Twitter @DarinNewsom

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