DTN Closing Grain Comments

General Comments:

Corn was up 7 cents in the March contract and up 6 1/4 cents in the December. Soybeans were up 23 cents in the March contract and up 1 1/2 cents in the November. Wheat closed up 7 1/2 cents in the March Chicago contract, up 3 cents in the March Kansas City, and down 16 1/4 cents in the March Minneapolis contract.

The March U.S. dollar index is down 0.82 at 100.37. February gold is up $18.00 at $1,214.20 while March silver is up $0.39 and March copper is down $0.0640. The Dow Jones Industrial Average is down 33 at 19,853. February crude oil is up $0.57 at $52.94. February heating oil is up $0.0176 while February RBOB gasoline is up $0.0118 and February natural gas is down $0.011.

Corn:

March corn finished up 7 cents at its highest close in 11 weeks, helped by news that north-central Argentina took on more rain over the weekend, adding to flooding concerns. Corn prices also got help from USDA's news that 4.1 million bushels (102,944 mt) of U.S. corn were sold to unknown destinations for 2016-17 and from Tuesday's lower trading in the U.S. dollar index. USDA also said Tuesday morning that 35.0 million bushels of corn were inspected for export last week, bullish enough to keep total inspections up 77% in 2016-17 from a year ago. Friday's CFTC data showed noncommercial traders leaning slightly bullish in corn with 43,021 contracts net long as of Jan. 10. Commercials were mostly neutral with 1,365 contracts net long, but hinting at good demand for last week's prices. Since USDA settled on a 2016 crop estimate of 15.15 billion bushels last week, March corn has turned higher and appears ready to let go of its sideways range. DTN's National Corn Index closed at $3.24 Friday, priced 35 cents below the March contract and near its highest price in over five months. In outside markets, February gold is up $18.00, in response to Tuesday's .8% drop in the March U.S. dollar index.

Soybeans:

March soybeans jumped up 23 cents to its highest close in six months after more rain in north-central Argentina added to flooding concerns over the weekend. Meanwhile, southern Argentina has been too dry and this week's forecast expects more dry weather and warmer temperatures ahead. Trading off of South America's changing weather can be volatile business, but weather concerns for Argentina, the world's largest meal exporter, appear legitimate with the March/May meal spread showing a $1.10 jump in price, thanks to increased commercial buying on Tuesday. Friday's CFTC data showed noncommercials still bullish in soybeans with 119,102 contracts net long as of Jan. 10. 51.8 million bushels of soybeans were inspected for export last week, bullish enough to keep total inspections up 17% in 2016-17 from a year ago. Tuesday's crush report from the National Oilseeds Processors was actually bearish for soybeans, showing a less-than-expected crush total of 160.2 million bushels for December and a higher-than-expected soybean oil inventory of 1.434 billion pounds. However, the report was no match for Tuesday's bullish weather concerns. March soybeans are trending higher once again, following Friday's bullish breakout in soybean meal. DTN's National Soybean Index closed at $9.74 Friday, priced 73 cents below the March contract and back near its highest price in four months.

Wheat:

March Chicago wheat closed 7 1/2 cents higher, getting a lift from corn and Tuesday's lower U.S. dollar. Given the latest rally in wheat prices, it wasn't surprising to see Friday's CFTC data showed short-covering among noncommercial traders, taking net shorts in Chicago wheat from 72,444 to 47,186 as of Jan. 10. Also not surprising, commercials took advantage of wheat's higher prices and reduced net-longs from 62,295 to 43,397. The southwestern Plains had broad coverage of rain and ice over the weekend which created travel and power problems, but is mostly considered beneficial for soil moisture. There will likely be problems to note when wheat re-emerges in the spring, but this current rally in wheat is more about re-balancing the bearish excesses of 2016. USDA said Tuesday that 12.7 million bushels of wheat were inspected for export last week, a neutral amount that has total inspections up 25% in 2016-17 from a year ago. There is no strong fundamental bullish argument for Chicago wheat prices, but they continue to show signs of trending higher after leaving behind a 10-year low in December. DTN's National SRW index closed at $3.87 Friday, priced 40 cents below the March contract and near its highest price in four months. DTN's National HRW index closed at $3.54 and at its highest price in six months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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