DTN Closing Grain Comments

General Comments:

Corn was down 6 1/4 cents in the March contract and down 5 cents in the December. Soybeans were up 3/4 cent in the March contract and up 3/4 cent in the November. Wheat closed down 6 1/2 cents in the March Chicago contract, down 3 cents in the March Kansas City, and down 3 1/2 cents in the March Minneapolis contract.

The March U.S. dollar index is up 0.18 at 100.31. February gold is down $7.80 at $1,207.80 while March silver is down $0.08 and March copper is up $0.0605. The Dow Jones Industrial Average is up 130 at 19,930. March crude oil is up $0.58 at $53.33. March heating oil is up $0.0134 while March RBOB gasoline is up $0.0155 and March natural gas is up $0.036.

Corn:

March corn closed 6 1/4 cents lower Tuesday, knocked down from their highest level in six months by commercial selling, but only attracting a little higher volume. USDA's early news that 4.9 million bushels (125,000 mt) of U.S. corn were sold to unknown for 2016-17 carried little weight Tuesday as prices sold lower shortly after the 8:30 a.m. CST open and never looked back. In spite of the session's lower trade, there is no obvious bearish concern for corn as last fall's harvest is well-known and Brazil's export season for corn is still five months away. Current corn prices should still be able to count on support from this season's increased demand, especially from exports and ethanol production. Informa Economics also reinforced expectations that corn plantings will be lower this spring, estimated at 90.5 million acres. Using last year's yield of 174.6 bushels an acre would produce a 14.6 billion bushel crop, enough to keep supplies close to current levels, but there are a lot of "ifs" this early in the game. March corn continues to trend slowly higher and with resistance at its six-month high. DTN's National Corn Index closed at $3.34 Monday, priced 36 cents below the March contract and its highest price in six months. In outside markets, the March U.S. dollar index is up 0.18 and other commodities were mixed.

Soybeans:

March soybeans finished up 3/4 cent Tuesday, ending a three-day slide that took prices down from last week's new six-month high. USDA did report soybean export sales of 10.1 million bushels (275,000 mt) to a combination of Mexico and unknown, 5.3 million bushels (145,000 mt) of which were for 2016-17. There are two obvious reasons to be bearish soybean prices at this time of year. One is that Brazil's soybean crop is doing well by all reports and we are just weeks away from the time when their exports typically pick up. The other is that many are expecting increased soybean acres and on that front, Informa Economics estimated soybean plantings at 88.6 million acres Tuesday, up from last year's 83.4 million. In the face of those bearish concerns, soybean prices got a lift last week from reports of flooding in Argentina which have eased since. So far, March soybeans remain in an uptrend with plenty of bearish risk in the year ahead. DTN's National Soybean Index closed at $9.81 Monday, priced 77 cents below the March contract and down from its highest price in six months.

Wheat:

March Chicago wheat closed 6 1/2 cents lower Tuesday, influenced by corn, but also attracting light commercial selling after Monday's modest gain took prices close to their highest level in three months. Tuesday's weather map shows a winter storm crossing South Dakota, Nebraska, and Iowa, but winter wheat areas are expected to stay drier with warm temperatures and windy conditions in the southern Plains. With current U.S. wheat supplies plentiful, it remains difficult for prices to spark too much of a rally, but January's higher prices have eased wheat's bearish tone and should be able to trade roughly sideways until more is known about crops in the spring. DTN's National SRW index closed at $3.94 Monday, priced 39 cents below the March contract and at its highest price in five months. DTN's National HRW index closed at $3.51 and down from 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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