DTN Closing Grain Comments

General Comments:

Corn was up 8 1/2 cents in the March contract and up 9 cents in the December. Soybeans were up 12 1/4 cents in the March contract and up 11 cents in the November. Wheat closed up 13 cents in the March Chicago contract, up 11 cents in the March Kansas City, and up 7 1/4 cents in the March Minneapolis contract.

The March U.S. dollar index is up 0.24 at 99.72. April gold is down $2.70 at $1,207.70 while March silver is down $0.06 and March copper is down $0.0125. The Dow Jones Industrial Average is up 39 at 19,904. March crude oil is up $0.68 at $53.49. March heating oil is up $0.0315 while March RBOB gasoline is up $0.0175 and March natural gas is up $0.054.

Corn:

March corn closed up 8 1/2 cents Wednesday with ongoing support from increased demand in 2016-17 and chances for rain to return to central Argentina this week. Tuesday's report of Jan. 1 U.S. cattle inventory from USDA showed 93.6 million head, up 2% from a year ago and in line with expectations. Beef cows were up 3% from a year ago, suggesting more expansion ahead and more feed rations needed. The U.S. Energy Information Administration said last week's ethanol production increased from 1.051 to a new record high 1.061 million barrels per day while inventory increased from 21.7 to 21.9 million barrels. Increased ethanol production plus increased corn exports have helped to support corn prices since harvest and given the weaker-than-normal corn basis a small improvement. March corn is showing signs of emerging from its sideways trading range with a slight upward price trend coming out of January. DTN's National Corn Index closed at $3.24 Tuesday, priced 35 cents below the March contract and down from its highest price in six months. In outside markets, the March U.S. dollar index is up 0.24 after two pieces of economic news showed higher U.S. job growth and increased manufacturing activity in January. The Federal Reserve concluded Wednesday's meeting and kept rates unchanged, as expected.

Soybeans:

March soybeans closed up 12 1/4 cents, helped by noncommercial buying after USDA surprised markets early Wednesday with news of an 8.7 million bushel (236,700 mt) sale of U.S. soybeans to unknown destinations, 6.3 million bushels (170,700 mt) of which were for 2016-17. China is one of the suspected buyers even though the country was expected to sit this week out to celebrate its New Year. Brazil's advancing soybean harvest continues to provide bearish pressure on soybean prices and concerns about Argentina have eased, even though central Argentina is expecting more rain this week. If China was Wednesday's unnamed buyer, it would be a somewhat bullish sign of demand to think that they interrupted their holiday long enough to take advantage of soybeans' 50-cent drop over the past two weeks. In spite of Brazil's advancing harvest and bearish trade concerns, March soybeans continue to trade in the middle of a roughly sideways range. DTN's National Soybean Index closed at $9.49 Tuesday, priced 76 cents below the March contract and down over 50 cents from its highest price in six months.

Wheat:

March Chicago wheat closed 13 cents higher Wednesday, lifted a second consecutive day of commercial buying with concern of cold temperatures in Ukraine and southern Russia possibly damaging winter wheat crops. DTN's seven-day forecast for the southwestern Plains also continues to be mostly dry with the Climate Prediction Center now predicting above-normal temperatures and below-normal precipitation for the region in February. It is difficult to get too excited about weather concerns in early February, but it is hard to argue with wheat's rising price trend, especially with its strengthening basis and prices coming off their lowest levels in ten years. In addition, Associated Press reported a renewal of fighting in eastern Ukraine which likely makes bearish noncommercials nervous. As with corn, March Chicago wheat prices are trending higher and have a chance to take out resistance at the three-month high of $4.37 1/2. DTN's National SRW index closed at $3.84 Tuesday, priced 37 cents below the March contract and down from its highest price in five months. DTN's National HRW index closed at $3.39 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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