DTN Closing Grain Comments

Soybeans Recapture Most of Friday's Losses

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was down 1 1/2 cents in the March contract and down 3/4 cent in the December. Soybeans were up 9 cents in the March contract and up 7 1/4 cents in the November. Wheat closed down 7 3/4 cents in the March Chicago contract, down 4 3/4 cents in the March Kansas City, and down 3 cents in the March Minneapolis contract.

The March U.S. dollar index is up 0.08 at 99.92. April gold is up $13.00 at $1,233.80 while March silver is up 24 cents and March copper is up $0.0355. The Dow Jones Industrial Average is down 25 at 20,046. March crude oil is down $0.76 at $53.07. March heating oil is down $0.0251 while March RBOB gasoline is down $0.0428 and March natural gas is down $0.004.

Corn:

March corn closed down 1 1/2 cents Monday, unable to hold on to an early gain after Buenos Aires, Argentina received heavy rain amounts over the weekend and parts of north-central Argentina saw a return of flooding concerns. Corn prices seem mostly numb to Argentina's concerns, especially with Brazil showing a possible record crop ahead. Friday's CFTC data showed noncommercial traders still modestly bullish in corn with 97,023 contracts net short as of Jan. 31, down 9,714 from the previous week. Fundamentally speaking, it is difficult to make a bullish argument for higher corn prices while supplies are plentiful, but March corn continues to trend gradually higher with five months to go before Brazil's new exports typically begin. Monday's weekly inspections report from USDA showed 43.8 million bushels of corn inspected last week, putting the 2016-17 total up 77% from a year ago. DTN's National Corn Index closed at $3.29 Friday, priced 36 cents below the March contract and near its highest price in seven months. In outside markets, the March U.S. dollar index is up 0.08, finding modest support after European Central Bank President Mario Draghi said Europe continues to need monetary stimulus, reported RTTNews.com.

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Soybeans:

March soybeans closed up 9 cents Monday with a boost from more rain in Argentina over the weekend, but were also down 6 1/2 cents from their high as concerns about Argentina don't pace the same punch they did a few weeks ago while Brazil's crops look on track for records in both corn and soybeans. Dow Jones' survey of analysts expects USDA to increase its soybean crop estimate for Brazil from 104.0 million metric tons to 104.1 mmt, but other private sources have already estimated as high as 107.0 mmt. According to private consultant, Safras & Mercado, Brazil's soybean harvest was 10% complete on Friday, making steady progress. On the other hand, soybean demand continues to do well. USDA said Monday morning that 60.1 million bushels of soybeans were inspected last week, a bullish amount with no drop shown during China's New Year. Friday's CFTC data showed noncommercial traders still bullish in soybeans with 168,449 net longs as of Jan. 31, down 12,562 from the previous week. It is fair to wonder if traders will continue to hold long while Brazil's harvest comes in. So far, March soybeans remain in a tug of war with prices near the middle of their two-month trading range and support holding at the January low of $9.93. DTN's National Soybean Index closed at $9.51 Friday, priced 76 cents below the March contract and down roughly 50 cents from its highest price in six months.

Wheat:

March Chicago wheat closed down 7 3/4 cents, pressured by Monday's rebound in the U.S. dollar index and a chance for rain in the extended forecast for the southwestern Plains. This week's weather is expected to stay mostly dry in the region with temperatures hitting the 80s by the end of the week. Friday's CFTC data showed noncommercial traders increased their bearish holdings from 58,258 to 64,074 contracts net short as of Jan. 31. Commercials on the other hand, increased net longs to 60,500 and probably lifted some of those later in the week as prices traded higher. In spite of Monday's lower close, March Chicago wheat continues to trend gradually higher with resistance holding so far at $4.38. DTN's National SRW index closed at $3.92 Friday, priced 38 cents below the March contract and down from its highest price in six months. DTN's National HRW index closed at $3.48 and down from its highest price in seven months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman