DTN Closing Grain Comments

General Comments:

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

The March U.S. dollar index is up 0.16 at 100.95. April gold is down $9.00 at $1,226.90 while March silver is down 9 cents and March copper is up $0.0205. The Dow Jones Industrial Average is up 159 at 20,429. March crude oil is down $1.04 at $52.82. March heating oil is down $0.0425 while March RBOB gasoline is down $0.0448 and March natural gas is up $0.080.

Corn:

March corn closed up a penny Monday, continuing to inch higher while the pace of demand is doing well. USDA said Monday morning that 49.4 million bushels of corn were inspected for export last week, a bullish amount that keeps the total up 77% in 2016-17 from a year ago. USDA also said 4.0 million bushels (101,600 mt) of U.S. corn were sold to unknown for 2016-17. Friday's new six-month high in March corn may have attracted more noncommercial buying and Friday's CFTC data showed noncommercial traders still moderately bullish in corn as with 117,182 contracts net long of Feb. 7, up 20,159 from the previous week. South America's next crops are the main bearish risk to prices, but new corn exports from down south are still several months away. In the meantime, March corn continues to trend gradually higher. DTN's National Corn Index closed at $3.37 Friday, priced 37 cents below the March contract and at its highest price in seven months. In outside markets, the March U.S. dollar index is up 0.16 and nearly all other commodities outside of grains and cotton are lower.

Soybeans:

March soybeans traded both sides Monday and finished down 4 3/4 cents, overcome by more bearish news about Brazil's soybean crop. On Friday, private consultant, Safras & Mercado, said 46% of the soybean harvest was complete in Mato Grosso. Safras added Monday that Brazil's Vegetable Oil Industry Association (ABIOVE) estimated Brazil's soybean crop at 104.6 mmt, a little more than USDA's 104.0 mmt. There seems to be no argument that Brazil's soybean crop is on track for a new record high and even Monday's weekly inspections report showed a drop from 60.1 to 42.1 million bushels last week. In spite of what appears to be an increasingly bearish situation, March soybean prices continue to trend gradually higher and noncommercials are staying bullish, so far. Friday's CFTC data showed noncommercial traders in soybeans holding 160,533 contracts net long as of Feb. 7, down 7,916 from the previous week. DTN's National Soybean Index closed at $9.83 Thursday, priced 76 cents below the March contract and down from its highest price in six months.

Wheat:

March Chicago wheat closed up 3 1/4 cents Monday, still supported by noncommercial short-covering, even though the southwestern Plains received beneficial moisture Monday with more expected in DTN's seven-day forecast. What is more concerning to wheat prices is the expected return of warmer temperatures after Wednesday, enticing winter crops out of dormancy two weeks before we even get to March. USDA reported 11.3 million bushels of wheat inspected for export last week, a bearish amount that doesn't put much confidence in USDA's new, higher export estimate of 1.025 billion bushels. Friday's CFTC data showed noncommercial traders in Chicago wheat still bearish with 51,899 contracts net short as of Feb. 7. The financial squeeze of those short positions are now a bullish factor in the latest wheat rally. Commercials, on the other hand, have been faithfully net long and are likely trimming back positions as prices climb higher. In spite of plentiful U.S. wheat supplies, March Chicago wheat continues to trend higher, correcting back to more normal valuations after finishing 2016 on an extremely bearish note. DTN's National SRW index closed at $4.12 Friday, priced 37 cents below the March contract and down from its highest price in six months. DTN's National HRW index closed at $3.69 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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