DTN Closing Grain Comments

General Comments:

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

The March U.S. dollar index is up 0.26 at 101.21. April gold is up $2.90 at $1,228.70 while March silver is up 15 cents and March copper is down $0.0365. The Dow Jones Industrial Average is up 75 at 20,487. March crude oil is up $0.38 at $53.31. March heating oil is up $0.0120 while March RBOB gasoline is up $0.0064 and March natural gas is down $0.048.

Corn:

March corn closed down 1 1/4 cents Tuesday in a quiet day of trading that left prices near their highest level in over six months. The obvious bearish threat for corn prices early in 2017 is South America's crops, now in their equivalent of mid-August and looking very good so far. USDA's estimated total crop of 123 mmt for Brazil and Argentina is up a whopping 28% from a year ago and will eventually compete directly with the U.S. for customers. The good news for corn is that Brazil's exports don't normally pick up until July so there is still time to do business and, on Tuesday, USDA said a distant 9.0 million bushels (229,000 mt) of U.S. corn were sold to Japan for 2017-18. For now, March corn continues to trend gradually higher, having gained roughly 50 cents in just over five months. DTN's National Corn Index closed at $3.38 Monday, 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 0.26 after Fed Chair Yellen told the Senate Banking Committee that further rate hikes would be appropriate as long as the labor market continues to strengthen and inflation moves to 2%, reported RTTNews.com.

Soybeans:

March soybeans closed down 9 1/4 cents, pressured by noncommercial selling and Brazil's approaching harvest, widely anticipated to be a new record high. Fundamentally speaking, this is the time of year when U.S. soybean exports start to fall off while Brazil's business picks up and Monday's inspections report did show a drop in U.S. shipments last week, but U.S. soybeans are still moving. Early Tuesday, more business trickled in as USDA said 5.2 million bushels (142,500 mt) of U.S. soybeans were sold to Mexico for 2016-17. As if South America's crops weren't enough of a bearish threat, new-crop soybean prices are also facing the anticipation of an increased planting this spring, possibly as much as 89 million acres. These bearish issues are well-known and may come into play at some point this year, but so far March soybeans remain in a gradual uptrend, even with Tuesday's loss. DTN's National Soybean Index closed at $9.79 Monday, priced 76 cents below the March contract and down from its highest price in six months.

Wheat:

March Chicago wheat closed down 2 3/4 cents with a mix of mostly beneficial rain and snow working across the southern Plains. It should be noted however, that the precipitation stayed south of the Kansas border and that split in weather is expected to continue the next five days. Also pressuring prices on Tuesday, Australia's government (ABARES) estimated their wheat crop at a record high 35.1 mmt, higher than USDA's current 33.0 mmt estimate. The big winners in this year's early wheat rally continue to be cash winter wheat prices, now trading at their highest levels since June. This winter's weather threats have not been especially serious, but improved demand has finally helped to lift prices up from their multi-year lows. It is difficult to get too bullish about March Chicago wheat prices in February, but the trend remains clearly up for now. DTN's National SRW index closed at $4.15 Monday, priced 37 cents below the March contract and at its highest price in seven months. DTN's National HRW index closed at $3.76 and was at it 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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