DTN Closing Grain Comments

K.C. Wheat Rebounds While Soybeans Sag Lower

Todd Hultman , DTN Grains Analyst
(DTN illustration by Nick Scalise)

General Comments:

Corn was up 1 3/4 cents in the March contract and up 1 1/2 cents in the December. Soybeans were down 3 1/2 cents in the March contract and down 1 cent in the November. Wheat closed up 6 1/4 cents in the May Chicago contract, up 5 3/4 cents in the May Kansas City, and up 3 cents in the May Minneapolis contract. The March U.S. dollar index is down 0.10 at 101.25. April gold is down $0.50 at $1,238.40 while March silver is down 1 cent and March copper is down $0.0115. The Dow Jones Industrial Average is up 11 at 20,754. April crude oil is down $0.71 at $53.62. April heating oil is down $0.0152 while April RBOB gasoline is up $0.0104 and April natural gas is down $0.004.

Corn:

May corn closed up 1 3/4 cents Wednesday, supported by light commercial buying as the demand side of the market continues to help prices inch higher. There was some confusion at 8 a.m. CST when a corn sale was incorrectly reported over a major newswire. USDA actually announced a cancellation of 5.4 million bushels (136,000 metric tons) of optional origin corn previously sold to South Korea for 2016-17. By the time markets re-opened at 8:30 a.m., prices showed little concern and kept their turtle-like pace throughout the day. USDA's annual outlook forum starts Thursday with grain outlook presentations scheduled for Friday morning. USDA's estimates always draw curiosity, but have too much uncertainty in February to offer much price impact. With plenty to learn yet in 2017, May corn continues to trend gradually higher. DTN's National Corn Index closed at $3.33 Monday, priced 37 cents below the March contract and down from its highest price in seven months. In outside markets, April crude oil is down 74 cents a barrel while other commodities are mixed and the March U.S. dollar index is down 0.10.

Soybeans:

May soybeans closed down 3 3/4 cents, a fourth consecutive day lower with light noncommercial liquidation. DTN's seven-day forecast expects light to moderate rain amounts in Mato Grosso while the rest of Brazil is mostly dry, favorable for harvest progress. With Brazil's soybean harvest making good progress and no significant weather threats in the forecast, soybean prices are sagging lower and getting close to testing support. With many expecting a higher soybean planting in the U.S. this spring, Friday's estimates from USDA will likely take on a bearish interpretation, even if USDA is slow to increase its acreage estimate. What is not well-known yet is the level of soybean demand, and the uncertainty is helping keep May soybeans above the support of its February low at $10.27. DTN's National Soybean Index closed at $9.53 Monday, priced 73 cents below the March contract and down from its highest price in six months.

Wheat:

May Chicago wheat closed up 6 1/4 cents with more noncommercial liquidation seen as winter wheat areas enjoyed another day of warm, February weather. Friday into the weekend is expected to bring a return of sub-freezing temperatures as far south as the Texas Panhandle and some damage to winter wheat may occur. Wheat is hardy and has survived worse, but it will be difficult to assess this year's winter crop until warmer weather returns. Outside the U.S., southern Russia may have suffered some winter damage, but it is too early to tell and there are no significant threats being currently reported. Technically, May Chicago wheat remains in an uptrend, but it may be difficult to push much higher until more is known about 2017's winter crops. DTN's National SRW index closed at $4.01 Monday, priced 35 cents below the March contract and down from its highest price in seven months. DTN's National HRW index closed at $3.61 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

(BAS)