DTN Closing Grain Comments

General Comments:

Corn was down 5 1/2 cents in the March contract and down 5 1/2 cents in the December. Soybeans were down 11 1/4 cents in the March contract and down 9 cent in the November. Wheat closed down 2 1/2 cents in the May Chicago contract, up 1/4 cent in the May Kansas City and up 1 cent in the May Minneapolis contract.

The March U.S. dollar index is down 0.14 at 101.05. April gold is up $17.30 at $1,250.60 while March silver is up 20 cents and March copper is down $0.0880. The Dow Jones Industrial Average is up 46 at 20,822. April crude oil is up $0.72 at $54.31. April heating oil is up $0.0216 while April RBOB gasoline is up $0.0061 and April natural gas is up $0.036.

Corn:

May corn closed down 5 3/4 cents Thursday, pressured by a continuation of favorable crop weather in South America and a new 93 million metric ton corn crop estimate from Brazil's private analyst, AgroConsult. If true, Brazil's corn crop would be up 39% from a year ago and would become a tough source of competition for the U.S. this summer. As things currently stand, FOB corn prices in the U.S. are roughly 30 cents a bushel cheaper than in Brazil, so there is still time for the U.S. to capture more export business. USDA's annual two-day Ag Outlook Forum kicked off early Thursday with a corn planting estimate of 90.0 million acres and an average price estimate of $3.50 a bushel for 2017. While the planting estimate may be a little low, neither could be called a surprise, and prices showed no response when the numbers were released. In spite of a lower close, May corn remains in a gradual uptrend with the clock ticking on South America's approaching harvests. DTN's National Corn Index closed at $3.35 Wednesday, priced 36 cents below the March contract and down from its highest price in seven months. In outside markets, the March U.S. dollar index is down 0.14 while gold and crude oil prices are holding modestly higher.

Soybeans:

May soybeans closed down 11 cents Thursday, falling to its lowest close in six weeks after reports of AgroConsult's new bearish estimates were widely circulated. The Brazilian firm estimated Brazil's new soybean crop at 107.8 mmt or nearly 4.0 billion bushels. While this is a new high among recent estimates, it is not out of reason as DTN has been reporting on Brazil's favorable crop weather for months. The week ahead also remains favorable for further harvest progress with light to moderate rain amounts broadly anticipated. USDA added its own bearish planting estimate of 88.0 ma Thursday, but the average cash soybean price estimate of $9.60 a bushel was actually neutral, roughly 20 cents above the current price of DTN's National Soybean Index. While Brazil's harvest is showing steady progress, May soybeans are under bearish pressure and the short-term trend has turned lower. DTN's National Soybean Index closed at $9.49 Wednesday, priced 74 cents below the March contract and down from its highest price in six months.

Wheat:

May Chicago wheat closed down 2 1/2 cents while Kansas City wheat was up a quarter-cent -- a steady to lower day while the U.S. winter wheat crop faces stress from cold temperatures this weekend. After several days of temperatures in the 70s and 80s in the southwestern Plains, young wheat plants are about to get hit with temperatures in the teens as far south as the Texas Panhandle on Saturday morning. It is difficult to get too bullish about this threat, knowing that wheat has survived similar situations before, but it has generated more noncommercial short-covering and helped to interrupt last week's downward slide in prices. Early Thursday, USDA predicted all wheat plantings will be down 8% in 2017-18 to a record low 46.0 ma and wheat prices will average $4.30 a bushel. The price estimate sounds slightly optimistic this early in the season and will depend on not having a fifth consecutive year of good weather around the globe. In spite of heavy U.S. wheat supplies, May Chicago wheat remains in an uptrend. DTN's National SRW index closed at $4.05 Wednesday, priced 36 cents below the March contract and down from its highest price in seven months. DTN's National HRW index closed at $3.67 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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