DTN Closing Grain Comments

General Comments:

Corn closed down 1 1/2 cents in the March contract and down 3/4 cent in the December. Soybeans closed up 2 cents in the March and up 2 1/2 cents in the November. Wheat closed down 5 1/2 cents in the May Chicago, down 4 1/2 cents in the May Kansas City, and up 1/2 cent in the May Minneapolis.

The March U.S. dollar index is down 0.01 at 101.04. April gold is up $6.70 at $1,258.10 while March silver is up $0.22 and May copper is up $0.0290. The Dow Jones Industrial Average is down 51 at 20,759. April crude oil is down $0.45 at $54.00. April heating oil is down $0.0175, April RBOB gasoline is down $0.0090, and April natural gas is up $0.008.

For the week:

March corn closed down 4 1/4 cents and December closed down 3 1/4 cents. March soybeans were down 19 cents while the November was down 11 1/4 cents. May Chicago wheat was down 7 1/2 cents, May Kansas City wheat was down 2 1/4 cents, and May Minneapolis wheat was down 3/4 cent.

Corn:

May corn closed down 1 3/4 cents Friday and was down 4 1/4 cents on the week, pulling back from last week's new seven month high with concerns about the slow approach of big corn crops in South America. FOB corn prices are 45 cents cheaper in the U.S. than in Brazil so export business continues to favor the U.S. and we saw another bullish week in USDA's weekly sales data. USDA said last week's export sales and shipments of corn totaled 29.3 and 47.5 million bushels respectively, putting total exports up 66% in 2016-17 from a year ago. Early Friday, USDA set out their predictions for 2017-18, pegging U.S. ending corn stocks at 2.215 billion bushels, down slightly from the current estimate of 2.320 billion bushels for 2016-2017. On its face, the estimate looks neutral, but as usual, it all comes down to weather with the early yield estimate put at 170.7 bushels an acre. Technically, the trend in May corn remains gradually higher, but may be losing momentum. DTN's National Corn Index closed at $3.29 Thursday, priced 36 cents below the March contract and down from its highest price in seven months. Outside markets were quiet Friday with the March U.S. dollar index trading down 0.01 and April crude oil down 45 cents a barrel.

Soybeans:

May soybeans closed up 1 3/4 cents Friday but were down 19 cents on the week, pressured by the steady advance of Brazil's soybean harvest, now over 30% done after the private firm, Safras & Mercado, estimated 66% completion in Mato Grosso. Early Friday, USDA estimated U.S. ending soybean stocks in 2017-18 will stay unchanged from the current season's estimate of 420 million bushels. Of course, there are a lot of unknown variables yet to discover, which give Friday's estimate a large margin of error, but the early guess starts out neutral. On a more practical note, USDA said last week's export sales and shipments of soybeans totaled 15.2 mb and 38.7 mb respectively, bullish amounts that put total exports up 16% in 2016-17 from a year ago. Even so, U.S. export sales are slowly declining as Brazil's soybeans come in. That harvest pressure showed up this week as prices fell for a second consecutive week and turned the trend in May soybeans lower. DTN's National Soybean Index closed at $9.38 Thursday, priced 74 cents below the March contract and at a new six-week low.

Wheat:

May Chicago wheat closed down 5 1/2 cents Friday and was down 7 1/2 cents on the week as another example of the old adage "buy the rumor and sell the fact" proved out. After several days of warmer weather in the southwestern Plains, this weekend's temperatures are expected to dip into the teens as far south as the Texas Panhandle, offering a new threat to young winter wheat crops. The anticipation pushed wheat prices higher last week but saw Friday's prices drop to their lowest level in two weeks as the short-covering rally lost its fuel. Early Friday, USDA estimated U.S. wheat stocks would drop from 1.14 billion bushels in 2016-17 to 905 mb in 2017-18, helped by the lowest planting on record of 46.0 million acres. If true, it offers wheat prices a slightly less bearish scenario, but the real numbers will depend on global weather. USDA also said last week's export sales and shipments of wheat totaled 16.6 mb and 23.1 mb respectively, a neutral showing that won't make a dent in wheat's current supplies. Technically, May Chicago wheat remains in an uptrend but lacks a fundamental reason to trade higher. DTN's National SRW index closed at $4.02 Thursday, 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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