DTN Closing Grain Comments

General Comments:

Corn was up 8 1/4 cents in the May contract and up 7 1/2 cents in the December. Soybeans were up 16 cents in the May contract and up 14 cents in the November. Wheat closed up 13 1/4 cents in the May Chicago contract, up 13 3/4 cents in the May Kansas City and up 11 1/4 cents in the May Minneapolis contract. The March U.S. dollar index is up 0.45 at 101.57. April gold is down $4.70 at $1,249.20 while May silver is up 1 cent and May copper is up $0.0195. The Dow Jones Industrial Average is up 308 at 21,120. April crude oil is down $0.03 at $53.98. April heating oil is down $0.0105 while April RBOB gasoline is down $0.0468 and April natural gas is up $0.017.

Corn:

May corn closed up 8 1/4 cents Wednesday, still supported by the anticipation of expanded E15 sales even though the White House denied a new executive order is in the works. Tuesday's rumor rescued corn prices just as they were making a new three-week low and kept the uptrend intact for the time being. Brazil's second season of corn planting is off to a good start, but may be slowed by wet conditions in central Brazil this week. Corn's main support continues to come from the demand side of the market, and Wednesday, the U.S. Energy Information Administration said last week's ethanol production was unchanged from the previous week at 1.034 million barrels per day. Exports are also expected to make a good showing in Thursday's weekly sales report with U.S. FOB corn prices roughly 40 cents a bushel cheaper than their counterparts in Brazil. It is also a bullish clue for corn demand that March corn has not received any delivery notices yet. May corn continues to trend gradually higher. DTN's National Corn Index closed at $3.31 Tuesday, priced 43 cents below the May contract and down from its highest price in seven months. In outside markets, the March U.S. dollar index is up 0.45 with recent comments from Federal Reserve officials suggesting a rate hike is being seriously considered at the next meeting in mid-March. Widespread reports of expanded manufacturing activity around the globe Wednesday also added weight to the argument that the economy is ready for a higher interest rate.

Soybeans:

May soybeans closed 16 cents higher Wednesday, supported by a 2.2% overnight gain in palm oil futures and another higher close in May soybean oil, ending up 0.81. Palm oil's rebound comes at a time when there is increased talk of a return of El Nino by the summer of 2017 (see Wednesday's DTN article by Meteorologist Mike Palmerino, "Australians Increase Chances of El Nino") -- the pattern that is known for threatening Indonesia and Malaysia with drought. Here in the U.S., soybean oil continues to find support from unconfirmed talk of a possible change in the application of future biodiesel tax credits, which would cut out imported products. This week's reports of soybean trucks bogged down in mud as they head northward out of Mato Grosso have also given soybean prices a lift. With no follow-through seen yet on last week's new six-week low, May soybeans are holding a sideways trading range. DTN's National Soybean Index closed at $9.53 Tuesday, priced 83 cents below the May contract and near its six-week low. Early Wednesday, there were 844 delivery notices for March soybean oil, 253 for March meal, and 565 for March soybeans.

Wheat:

May Chicago wheat closed 13 1/4 cents higher Wednesday with commercial buying seen in the May and July contracts, but not in March where another 719 contracts were notified of delivery early Wednesday. This is odd behavior for wheat, but it seems to reflect concern about the current stretch of dry weather in the southwestern Plains and what that may lead to at harvest time. May Kansas City wheat also confirmed that with a 13 3/4-cent gain Wednesday. DTN's seven-day forecast remains mostly dry for the region with warmer temperatures returning this weekend. Outside of the U.S., it is too early to assess crops, but no major problems are in view. Technically, May Chicago wheat remains in an uptrend without a strong fundamental argument and is bullish enough to ignore steady gains in the U.S. dollar index. DTN's National SRW index closed at $3.96 Tuesday, priced 48 cents below the May contract and down from its highest price in seven months. DTN's National HRW index closed at $3.62 and down from its highest price in seven months. Early Wednesday, there were 142 deliveries of March K.C. wheat and 719 of March Chicago wheat.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

(ES)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.