DTN Closing Grain Comments

General Comments:

Corn was down 5 1/4 cents in the May contract and down 4 1/2 cents in the December. Soybeans were down 10 3/4 cents in the May contract and down 5 3/4 cents in the November. Wheat closed down 3 cents in the May Chicago contract, down 3 1/2 cents in the May Kansas City, and up 4 1/4 cents in the May Minneapolis contract.

The March U.S. dollar index is down 0.18 at 101.90. April gold is down $7.00 at $1,202.40 while May silver is down 31 cents and May copper is down $0.0215. The Dow Jones Industrial Average is down 47 at 20,809. April crude oil is down $1.54 at $48.74. April heating oil is down $0.0401 while April RBOB gasoline is down $0.0374 and April natural gas is up $0.048.

Corn:

May corn closed down 5 1/4 cents, posting its lowest close in five weeks after USDA kept its estimate of U.S. ending corn stocks unchanged at 2.32 billion bushels and shifted 50 million bushels of feed demand to ethanol in the process. The bearish influence on corn prices came from USDA increasing its estimate of Brazil's corn crop estimate from 86.5 to a higher-than-expected 91.5 million metric tons and Argentina's crop from 36.5 mmt to 37.5 mmt. The new world ending corn stocks estimate of 220.68 mmt was more than expected and represents 21.2% of annual use. Even though Thursday's higher South American estimates were higher than expected, they were in line with several recent private estimates as Brazil's good crop weather is no secret this year. Earlier Thursday, Brazil's government (CONAB) increased its estimate of Brazil's corn crop to 89.0 mmt. USDA also said last week's export sales and shipments of corn totaled 29.2 million bushels and 57.2 mb respectively, bullish amounts that have total exports up 66% in 2016-17 from a year ago. We continue to wait for USDA to raise its estimate of U.S. corn exports in 2016-17 and also note Thursday's news that 4.7 mb (120,000 metric tons) of U.S. corn were sold to Japan for 2016-17. May corn's gradual uptrend appears to be ending as prices test the lower end of their seven-week range. There were 10 deliveries of March corn early Thursday. DTN's National Corn Index closed at $3.31 Wednesday, priced 41 cents below the May contract and near its highest price in eight months. In outside markets, the March U.S. dollar index is down 0.18 with the next Fed rate decision due out March 15.

Soybeans:

May soybeans closed down 10 3/4 cents at a new eight-week low after USDA increased its estimate of Brazil's soybean crop from 104.0 mmt to a higher-than-expected 108.0 mmt, coming just hours after Brazil's government (CONAB) increased its own soybean crop estimate to 107.6 mmt. The increase was the only notable change in USDA's world soybean estimates, but packed a bearish punch for anyone hoping that similar private estimates were wrong. USDA increased its estimate of U.S. ending soybean stocks from 420 mb to 435 mb, due to a 25 million bushel cut in exports and 10 million bushel boost in the crush estimate. USDA now expects Brazil to export 2.24 billion bushels of soybeans in 2016-17, more than their 2.025 billion bushel estimate for the U.S., but don't be surprised to see those numbers change as the year goes on. Both U.S. and Brazilian soybean prices are currently close. Earlier Thursday, USDA said last week's export sales and shipments of soybeans totaled 17.8 mb and 36.1 mb respectively, a bullish pace that USDA does not expect to hold up in the second half of the season. Thursday's new low in May soybeans is the third such break in 2017 and is turning the trend lower. DTN's National Soybean Index closed at $9.42 Wednesday, priced 80 cents below the May contract and also within a sideways range. Among March contracts, there were 254 soybeans, 228 meal, and 720 bean oil delivered early Thursday.

Wheat:

May Chicago wheat closed down 3 cents, a mild bearish response with no significant surprises in Thursday's WASDE report. USDA reduced its estimate of U.S. ending wheat stocks from 1.139 billion bushels to 1.129 bb due to a 10-mb cut in the import estimate. World ending wheat stocks increased from 248.61 mmt to 249.94 mmt after crop estimates for Australia and Argentina were raised by a total of 3 mmt. Earlier Thursday, USDA said last week's export sales and shipments of wheat totaled 14.4 mb and 16.6 mb respectively, a neutral-to-bearish combination that is making no dent in the anticipated surplus. Thursday's report was slightly bearish for wheat overall, but traders are more interested in the health of the next winter wheat crop as it works through an early spring and dry conditions. May Chicago wheat remains in an uptrend with no strong bullish argument at this time. DTN's National SRW index closed at $4.02 Wednesday, priced 45 cents below the May contract and near its highest price in eight months. DTN's National HRW index closed at $3.72 and was near its highest price in eight months. Among March wheat contracts, remaining open interest is low and there were 134 deliveries of Chicago and three deliveries of Minneapolis wheat early Thursday. March U.S. grain contracts are set to expire Tuesday, March 14.

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

Follow Todd Hultman on Twitter @ToddHultman1

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