DTN Closing Grain Comments

Corn, Wheat Rebound Higher; USDA in View

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was up 7 1/2 cents in the May contract and up 6 1/2 cents in the December. Soybeans were down 1/4 cent in the May contract and up 1/4 cent in the November. Wheat closed up 4 3/4 cents in the May Chicago contract, up 3 3/4 cents in the May Kansas City, and up 1 cent in the May Minneapolis contract.

The June U.S. dollar index is down 0.22 at 100.89. June gold is down $2.30 at $1,255.00 while May silver is down 23 cents and May copper is down $0.0380. The Dow Jones Industrial Average is up 27 at 20,683. May crude oil is up $0.68 at $52.82. May heating oil is up $0.0138 while May RBOB gasoline is up $0.0086 and May natural gas is down $0.025.

Corn:

May corn closed up 7 1/2 cents Monday, erasing last week's entire loss with help from commercial buying and news of heavy rains over the weekend, which likely disrupted harvest activity in southern Brazil and Argentina. This week's forecast looks more harvest-friendly with dry weather expected in Argentina while central Brazil's second corn crop has a chance for light rain amounts. Friday's CFTC data showed noncommercial traders slightly bearish in corn with 14,541 contracts net short as of April 4. Commercials were net long for a second week, holding 31,997 contracts and signaling possible support around $3.50 to $3.60. Tuesday's WASDE report will likely show a higher corn crop estimate for Brazil while corn demand remains active. Earlier Monday, USDA said 46.1 million bushels were inspected for export last week, keeping this season's bullish pace alive. USDA added that 4.0 mb (101,600 metric tons) of U.S. corn were sold to unknown destinations for 2016-17. May corn appears to have found support and should be able to at least hold a sideways range above last month's $3.55 3/4 low. DTN's National Corn Index closed at $3.22 Friday, priced 37 cents below the May contract and near its lowest prices in 2017. In outside markets, the June U.S. dollar index is down 0.22 while cattle and crude oil are higher. Metals are lower.

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Soybeans:

May soybeans closed a quarter-cent lower Monday with bullish influence from soybean meal, but bearish influence from bean oil. Palm oil futures were down 2.5% overnight, ending near their lowest prices in five months and pulled May soybean oil down 0.27. May soybean meal on the other hand, ended up $1.70 after heavy rains fell in southern Brazil and Argentina over the weekend, likely causing some harvest disruption. The bigger bearish threat is that Brazil's soybean crop estimates have been growing and USDA's own estimate may increase from 108.0 million metric tons to 110.0 mmt or higher in Tuesday's WASDE report. Meanwhile, USDA said 32.8 mb of soybeans were inspected last week, up from the previous week and another bullish showing for soybean demand. Friday's CFTC data showed the seventh straight week of noncommercial liquidation in soybeans with traders now holding 22,157 net longs. Commercials are now net-long 42,924 soybean contracts, the most since March 2016 and an early hint of possible support. May soybeans remain in a downtrend, under bearish pressure, but could find support after getting past what will likely be bearish numbers in Tuesday's WASDE report. DTN's National Soybean Index closed at $8.67 Friday, priced 75 cents below the May contract and near its lowest price in nearly a year.

Wheat:

May Chicago wheat closed up 4 3/4 cents Monday, not going anywhere fast, but holding above the support of last Friday's bullish reversal with added help from Monday's rebound in corn prices. Monday's inspections report was neutral for wheat but may have given some support to prices as 23.6 mb of wheat were inspected last week, bringing the total within one percentage point of USDA's estimated export pace. Friday's CFTC data showed noncommercials still bearish in Chicago wheat with 86,931 contracts net short as of Apr. 4. Commercials remain net-long 81,155 contracts and continue to be a good source of support for prices at these levels. There is no bullish argument for winter wheat prices, but May Chicago wheat appears to be holding a sideways range above March's low of $4.16 1/2. DTN's National SRW index closed at $3.83 Thursday, priced 41 cents below the May contract and near its lowest prices in three months. DTN's National HRW index closed at $3.30 and also near its lowest price in three months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman