DTN Closing Grain Comments

Grains Sag on Higher U.S. Dollar Index

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

General Comments:

Corn was down 1/2 cent in the December contract and down 1/2 cent in the July. Soybeans were down 3 3/4 cents in the January contract and down 4 1/4 cents in the July. Wheat closed down 3 3/4 cents in the December Chicago contract, down 5 1/4 cents in the December Kansas City, and down 1 cent in the December Minneapolis contract.

The December U.S. dollar index is up 0.87 at 94.45. December gold is down $10.30 at $1,268.70 while December silver is down 13 cents and December copper is down $0.0060. The Dow Jones Industrial Average is up 89 at 23,418. December crude oil is up $0.38 at $52.56. December heating oil is up $0.0219 while December RBOB gasoline is up $0.0159 and December natural gas is down $0.019.

Corn:

December corn ended down a half-cent Thursday with traders showing no concern about these late-October winter storms that are starting to work through the north-central U.S. The snow may not be a problem, but the National Weather Service has high wind warnings in the Dakotas, which could be tough on standing row crops. On the demand side, last week's export sales and shipments of corn were higher at 50.7 million bushels and 23.8 mb respectively, but the overall pace is still bearish total as corn shipments were down 42% in 2017-18 from a year ago. In addition to 2017's big harvest, the lack of a NAFTA agreement is weighing on corn prices. Also, the December U.S. dollar index traded at its highest prices in over three months Thursday after the European Central Bank announced a plan to reduce monthly asset purchases, but keep Europe's interest rates near zero. Technically, the trend remains sideways in December corn with plenty of bearish ammunition to extinguish potential rallies. DTN's National Corn Index closed at $3.07 Wednesday, priced 44 cents below the December contract and is still holding above its August low.

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Soybeans:

January soybeans closed down 3 3/4 cents Thursday on modest trading volume. As with corn, traders showed little concern about the forecast of windy and wintry weather in the northwestern U.S. Plains and the effects it may have on any soybeans still standing. At the same time, central Brazil is near the end of the southern equivalent of April and is showing wide coverage of much-needed rain in next week's forecast. DTN will monitor to see if the forecast verifies, but it should also be noted that Brazil's FOB prices are now 29 cents higher than those at the U.S. Gulf. Of course, that translates to better export business for the U.S. and early Thursday, USDA said last week's export sales and shipments of soybeans totaled 78.2 mb and 92.7 mb respectively, a higher combination than last week, but still on a bearish pace with total soybean shipments down 7% in 2017-18 from a year ago. Technically, the trend in January soybeans remains up, but trading above $10 has been difficult with a record U.S. soybean harvest headed toward the finish line. DTN's National Soybean Index closed at $8.96 Wednesday, priced 79 cents below the November contract and down from its highest price in over two months.

Wheat:

December Kansas City wheat ended down 5 1/4 cents, unfazed by any talk of freezing temperatures headed to the southwestern U.S. Plains this weekend. More likely, Thursday morning's export sales report reminded traders how difficult it is going to be to move U.S. wheat this year when everyone else has so much. Earlier Thursday, USDA said last week's export sales and shipments of wheat totaled 13.2 mb and 4.4 mb respectively, bearishly low amounts for the week that put total wheat shipments down 6% in 2017-18 from a year ago. The International Grains Council (IGC) updated their monthly estimates on Thursday and while they expect less ending world wheat stocks than USDA, IGC expects world ending wheat stocks to increase 7 million metric tons in 2017-18, to 249 mmt. Technically, the trend in winter wheat remains sideways while global supplies remain plentiful. DTN's National SRW index closed at $3.97 Wednesday, priced 38 cents below the December contract and still holding above its August low. DTN's National HRW index closed at $3.61, also holding above its August low.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman