DTN Closing Grain Comments

Row Crops Mixed, Wheat Falls Back

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

General Comments:

Corn was up 2 cents in the December contract and up 1 1/4 cents in the July. Soybeans were down 1/2 cent in the January contract and down 1/4 cent in the July. Wheat closed down 5 1/4 cents in the December Chicago contract, down 6 cents in the December Kansas City, and down 8 3/4 cents in the December Minneapolis contract. The December U.S. dollar index is up 0.37 at 93.94. December gold is down $20.00 at $1,276.50 while December silver is down 49 cents and December copper is up $0.0230. The Dow Jones Industrial Average is up 91 at 23,449. January crude oil is down $0.57 at $56.14. January heating oil is down $0.0228 while January RBOB gasoline is down $0.0084 and January natural gas is down $0.034.

Corn:

December corn closed up 2 cents Monday, a quiet start to Thanksgiving week with another effort of commercial buying adding to Friday's rebound from contract lows. Friday's CFTC data showed noncommercials turned more bearish in corn as of Nov. 14, the first report since USDA's higher crop estimate. Noncommercial net shorts jumped from 87,000 to 125,113 contracts, the most since October 2013. Commercials increased net longs in corn from 74,855 to 121,614, a strong show of support for corn's value at these new low prices. Monday's weather map is mostly dry across the Corn Belt and expected to stay that way this week, giving even the Eastern Corn Belt better chances to wrap up this year's harvest. Fundamentally, the outlook for corn remains bearish with USDA estimating 2.49 billion bushels of U.S. ending corn stocks in 2017-18 and corn exports not keeping up with their estimated pace. Monday morning, USDA said 24.9 million bushels of corn were inspected for export last week, a bearish amount, which put total inspections down 44% in 2017-18 from a year ago. Technically, the trend remains down for December corn, but the strong buying response among commercials suggests support is near for prices. DTN's National Corn Index closed at $3.06 Friday, priced 37 cents below the December contract and up from its lowest price in 2017. In outside markets, the December U.S. dollar index is up 0.37 and December gold is down $20.00 after the Conference Board said its index of leading indicators was up 1.2% in October, much more than expected.

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Soybeans:

January soybeans closed down a half-cent Monday, staying close to the middle of its sideways range while traders continue to watch over South America's weather. Central and eastern Brazil received beneficial rain over the weekend and more is expected this week for central Brazil while southern Brazil and Argentina will be drier. Another bearish influence on Monday's soybean prices came from India's decision to raise its import tariff on crude palm oil imports from 15% to 30% and on refined palm oil from 25% to 40%. December palm oil futures dropped 3.3% to their lowest close in three months and weighed on canola and soybean oil prices, taking December soybean oil down 0.49. Unlike corn, Friday's CFTC data showed noncommercials in soybeans relatively calm the past week, still lightly bullish with 51,887 net longs as of Nov. 14. One of soybeans' bearish disappointments this fall has been the slow pace of exports and that continued Monday. USDA said 78.3 million bushels of soybeans were inspected last week, putting total inspections down 13% in 2017-18 from a year ago, well below their estimated pace. Even so, the trend in January soybeans remains sideways with the flow of soybeans depending on Brazil to come up with another 4 billion bushel crop in early 2018. DTN's National Soybean Index closed at $9.13 Friday, priced 77 cents below the January contract and back up from the lowest price in over a month.

Wheat

December Chicago wheat closed down 5 1/4 cents, erasing most of Friday's gain and staying safely inside November's narrow, sideways trading range. In spite of the possible confusion from up and down trading this month, the fundamental outlook for winter wheat remains clearly bearish with wheat supplies plentiful in the U.S. and around the world and the pace of U.S. exports slow. USDA said Monday 9.5 million bushels of wheat were inspected for export last week, pulling total inspections in 2017-18 down to minus 7% from a year ago. At that rate, U.S. wheat supplies are at no risk of disappearing over the winter so traders are content to stay short. Friday's CFTC data showed noncommercials still bearish in Chicago wheat, but carrying a lighter position of 66,771 net shorts as of Nov. 14. Commercials trimmed back net longs from 81,604 to 69,612, but still stand as wheat's primary source of support. The trend in winter wheat remains roughly sideways near its lowest spot prices in eleven years with no strong argument for prices to trade significantly higher yet. DTN's National SRW index closed at $3.94 Friday, priced 33 cents below the December contract and still holding above its August low. DTN's National HRW index closed at $3.68, still holding stubbornly above its August low.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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Todd Hultman