DTN Closing Grain Comments

Grains Slide Lower; Soybeans Hold Firm

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

General Comments:

Corn was down 3 1/4 cents in the March contract and down 3 cents in the July. Soybeans were up 2 3/4 cents in the January contract and up 3 cents in the July. Wheat closed down 6 1/2 cents in the March Chicago contract, down 6 3/4 cents in the March Kansas City, and down 11 1/2 cents in the March Minneapolis contract. The December U.S. dollar index is up 0.13 at 92.84. December gold is up $6.90 at $1,294.20 while December silver is up 3 cents and December copper is down $0.0370. The Dow Jones Industrial Average is up 25 at 23,583. January crude oil is down $0.74 at $58.21. January heating oil is up $0.0039 while January RBOB gasoline is up $0.0093 and January natural gas is up $0.102.

Corn:

March corn closed down 3 1/4 cents Monday at $3.51 3/4, pressured by the same set of bearish factors at work since at least September: A fifth consecutive big fall corn harvest, bottle-necked by a slow export pace in the start of the new season. Monday morning, USDA said 25.1 million bushels of corn were inspected for export last week, a bearish amount that has total inspections down 42% in 2017-18 from a year ago. In Argentina, over one-third of the next corn crop has been planted and the weather has been dry, but there are chances for beneficial rains in western Argentina later this week. Commercial buyers have been active takers of corn at these lower prices and CFTC's next Commitments of Traders report will be released later Monday afternoon. Technically, the trend in December corn remains down with noncommercial traders holding their largest short position in over four years. DTN's National Corn Index closed at $3.06 Friday, priced 36 cents below the December contract and down from its highest prices in two months. In outside markets, the December U.S. dollar index is up 0.13 while other commodities are mixed.

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Soybeans:

January soybeans ended up 2 3/4 cents at $9.96 on Monday, helped by a $3.40 gain in January soybean meal. January soybean oil, on the other hand, fell 0.34 to a new one-month low after March palm oil fell to a new three-month low earlier Monday. The overall soybean crush return based on January futures contracts remains high at 17.1% and that should be a supportive factor for soybean prices. Exports on the other hand, have been slow. USDA said 58.0 million bushels of soybeans were inspected for export last week, a bearish amount that put total inspections down 14% in 2017-18 from a year ago. The larger issue of course, is South America's weather, which currently looks generally favorable for Brazil and better for Argentina with chances for rain in western Argentina later this week. Brazil's FOB soybean price dropped from $10.75 to $10.60 on Monday, a sign of easing concerns. The level of uncertainty for South America's crops is still high, however, as we approach the southern equivalent of June. For now, the trend in January soybeans remains sideways with resistance offered at the October high of $10.13. DTN's National Soybean Index closed at $9.18 Friday, priced 75 cents below the January contract and near its highest prices in three months.

Wheat

March Chicago wheat fell to a new contract low Monday, closing down 6 1/2 cents at $4.28 1/4. October ended with a new low that held until Friday and now, Chicago wheat is taking another step down near the end of November, finding buyers sparse for this abundant grain. Dry conditions in the southwestern Plains have been no help to winter wheat prices this fall and there is not much in the seven-day forecast, but the ten-day forecast gives rain a better a chance and that may explain some of Monday's selling. Otherwise, futures spreads confirm U.S. wheat supplies remain plentiful and exports have been slow. Monday morning, USDA said 12.7 million bushels of wheat were inspected for export last week, more than a year ago, but still not enough to threaten USDA's 935 million bushel ending stocks estimate for the U.S. in 2017-18. Technically, winter wheat prices remain under bearish pressure with commercial buyers staying patient while they know they are the only source of support around. DTN's National SRW index closed at $3.84 Friday, priced 32 cents below the December contract and still holding above its August low. DTN's National HRW index closed at $3.61, 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