DTN Closing Grain Comments

Grains Mostly Lower, U.S. Dollar Rebounds

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

General Comments:

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

The December U.S. dollar index is up 0.41 at 93.24. December gold is down $2.90 at $1,291.50 while December silver is down 22 cents and December copper is down $0.0640. The Dow Jones Industrial Average is up 194 at 23,775. January crude oil is down $0.20 at $57.91. January heating oil is down $0.0007 while January RBOB gasoline is down $0.0114 and January natural gas is up $0.117.

Corn:

March corn closed down 2 cents Tuesday, staying near its lowest prices of 2017 with the market's focus on this season's heavy supplies. Late Monday, USDA said 95% of corn was harvested, not quite the 98% of a year ago. If USDA is correct, roughly 730 million bushels are still standing, mostly in the Eastern Corn Belt due to a wet fall. Tuesday's drier weather will help and is expected to continue until light showers return to the eastern Midwest this weekend. Tuesday morning, USDA released long-term projections, including 91.0 million acres of planted corn to produce a 14.5 billion bushel crop in 2018. After five consecutive big U.S. corn harvests, bullish sentiment among noncommercial traders is among the lowest levels seen since 2013. Monday's CFTC data showed noncommercials dropped 32,476 net shorts after the previous week's brief rally and are now holding 92,637 net shorts. Commercials took advantage of the previous week's rally and trimmed back net longs from 121,614 to 86,238. Everything about corn prices currently looks bearish, except to say that commercials remain active on the long side -- a good sign of corn's value at these cheap prices. DTN's National Corn Index closed at $3.04 Monday, priced 35 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 0.41 and other commodities are mostly lower after the Conference Board's consumer confidence index jumped to 129.5 in November, higher than expected reported RTTNews.com.

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Soybeans:

January soybeans dropped 3 cents Tuesday to $9.93, erasing Monday's gains for both, soybeans and meal as rain fell over central Brazil and is in the forecast for western Argentina later this week. As things currently stand, crop conditions for Brazil have improved this month and have more rain expected in this week's forecast. Even though Argentina has been drier lately, the situation is not yet serious, and rain is expected later this week. On Tuesday, USDA estimated soybean plantings at 91.0 ma in 2018, the same as corn plantings and producing a 4.36 bb soybean crop. Keep in mind that early yield estimates for corn and soybeans are just starting points and will go higher if good weather happens again. For now, January soybeans remain in a sideways trend with noncommercial traders holding 52,243 net longs as of Nov. 21. The next significant move in soybeans likely depends on the size of South America's crops in early 2018, and so far, conditions are generally favorable. DTN's National Soybean Index closed at $9.22 Monday, priced 74 cents below the January contract and near its highest prices in three months. Early Tuesday, USDA said last week's announcement of a 130,000 metric ton sale of soybeans to China was supposed to be a sale to unknown destinations for 2017-18.

Wheat:

March Chicago wheat started higher Tuesday, traded lower most the day, and then closed up a penny at $4.29 1/4, narrowly avoiding another new contract low. March Minneapolis wheat did not fare as well, falling 6x cents to a new five month low after CFTC reported late Monday that noncommercial traders built up net longs to 8,983, the most since July. In Chicago wheat, CFTC showed little change from the previous week with noncommercials holding 66,825 net shorts as of Nov. 21 while commercials held 69,296 net longs. USDA's final Crop Progress report of 2017 said 92% of winter wheat was emerged, even with the five-year average. DTN's Winter Wheat Condition Index fell 5 points to 130 and was down from last year's 147 as we hit the winter break. USDA's next update of crop ratings will come in April 2018 and a lot could change by then. Also on Tuesday, USDA set out its long-term projections, pegging all wheat plantings at 45.0 ma in 2018. If true, that would be the lowest U.S. wheat planting on record, a bearish sign of the times. For now, winter wheat prices continue to drift lower with patient commercials offering the only source of support. DTN's National SRW index closed at $3.78 Monday, priced 31 cents below the December contract and still above its August low. DTN's National HRW index closed at $3.56, 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