DTN Closing Grain Comments

Grains Enjoy Friday Bounce

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

General Comments:

Corn closed up 3 cents in the March contract and up 3 cents in the July. Soybeans closed up 8 1/2 cents in the January and up 8 1/2 cents in the July. Wheat closed up 5 1/2 cents in the March Chicago, up 6 cents in the March Kansas City, and up 9 3/4 cents in the March Minneapolis.

The December U.S. dollar index is down 0.13 at 92.87. February gold is up $7.10 at $1,283.80 while March silver is down $0.06. March copper is up 0.0325. The Dow Jones Industrial Average is down 76 at 24,196. January crude oil is up $0.98 at $58.38. January heating oil is up $0.446, January RBOB gasoline is up $0.0125, and January natural gas is up $0.038.

For the week:

March corn closed up 3 3/4 cents and July closed up 3 1/4 cents. January soybeans were up 1 cent while the July was up 3 1/4 cents. March Chicago wheat was up 3 3/4 cents, March Kansas City wheat was up 5 1/2 cents, and March Minneapolis wheat was down 7 cents.

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Corn:

March corn closed up 3 cents Friday and was up 3 3/4 cents on the week as traders gave La Nina readings more attention, a potential source of dry weather ahead for South America. It is still early in the new corn season and these things can change, but they deserve watching, and if nothing else, give corn prices a much-needed break from the bearish mood that has dominated trading the past three months. One of corn's bearish factors has been its slow pace of exports, a hangover from the last big harvests in South America. Based on historic patterns, U.S. corn exports should see some improvement early in 2018. USDA did say early Friday that 5.1 million bushels (130,000 metric tons) of U.S. corn were sold to unknown destinations for 2017-18. Technically, March corn remains in a downtrend, but downside potential should be limited, thanks to commercial buying in the mid $3s and a reluctance of farmer selling at these low prices. DTN's National Corn Index closed at $3.10 Thursday, priced 46 cents below the March contract and near its highest prices in two months. Early Friday, 1,286 delivery intentions were assigned to December corn. In outside markets, February gold is trading up $7.10 and January crude oil is up 98 cents at the end of a week, which includes former National Security Adviser Flynn pleading guilty in federal court to lying to the FBI and OPEC, and Russia agreeing to extend oil production cuts to the end of 2018.

Soybeans:

January soybeans closed up 8 1/2 cents Friday at $9.94 1/4 and were up a penny on the week, continuing to chop within a sideways range while South America's crops make it to the southern equivalent of June. La Nina received more mention Friday as both ocean temperatures and Australia's Southern Oscillation Index now confirm the weather pattern that is known for being a source of dry weather in South America. Currently, crop conditions in Brazil are generally favorable with more rain in the forecast for the week ahead. Argentina has benefited from recent rains and has light to moderate amounts in this week's forecast but could use more. The trend in January soybeans remains sideways while January soybean meal is challenging its highest prices in four months. DTN's National Soybean Index closed at $9.13 Thursday, priced 73 cents below the January contract and near its highest prices in three months. Friday's delivery intentions for December contracts totaled 59 for soybean meal and 279 for soybean oil.

Wheat:

March Chicago wheat closed up 5 1/2 cents at $4.38 1/2 Friday and was up 3 3/4 cents on the week, having come back from Tuesday's new contract low. La Nina is also known for increased precipitation in eastern Australia, and that is currently happening with 4 inches of rain or more expected over southeastern Australia the next few days where wheat is ready to be harvested. The crop loss may not eventually be significant in terms of world supplies, but it did help to shake noncommercials out of some of Friday's short positions. Otherwise, the fundamental outlook for wheat prices remains bearish with the U.S. struggling to export more than a billion bushels in 2017-18. Technically, the trend in winter wheat remains gradually lower with commercial support for Chicago wheat helping to keep prices roughly steady. DTN's National SRW index closed at $3.89 Thursday, priced 44 cents below the March contract and holding well above its August low. DTN's National HRW index closed at $3.64, 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