DTN Closing Grain Comments

Soybean Meal Hits New High on Bearish Day for Commodities

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

General Comments:

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

The December U.S. dollar index is up 0.33 at 93.17. February gold is down $4.60 at $1,277.70 while March silver is down 3 cents and March copper is down $0.0020. The Dow Jones Industrial Average is up 159 at 24,390. January crude oil is down $0.88 at $57.48. January heating oil is down $0.0440 while January RBOB gasoline is down $0.0451 and January natural gas is down $0.086.

Corn:

March corn dropped 5 1/4 cents Monday to close at $3.53 1/2, back down to last Wednesday's close. Corn prices remain pressured by the familiar scenario of plentiful U.S. supplies and slow export pace along with bearish influence from a lower day for most commodities. Monday morning, USDA said 23.8 million bushels of corn were inspected for export last week, putting total inspections down 43% in 2017-18 from a year ago. There are no USDA Crop Progress reports in December, but if there were, it would likely say corn is 98% or 99% harvested, just in time to miss the snow and colder temperatures expected across the northern Corn Belt this week. With spot corn prices near their lowest levels in 11 years, Friday's CFTC data showed noncommercials still heavily bearish in corn with 91,852 net shorts as of Nov. 28. Commercials trimmed net longs from 86,238 to 83,304, but still find attractive value in March corn prices near the mid $3s. Technically, March corn remains in a downtrend, but at these low prices, support should be near with help from commercials. DTN's National Corn Index closed at $3.15 Friday, priced 44 cents below the March contract and at its highest price in two months. Early Monday, 1,270 delivery intentions were assigned to December corn. In outside markets, the December U.S. dollar index is up 0.33 and Dow Jones futures are up 159 points after the U.S. Senate passed a tax reform bill over the weekend.

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Soybeans:

January soybeans closed up 4 1/4 cents Monday, a moderately bullish surprise to start to the week, supported by evidence of commercial buying and a new four-month high in January soybean meal. Adding to Monday's bullishness, FOB soybean prices in Brazil jumped up 19 cents from Friday's close to $10.80 a bushel, the highest price since March and was likely related to concerns about La Nina and a drier forecast for Argentina. South American weather concerns early in the growing season is a volatile recipe for prices, but so far, January soybean prices are staying in their sideways trading range, reluctant to follow Monday's bullish change of trend in soybean meal. Friday's CFTC data showed noncommercials still lightly bullish in soybeans with 62,873 net longs as of Nov. 28. Monday morning, USDA said 71.4 mb of soybeans were inspected for export last week, putting the new total down 12% in 2017-18 from a year ago. DTN's National Soybean Index closed at $9.22 Friday, priced 73 cents below the January contract and near its highest prices in four months. Friday's delivery intentions for December contracts totaled 294 for soybean meal and 155 for soybean oil.

Wheat:

March Chicago wheat ended down 3 1/4 cents Monday, still in the same steady-to-lower pattern while U.S. and global wheat supplies remain abundant. As anticipated Friday, southeastern Australia did get heavy rain over the weekend, which may lead to some losses as the region's wheat was getting ready for harvest. Here in the U.S., southern Texas and the southeastern U.S. are expecting rain this week, but conditions will stay mostly dry in the Southern Plains, west of Arkansas. Along with plentiful supplies goes a slow export pace, and that is not changing yet. USDA said 15.2 mb of wheat were inspected for export last week, putting total inspections down 7% in 2017-18 from a year ago. Friday's CFTC data showed noncommercials even more bearish in Chicago wheat with 82,289 net shorts as of Nov. 28, the most since May. Commercials increased net longs to 83,012, also the most since May. For now, the two sides remain at a standoff while futures prices trend gradually lower. DTN's National SRW index closed at $3.97 Friday, priced 42 cents below the March contract and still above its August low. DTN's National HRW index closed at $3.71, still holding stubbornly 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