DTN Closing Grain Comments

General Comments:

Corn was up 1/4 cent in the March contract and up 1/2 cent in the July. Soybeans were up 10 cents in the January contract and up 9 1/4 cents in the July. Wheat closed down 2 1/2 cents in the March Chicago contract, down 2 1/2 cents in the March Kansas City and down 2 3/4 cents in the March Minneapolis contract.

The December U.S. dollar index is up 0.21 at 93.35. February gold is down $10.00 at $1,267.70 while March silver is down 26 cents and March copper is down $0.1385. The Dow Jones Industrial Average is down 64 at 24,226. January crude oil is up $0.14 at $57.61. January heating oil is up $0.0186 while January RBOB gasoline is up $0.0266 and January natural gas is down $0.074.

Corn:

March corn closed up a tick Tuesday, staying stubbornly near its 2017 low while soybean prices rally on concerns of dry weather in Argentina. That is a bit odd as Argentina is also a major corn grower, but excess corn supplies are easier to find than soybeans. With USDA estimating 2.49 billion bushels of U.S. ending corn stocks in 2017-18, noncommercial traders are showing no sign yet of being uncomfortable with their large short positions, but that doesn't mean limited short-covering rallies can't occur as commercials remain active buyers at these low prices. For now, the trend in March corn remains down as traders continue to watch developments in South America. DTN's National Corn Index closed at $3.11 Monday, priced 43 cents below the March contract and down from its highest price in two months. Early Tuesday, 1,122 delivery intentions were assigned to December corn. In outside markets, March copper is down 13.85 cents. Dow Jones explained an increase of LME warehouse copper stocks and concerns about China's real estate market contributed to Tuesday's big drop.

Soybeans:

January soybeans closed up a dime Tuesday, briefly trading above the October high of $10.13 before settling at $10.08 1/2. The latest seven-day forecast is spurring prices higher expects moderate rain across central Brazil, lesser amounts for southern Brazil and mostly dry conditions for Argentina where crop concerns are most serious in light of this year's La Nina conditions. The tricky part for soybean prices is that it is still early in South America's new season, and there is plenty of time for things to change -- either better or worse for crops. The point being that this is a potentially volatile situation and November 2018 soybeans at $10.18 1/2 are currently offering producers their highest prices since July. For now, January soybeans are at the upper end of a sideways trading range while new-crop soybeans are trending higher -- both caught in a volatile and highly uncertain situation. DTN's National Soybean Index closed at $9.25 Monday, priced 73 cents below the January contract and at its highest price in four months. Tuesday's delivery intentions for December contracts totaled 257 for soybean meal and 329 for soybean oil.

Wheat:

March Chicago wheat closed down 2 1/2 cents Tuesday, still finding almost no help to get away from this year's low of $4.24 1/4. Thankfully for producers, commercials are willing buyers at these low prices, and that should continue to provide support, but noncommercial traders remain heavily short in Chicago wheat, apparently comfortable that supplies are plentiful. As mentioned in Tuesday's DTN article, "HRW Wheat Biding Time," heavy wheat supplies discourage traders from buying, but they don't tell us anything about what lies ahead. For now, the trend in winter wheat remains sideways to lower for futures prices while cash winter wheat prices have held roughly sideways since August. Except for southern Texas, the seven-day forecast remains mostly dry for the southwestern U.S. Plains. On a side note, China's purchases of U.S. sorghum are up in the new season and early Tuesday, USDA said another 6.4 million bushels (162,000 metric tons) of U.S. grain sorghum were sold to China for 2017-18. Sorghum is one crop that offers an alternative to HRW wheat planting this season. DTN's National SRW index closed at $3.94 Monday, priced 41 cents below the March contract and still above its August low. DTN's National HRW index closed at $3.71. Among December contracts, there were 247 delivery intentions for Chicago wheat and 12 for K.C. wheat early Tuesday.

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

Follow Todd Hultman on Twitter @ToddHultman1

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