DTN Closing Grain Comments

Wheat Falls, Canada Finds Larger Crop

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

General Comments:

Corn was down 1 cent in the March contract and down 1 1/4 cents in the July. Soybeans were down 5 3/4 cents in the January contract and down 5 1/2 cents in the July. Wheat closed down 7 1/2 cents in the March Chicago contract, down 8 cents in the March Kansas City and down 12 3/4 cents in the March Minneapolis contract.

The December U.S. dollar index is up 0.20 at 93.53. February gold is up $2.10 at $1,267.00 while March silver is down 6 cents and March copper is up $0.0195. The Dow Jones Industrial Average is up 16 at 24,197. January crude oil is down $1.42 at $56.20. January heating oil is down $0.0461 while January RBOB gasoline is down $0.0524 and January natural gas is up $0.006.

Corn:

March corn closed down a penny Wednesday, refusing to get involved in the same excitement over dry conditions in Argentina that soybeans have shown lately. With USDA estimating 2.49 billion bushels of unused corn in 2017-18, noncommercials appear content to stay short while commercials continue to take advantage of corn's lowest spot prices in 11 years. So far in the new season, corn exports are still dragging, but domestic feed demand and ethanol production remain important sources of price support. Wednesday morning, the U.S. Energy Department said ethanol production hit a new record high of 1.108 million barrels a day last week, pushing ethanol inventory up from 22.0 to 22.5 million barrels. Technically, the trend in March corn remains down, but at these cheap prices, commercials are eager sources of price support. DTN's National Corn Index closed at $3.11 Tuesday, priced 42 cents below the March contract and down from its highest price in two months. Early Wednesday, 1,127 delivery intentions were assigned to December corn. In outside markets, the December U.S. dollar index is trading up 0.20 after RTTNews.com reported ADP as saying 190,000 private sector jobs were added in November, slightly more than expected. January crude oil is down $1.42 after the Energy Department showed a 6.8 million barrel increase in last week's gasoline supplies.

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Soybeans:

January soybeans closed down 7 1/2 cents Wednesday, taking some of the shine off of this week's rally related to concerns of dry weather in Argentina. Earlier Wednesday, USDA also acknowledged a reporting error, saying the Nov. 30 sale announcement of 19.3 million bushels (525,000 metric tons) of U.S. soybeans to China should have read 14.4 mb (393,000 mt) for 2017-18. As mentioned earlier this week, this is a potentially volatile time for soybean prices with early season concerns about dry weather in Argentina feeding this week's higher prices. The latest seven-day forecast remains mostly dry for Argentina with the best chances for rain on Friday. Southern Brazil is also mostly dry while the better rain chances stay in central and northern Brazil. Wednesday's lower close keeps January soybeans in their sideways trend for now, below October's high of $10.13 while traders continue to monitor South America's weather. DTN's National Soybean Index closed at $9.35 Tuesday, priced 73 cents below the January contract and at its highest price in four months. Wednesday's delivery intentions for December contracts totaled 295 for soybean meal and 262 for soybean oil.

Wheat:

March Chicago wheat closed down 7 1/2 cents, just a penny above its contract low. March Minneapolis wheat however, fell 12 1/2 cents to a new five-month low after Statistics Canada raised its estimate of all wheat production from 27.1 mmt to nearly 30.0 mmt, also well above USDA's estimate of 27.0 mmt for Canada. In addition, the December Canadian dollar was trading down 61/100ths of a cent Wednesday, a move which gives Canada slight marginal help in moving exports. Here in the U.S., the story remains much the same: ample wheat supplies and not much in the way of exports to move supplies while the world has plenty of choices for sourcing wheat this winter. In the meantime, the northwestern U.S. Plains and Southern Plains have patches of moderate to extreme drought hanging on with almost no precipitation in this week's forecast -- factors that may become more important next spring. For now, winter wheat remains under bearish pressure near their lowest spot prices in eleven years. DTN's National SRW index closed at $3.92 Tuesday, priced 41 cents below the March contract and still above its August low. DTN's National HRW index closed at $3.72. Among December contracts, there were 405 delivery intentions for Chicago wheat and 164 for K.C. wheat early Wednesday.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman