DTN Closing Grain Comments

General Comments:

Corn was down 1 1/4 cents in the March contract and down 1 1/4 cents in the July. Soybeans were down 6 3/4 cents in the January contract and down 6 3/4 cents in the July. Wheat closed down 2 3/4 cents in the March Chicago contract, down 1 1/2 cents in the March Kansas City and down 3 1/4 cents in the March Minneapolis contract.

The December U.S. dollar index is up 0.28 at 94.12. February gold is down $3.40 at $1,243.50 while March silver is down 8 cents and March copper is up $0.0105. The Dow Jones Industrial Average is up 154 at 24,540. January crude oil is down $1.04 at $56.95. January heating oil is down $0.0260 while January RBOB gasoline is down $0.0331, and January natural gas is down $0.143.

Corn:

March corn closed down 1 1/4 cents Tuesday after USDA reduced its estimate of U.S. ending corn stocks from 2.487 billion bushels (bb) to 2.437 bb, thanks to a 50 million bushel (mb) increase in ethanol demand. Even though U.S. corn shipments are down 38% in 2017-18 from a year ago, USDA stayed with its 1.925 bb export estimate after reporting earlier Tuesday that 6.0 mb (152,000 metric tons) of U.S. corn were sold to Mexico for 2017-18. USDA slightly raised its estimate of world ending corn stocks from 203.86 million metric tons (mmt) to 204.08 mmt (8.03 bill bu) and no changes were made to crop estimates for Brazil or Argentina. Overall, Tuesday's report was neutral for corn prices, not enough to counter December's bearish mood. For now, the trend remains down in March corn with commercials finding attractive value here in the mid $3s. DTN's National Corn Index closed at $3.09 Monday, priced 40 cents below the March contract and down from its highest price in two months. Early Tuesday, there were 66 delivery intentions in December corn. In outside markets, the December U.S. dollar index is trading up 0.28 after the U.S. Labor Department said producer prices increased a little more than expected in November and added to speculation that the Federal Reserve will increase the federal funds rate at the conclusion of Wednesday's meeting.

Soybeans:

January soybeans closed down 6 3/4 cents Tuesday after USDA raised its estimate of U.S. ending soybean stocks from 425 mb to 445 mb or 10% of annual use. The only two changes noted were a 25 mb reduction in the export estimate and a 5 mb increase in seed demand. The lower export estimate was no surprise as exports have been lagging, but USDA did have news early Tuesday that 6.2 mb (168,300 mt) of U.S. soybeans were sold to unknown and a previous sale of 18.1 mb (492,000 mt) of soybeans to unknown was revealed as China, both for 2017-18. On the world soybean table, USDA lightly increased its estimate of ending soybean stocks from 97.90 mmt to 98.32 mmt (3.61 bb includes mid-year stocks from South America), but no significant changes were found as crop estimates for Brazil and Argentina remained the same as November's report. South America's weather remains the key for future soybean prices, and so far, concerns of dryness in southern Brazil and Argentina have not hit a serious level yet with light to moderate showers expected in Argentina this week. Until more is known, the trend in January soybeans remains sideways with important support at the November low of $9.67. DTN's National Soybean Index closed at $9.10 Monday, priced 72 cents below the January contract and down from its highest price in four months. Tuesday's delivery intentions for December contracts totaled 169 for soybean meal and 72 for soybean oil.

Wheat:

March Chicago wheat succumbed to another new contract low at $4.10 3/4 Tuesday after USDA increased in its estimate of U.S. ending wheat stocks from 935 mb to 960 mb. While the new estimate was officially higher than expected, it was not really a surprise as wheat's low export pace in 2017-18 is well known and not likely to change, while world supplies are widely available. In fact, it was a rare piece of news early Tuesday when USDA said 4.4 mb (120,000 mt) of HRW wheat were sold to Algeria for 2017-18. USDA increased its estimate of world wheat production in 2017-18 to a record high 755.21 mmt (27.75 bb), helped by a 3 mmt increase in Canada's wheat crop estimate. Ending world wheat stocks were also increased, from 267.53 mmt to 268.42 mmt (9.86 bb). The trend in March Chicago wheat futures remains down with commercials net long, but no bullish fundamental arguments to shake traders out of their short positions. DTN's National SRW index closed at $3.74 Monday, priced 39 cents below the March contract and holding above its August low while futures contracts make new lows. DTN's National HRW index closed at $3.56. Among December contracts, there were 15 delivery intentions for Chicago wheat, 29 for K.C. wheat, and 83 for Minneapolis wheat early Monday. December grain futures expire early on Dec. 14.

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

Follow Todd Hultman on Twitter @ToddHultman1

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