DTN Closing Grain Comments

General Comments:

Corn was down 1/2 cent in the March contract and down 1/2 cent 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 up 2 1/4 cents in the March Chicago contract, up 1 3/4 cents in the March Kansas City and down 3/4 cent in the March Minneapolis contract.

The March U.S. dollar index is down 0.28 at 93.18. February gold is up $7.10 at $1,264.60 while March silver is up 11 cents and March copper is up $0.0110. The Dow Jones Industrial Average is up 127 at 24,779. February crude oil is down $0.25 at $57.08. February heating oil is up $0.0180 while February RBOB gasoline is up $0.0127 and February natural gas is up $0.134.

Corn:

March corn ended down a half-cent at $3.47 Monday, not letting go of its lows as we head toward the final days of 2017. Plentiful corn supplies and a slow pace of exports are keeping traders bearish and even more short positions were added after last week's new contract low. Friday's Commitments of Traders Report from CFTC showed noncommercial net shorts increased from 53,708 to 75,849 as of Dec. 12. Commercials responded to Tuesday's new low by increasing net longs to 63,163, a show of contrary support for corn's lower prices. Monday morning USDA said there were technical problems in the weekly report of export inspections, but still had no correction by the market close. The original numbers USDA did post put total corn inspections down 40% in 2017-18 from a year ago, another bearish week, if true. Technically, the trend in March corn remains down, but should be getting close to support, thanks to active commercial buying at these low prices. DTN's National Corn Index closed at $3.08 Friday, priced 39 cents below the March contract and down from its highest price in two months. In outside markets, the March U.S. dollar index is down 0.28 with a vote on tax reform expected this week. Except for livestock, outside commodities are mostly higher.

Soybeans:

January soybeans fell 5 3/4 cents to a new three-month low of $9.61 1/2 after central Argentina received beneficial rain over the weekend. As we head toward the end of the southern equivalent of June, crop conditions appear generally favorable in South America with some concerns of dryness still in southern Brazil and Argentina. Monday's DTN blog by Lin Tan found some soybean farmers in central Brazil expecting record soybean yields this year as they have had plenty of beneficial rain (see "Farmers Say Mato Grosso Soybeans in Good Condition"). Going along with the better crop conditions, FOB soybean prices in Brazil have dropped 36 cents from their highs earlier this month, but are still 36 cents above FOB prices at the U.S. Gulf. At 8 a.m. CST, USDA said China bought 14.6 million bushels (396,000 metric tons) of U.S. soybeans for 2017-18. As mentioned above, we are still waiting for USDA to provide a corrected report of weekly inspections, due to technical problems at USDA. Friday's CFTC data showed noncommercials turning less bullish as net longs fell from 92,585 to 55,245 as of Dec. 12, just as January soybeans reached a new three week low. Monday's new three-month low turns the trend in January soybeans bearish, now matching the fundamental expectation for another large soybean crop in early 2018. DTN's National Soybean Index closed at $8.97 Friday, priced 70 cents below the January contract and within 8 cents of its November low.

Wheat:

March Chicago wheat closed up 2 1/4 cents at $4.20 1/2 Monday, getting a small lift from a light amount of noncommercial short-covering after Friday's CFTC data showed the most bearish position among noncommercial traders since April. The CFTC said noncommercial net shorts increased from 74,071 to 99,863 as of Dec. 12 while commercials matched the other side, increasing net longs to 100,376. Typically, noncommercials don't do well when they put on these large short positions at such cheap prices, but time will tell. While wheat is hibernating through winter, the western U.S. Plains are getting gradually drier, and except for eastern Texas and Arkansas, there is not much rain in the seven-day forecast. The other crop grown in the southwestern Plains heard news from USDA that China bought 6.6 mb (168,000 mt) of grain sorghum for 2017-18. Technically, Chicago wheat remains in a downtrend, a dime away from its lowest prices this year. The willingness of commercials to take on 100,000 net longs suggests that support should be near. DTN's National SRW index closed at $3.81 Friday, priced 37 cents below the March contract and up from its lowest price in seven months. DTN's National HRW index closed at $3.63, holding firm in a sideways range.

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

Follow Todd Hultman on Twitter @ToddHultman1

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