DTN Closing Grain Comments

General Comments:

Corn was up 2 cents in the March contract and up 1 3/4 cents in the July. Soybeans were down 5 1/2 cents in the March contract and up 5 1/2 cents in the July. Wheat closed up 3 1/2 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 up 0.03 at 92.92. February gold is up $0.50 at $1,270.10 while March silver is down 9 cents and March copper is up $0.0200. The Dow Jones Industrial Average is up 91 at 24,818. February crude oil is up $0.19 at $58.28. February heating oil is up $0.0040 while February RBOB gasoline is up $0.0123 and February natural gas is down $0.043.

Corn:

March corn ended up 2 cents Thursday at $3.51 1/4, finding enough support from commercials to lift prices up almost a nickel from their low for 2017. Of course, that is far from a bullish endorsement as prices continue to struggle under the weight of heavy U.S. supplies and a slow pace of exports. Early Thursday, last week's export sales and shipments of corn totaled 61.3 million and 27.6 million bushels respectively, higher sales than the previous week, but still a bearish combination that put total corn shipments down 36% in 2017-18 from a year ago. The most bullish thing that can be said for corn at the moment is that downside risk should be limited as the seasonal tendency is for corn prices to trade higher until late May and commercials remain net long -- a sign of corn's attractive value at these cheap prices. A gradual decline of soil moisture in Thursday's U.S. Drought Monitor may have also played a part in Thursday's small gain. For now, the trend remains down with noncommercial traders still bearish. DTN's National Corn Index closed at $3.12 Wednesday, priced 38 cents below the March contract and near its highest price in two months. In outside markets, the March U.S. dollar index is up 0.03, not showing much impact from the U.S. Commerce Department's announcement that real GDP was up 2.3% in the third quarter from a year ago, slightly less than estimated last month.

Soybeans:

March soybeans fell 5 1/2 cents to $9.59, another new three-month low with reports of rain in south-central Brazil and Argentina on Wednesday and more on the way in the week ahead. Adding to soybeans' bearish pressure, Bloomberg news reported Wednesday that China reduced the accepted level of allowable impurities in U.S. soybean shipments from 2% to 1%, a new burden that does not apply to Brazil's soybean shipments. The timing is curious as USDA only expects Brazil to have 145 million bushels of soybean supplies by Jan. 31, the end of their current season. However, with crops down south faring well so far, China is showing confidence that they can afford to go easy on U.S. purchases until Brazil's next harvest in early 2018. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 64.0 million and 56.6 million bushels respectively, another bearish combination for the week that has total soybean shipments down 13% in 2017-18 from a year ago. Weather could still offer a surprise in early 2018, but for now, the trend in March soybeans remains down. DTN's National Soybean Index closed at $8.86 Wednesday, priced 68 cents below the January contract and at its lowest price in two months.

Wheat:

March Chicago wheat closed up 3 1/2 cents at $4.27 Thursday, helped to its highest close in two weeks by commercial buying and possibly, some short-covering from bearish traders concerned about the daily yo-yo of sub-freezing temperatures and dry conditions that are expected in the southwestern U.S. Plains the next ten days. The bigger concerns for wheat prices of course, are the heavy U.S. supplies and slow pace of exports in a year when global ending wheat stocks are expected at a new record high. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 29.3 million and 21.2 million bushels respectively, a new marketing year high for sales, but not enough shipments yet to make a significant dent in the U.S. wheat surplus. Technically, the trend in Chicago wheat remains down with noncommercial traders holding their most net shorts since April -- position that is vulnerable for short-covering. DTN's National SRW index closed at $3.86 Wednesday, priced 38 cents below the March contract and up from its lowest price in seven months. DTN's National HRW index closed at $3.69, 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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