DTN Closing Grain Comments

Grains Quiet, Santa's Permits in Order

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

General Comments:

Corn closed up 3/4 cent in the March contract and up 1 cent in the July. Soybeans closed up 1 1/4 cents in the March and up 3/4 cent in the July. Wheat closed down 2 1/4 cents in the March Chicago, down 2 cents in the March Kansas City, and down 5 1/4 cents in the March Minneapolis. The March U.S. dollar index is up 0.04 at 92.90. February gold is up $9.20 at $1,279.80 while March silver is up $0.20 and March copper is up 0.0220. The Dow Jones Industrial Average is down 52 at 24,730. February crude oil is up $0.01 at $58.37. February heating oil is up $0.0145, February RBOB gasoline is up $0.0062, and February natural gas is up $0.061.

For the week:

March corn closed up 4 1/2 cents and July closed up 4 1/2 cents. March soybeans were down 17 3/4 cents while the July was down 19 1/4 cents. March Chicago wheat was up 6 1/2 cents, March Kansas City wheat was up 4 3/4 cents, and March Minneapolis wheat was down 8 1/4 cents.

Corn:

March corn ended up 3/4 cent at $3.52 Friday, posted a 4 1/2-cent gain on the week, and made a modest recovery from the new contract low posted earlier this week. As good as that sounds, and there are reasons to suspect this week's new low will stand as support, we have to admit there is nothing fundamentally bullish in corn happening to expect significantly higher prices anytime soon. The one curious event that needs more time to prove out is how the FOB corn price at Brazil's ports jumped up 32 cents in the past eight days to trade at $4.23 on Friday, 25 cents above the FOB price at the U.S. Gulf. If Brazil's higher price can be sustained, the U.S. should start seeing increased export business, which should at least help ease corn's gloomy, bearish mood. For now, the trend in March corn remains down, but note that Friday's higher close did turn the weekly stochastic higher -- a bullish change in momentum that deserves watching. DTN's National Corn Index closed at $3.14 Thursday, priced 37 cents below the March contract and near its highest price in four months. In outside markets, most commodities were mixed, but February gold is trading up $9.00, making a comeback from the new three-month low made earlier this month. U.S. grain futures will trade again on Tuesday morning.

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Soybeans:

March soybeans ended up 1 1/4 cents at $9.60 1/4 Friday, putting a tourniquet on the steady downward slide of prices that soybeans have been in since Dec. 5. In an email sent late Thursday from the National Grain and Feed Association (NGFA), the association explained that China's stricter requirement on the level of acceptable impurities in U.S. soybean shipments was part of an agreement reached in early December with USDA. The good news for the U.S. is that shipments certified as having less than 1% impurities will be expedited through China's inspections. On the other hand, shipments with more than 1% will be subject to whatever China deems necessary, possibly further cleaning. The change is one more expense for shippers in the trade process, but should not significantly reduce U.S. shipments. At 8 a.m. CST, USDA announced China bought 9.3 million bushels (252,000 mt) of U.S. soybeans for 2017-18. The bigger concern of course, is that South America's crops continue to do well this year and soybean exports will likely become more competitive again around March. For now, the trend in March soybeans remains down. DTN's National Soybean Index closed at $8.80 Thursday, priced 69 cents below the January contract and at its lowest price in over two months.

Wheat:

March Chicago wheat closed down 2 1/4 cents at $4.24 3/4 Friday, but were up 6 1/2 cents on the week. This week's modest rally was helped by the anticipation of sub-freezing temperatures that reached as far south as the Texas Panhandle Friday morning and are expected to stay for a while, along with mostly dry weather throughout the southwestern U.S. Plains. Given winter wheat's track record, these conditions should not be much of a problem for next year's harvest, but at least it may have triggered a light amount of noncommercial short-covering to help lift prices. It is difficult to expect much price movement out of wheat in the winter, but the current stretch of dry weather may get more interesting if we're still talking about it in April 2018. For now, the trend remains down in winter wheat with commercials helping support prices in the low $4s. DTN's National SRW index closed at $3.90 Thursday, priced 37 cents below the March contract and up from its lowest price in seven months. DTN's National HRW index closed at $3.71, a few cents shy of its November high.

Merry Christmas to all!

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman