DTN Closing Grain Comments

Soybean Complex Loses Support

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

General Comments:

Corn was down 1 3/4 cents in the March contract and down 1 1/2 cents in the July. Soybeans were down 10 3/4 cents in the March contract and down 10 1/4 cents in the July. Wheat closed down 1/4 cent in the March Chicago contract, up 1 1/4 cents in the March Kansas City and down 2 1/4 cents in the March Minneapolis contract.

The March U.S. dollar index is down 0.31 at 92.30. February gold is up $5.00 at $1,296.40 while March silver is up 13 cents and March copper is up $0.0220. The Dow Jones Industrial Average is up 41 at 24,815. February crude oil is up $0.11 at $59.75. February heating oil is up $0.0053 while February RBOB gasoline is down $0.0069 and February natural gas is up $0.189.

Corn:

March corn closed down 1 3/4 cents at $3.52 Thursday, still struggling to get much separation from 2017's low while cash corn prices have shown improvement since mid-November, hitting a new four-month high on Wednesday's close. The steadily improving cash price plus the knowledge that commercials are on the long side of corn suggest prices should be close to support here in the mid-$3s. However, with plenty of corn in storage, there is no bullish fundamental reason at this time to change noncommercial attitudes from their current bearish outlook. One recent positive has been a 34-cent jump since mid-December in the FOB price for Brazil's old-crop corn. It will be interesting to see if Friday's weekly export sales report shows any increase in U.S. corn sales as a result of Brazil's higher prices. For now, the trend in March corn futures remains down. DTN's National Corn Index closed at $3.17 Wednesday, priced 37 cents below the March contract and at its highest price in four months. In outside markets, the March U.S. dollar index is down 0.31, near its November low while most outside commodities were higher. February natural gas is up 18.9 cents, boosted by this week's cold temperatures.

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Soybeans:

March soybeans closed down 10 3/4 cents at $9.56 3/4 Thursday, pressured by rain in northern Argentina and another favorable seven-day forecast for both, Brazil and Argentina. Soybean prices were also negatively impacted by Thursday's 0.56 drop in March soybean oil and another new six-month low in March canola. Ever since last week's new three-month low in March soybeans, the trend has been bearish and now that March soybean oil has posted a new six-month low, previously bullish noncommercial traders are under pressure to liquidate. March soybean meal is also potentially bearish for the same reason if prices fall below $314.80. With South American weather looking favorable and U.S. exports lagging last year's pace, the trend in March soybeans remains down with bullish noncommercial traders in the soy complex looking vulnerable to new lows. DTN's National Soybean Index closed at $8.89 Wednesday, priced 79 cents below the March contract and up from its lowest price in over two months.

Wheat:

March Chicago wheat closed down 1/4 cent at $4.27 3/4 while March Kansas City wheat was up 1 1/4 cents. Winter wheat prices got a little benefit out of this week's colder temperatures in the Southern Plains, but now that the conditions are well-known, not much is happening to surprise traders from either direction. Thursday's U.S. Drought Monitor showed moisture improvement in Arkansas and an increased area of severe drought conditions around southwestern Kansas. It is too early to impact wheat prices yet, but remains interesting that the western Plains are staying mostly dry this winter. The main point for now is that abundant winter wheat supplies are keeping prices under bearish pressure. The trend in winter wheat is down, but at these low prices, a sideways range is likely. DTN's National SRW index closed at $3.93 Wednesday, priced 35 cents below the March contract and near its highest price in two months. DTN's National HRW index closed at $3.70, at its highest price in three months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman