DTN Closing Grain Comments

K.C. Wheat Reaches November High

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

General Comments:

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

The March U.S. dollar index is up 0.28 at 91.85. February gold is down $1.80 at $1,314.30 while March silver is down 1 cent and March copper is down $0.0225. The Dow Jones Industrial Average is up 46 at 24,870. February crude oil is up $1.25 at $61.62. February heating oil is up $0.0277 while February RBOB gasoline is up $0.0342 and February natural gas is down $0.060.


March corn ended down a quarter cent on light volume Wednesday, still hiding out near multi-year lows while U.S. corn supplies remain ample and exports are slow. Wednesday's temperatures were more reasonable around the Midwest, except for below-zero readings in Minnesota and the Dakotas. The five-day forecast is mostly dry, making transportation workable. In South America, central Brazil continues to get plenty of rain for crops, but this week's forecast expects only light amounts for southern Brazil and Argentina, keeping traders on the edge of concern. Technically, the trend remains down for March corn, but the weekly stochastic for spot prices has turned higher -- an early sign of bullish momentum. As a side note, if it surprises you as it did me that the average American accounted for 2,151 pounds of corn use in 2017, read Wednesday's article from contributing analyst Elaine Kub, "2018: Time For Ag Commodity Demand." DTN's National Corn Index closed at $3.19 Tuesday, priced 34 cents below the March contract and at its highest price in four months. In outside markets, the March U.S. dollar index is up 0.28 after ISM's index of U.S. manufacturing jumped to 59.7 in December, higher growth than expected. February crude oil is trading up $1.25 at its highest spot prices since June 2015.


March soybeans finished up 4 cents at $9.68 3/4, this time receiving bullish influence from the oil side of soybeans. March palm oil jumped 2.9% higher overnight, which also encouraged March canola to close up C$3.80. March soybean oil closed up $0.35, matching its highest price in four weeks. Meanwhile, March soybean meal was up $0.70, still holding above support from its three-month low of $314.80. While crop conditions across central Brazil continue to look favorable and southern Brazil has received beneficial rains at times, dry conditions continue to be a concern in Argentina with not much moisture promised again in this week's forecast. The uncertainty is keeping March soybean prices in a holding pattern, even though they broke a new three-month low last week. Technically, the trend remains down in March soybeans with commercials taking the long side of the market the past two weeks. DTN's National Soybean Index closed at $8.91 Tuesday, priced 73 cents below the March contract and up from its lowest price in over two months. Among January contracts, delivery intentions totaled two for soybeans and 261 for soybean meal early Wednesday.


March Chicago wheat closed up 2 1/2 cents at $4.36, helped by light commercial buying. It was March Kansas City wheat that had the bigger day, closing up 6 1/4 cents at $4.41 after state NASS offices showed declines in good-to-excellent crop ratings for winter wheat. There is still a long way to go before we can see what winter wheat crops look like in the spring, but this latest stretch of cold and dry conditions in winter wheat country has at least been good enough to prompt some noncommercial short-covering. In the bigger picture, with so much wheat available around the world, it is difficult to expect any significant rally until we learn more about the next round of Northern Hemisphere crops later in 2018. For now, the trend in March Chicago wheat remains down while prices remain below their December high of $4.43. The trend may be changing though as the weekly stochastic of spot Chicago wheat prices has turned bullish -- an early sign of changing momentum. DTN's National SRW index closed at $3.99 Tuesday, priced 34 cents below the March contract and at its highest price in two months. DTN's National HRW index closed at $3.84, its highest price in over four months.

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

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Todd Hultman