DTN Closing Grain Comments

General Comments:

Corn was up 1 3/4 cents in the March contract and up 1 1/2 cents in the December. Soybeans were down 3 cents in the March contract and down 1 cent in the November. Wheat closed up 4 1/2 cents in the March Chicago contract, up 5 3/4 cents in the March Kansas City, and up 5 1/4 cents in the March Minneapolis contract.

The March U.S. dollar index is up 0.17 at 92.27. February gold is down $6.10 at $1,314.30, while March silver is down 11 cents and March copper is down $0.0015. The Dow Jones Industrial Average is up 152 points at 25,435. February crude oil is up $1.45 at $63.18. February heating oil is up $0.0231 while February RBOB gasoline is up $0.0527 and February natural gas is up $0.080.

Corn:

Back to a five-day week of trading, March corn experienced Turnaround Tuesday and took back 1 3/4 cents of Monday's 4-cent loss. There was not much new to learn on Tuesday, but prices were helped by bargain-hunting and a likely reluctance among traders to break a new low ahead of Friday's USDA reports. Dow Jones' survey showed analysts expecting a slight reduction on average in USDA's corn yield estimate, to 175.2 bushels an acre. They also expect USDA to estimate 2.41 billion bushels of U.S. ending stocks for 2017-18, slightly less than the current 2.44 billion bushels. Dec. 1 U.S. corn stocks are anticipated at 12.407 billion bushels, up 21 million bushels from a year ago. The risk, of course, is that even though small changes are expected in Friday's reports, a larger surprise is still possible. For now, March corn futures are holding a sideways trend while cash corn prices have shown steady improvement. DTN's National Corn Index closed at $3.14 Monday, priced 33 cents below the March contract and down a nickel from its highest price in four months. In outside markets, February crude oil drew speculative attention, trading up $1.45 at $63.18, its highest price since December 2014 as OPEC's production cuts are having their intended effect.

Soybeans:

March soybeans finished down 3 cents at $9.63 3/4, pressured by a $3.30 drop in March soybean meal related to improved chances for beneficial rain in Argentina this week. Brazil's crops should be doing fine as more rain was falling across central Brazil Tuesday while southern Brazil and Argentina stayed dry. Tuesday's new forecast for rain in Argentina weakens the already shaky bullish case for soybeans, but so far, March soybean prices are not breaking new lows ahead of Friday's USDA reports. According to Dow Jones, analysts expect a slightly lower soybean yield of 49.4 bushels per acre and a higher estimate of U.S. ending soybean stocks, at 477 million bushels. Dec. 1 soybean stocks are anticipated at 3.19 billion bushels, about 290 million bushels higher than a year ago. As U.S. soybean shipments are down 14% from a year ago, a bearish report on Friday seems likely. For now, the trend in March soybeans remains down, slowed by commercial net longs. DTN's National Soybean Index closed at $8.96 Monday, priced 71 cents below the March contract and up from its lowest price in over two months. Among January contracts, delivery intentions totaled 21 for soybeans, 170 for soybean meal, and 214 for soybean oil early Tuesday. January grain futures contracts expire early Friday.

Wheat:

March Chicago wheat closed up 4 1/2 cents at $4.32 1/4, and March K.C. wheat was up 5 3/4 cents at $4.39, both showing quick and unexpected rebounds from Monday's losses. Here in the midst of winter, wheat prices are not apt to stray very far, but it is interesting to see more patches of drought on the U.S. Drought Monitor than usual. Yes, it is too early to assume things about the upcoming spring, but the persistence of dry conditions is helping to keep winter wheat prices supported at a time when domestic supplies are high and exports are low. Friday's new USDA estimates will likely repeat the same old bearish story, as Dow Jones' survey expects USDA to estimate 962 million bushels of U.S. ending stocks for 2017-18 and show 1.849 billion bushels of U.S. wheat stocks for Dec. 1, down 228 million bushels from a year ago, but still a bearish pace of disappearance. A surprise is always possible in Friday's numbers, but for now, the trend in winter wheat remains sideways. DTN's National SRW index closed at $3.96 Monday, priced 32 cents below the March contract and down from its highest price in over two months. DTN's National HRW index closed at $3.85, still near its highest price in over four months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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