DTN Closing Grain Comments

Drought Concerns Help Oats, Winter Wheat End Higher

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

General Comments:

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

The March U.S. dollar index is up 0.07 at 90.38. February gold is down $11.60 at $1,327.60 while March silver is down 21 cents and March copper is up $0.0115. The Dow Jones Industrial Average is down 59 points at 26,056. March crude oil is down $0.03 at $63.89. March heating oil is down $0.0087 while March RBOB gasoline is up $0.0184 and March natural gas is down $0.057.

Corn:

March corn closed down 1 1/2 cents Thursday after a quiet day of trading and warmer temperatures, making travel more pleasant in the Western Corn Belt. Cash corn prices are still not profitable for many, but with DTN's national index showing its highest cash prices in five months, some may be tempted to lighten supplies in their bins. This week's South American forecast is drier for central Brazil and Argentina while southern Brazil has chances for moderate showers. Dry conditions in Argentina continue to offer minor concern for row crops. This week's repudiation of Friday's new contract low, made after the USDA came out with a higher crop estimate is a good candidate for at least an intermediate low. For now, the trend in March corn is sideways with loyal support from commercials in the mid-$3s. DTN's National Corn Index closed at $3.21 Wednesday, priced 32 cents below the March contract and at its highest price in five months. In outside markets, February gold is down $11.60 after the U.S. Labor Department said weekly jobless claims fell to 220,000, the lowest since 1973.

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Soybeans:

March soybeans closed up 4 1/4 cents at $9.73 Thursday, helped by a fourth consecutive day higher in March soybean meal. While we still cannot say that Argentina's dry weather is serious for crops, it continues to be enough of a concern to keep selling activity limited. This week's forecast is mostly dry for Argentina again while southern Brazil has chances for moderate showers. Brazil's soybean crop is on track for 4.0 billion bushels in early 2018 and that should allow China to keep avoiding U.S. imports through summer. For now, the trend in March soybeans is down, but the technical outlook is confused by a strong showing of commercial net longs and the recent rebound in meal prices. USDA's weekly report of export sales will be released early Friday due to this week's holiday schedule. DTN's National Soybean Index closed at $9.00 Wednesday, near its highest in a month and priced 68 cents below the March contract.

Wheat:

March Chicago wheat closed up 3 3/4 cents Thursday, helped by commercials finding good value at these cheap prices. This year's winter wheat crops have also had two bouts of bitter cold temperatures along with dry conditions in the western and Southern Plains. Thursday's U.S. Drought Monitor showed slightly drier conditions in the southwestern Plains as of Tuesday and the seven-day forecast is only expecting light amounts up and down the western Plains. It is still too early to declare a problem and winter wheat has been known to rebound from worse, but at least these winter concerns are causing enough doubts among traders to keep futures prices in a sideways range. DTN's National SRW index closed at $3.89 Wednesday, priced 33 cents below the March contract and down from its highest price in three months. DTN's National HRW index closed at $3.82, down from its highest price in five months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman