DTN Closing Grain Comments

Corn, Wheat Sag Lower in Quiet Trading

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

General Comments:

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

The March U.S. dollar index is down 0.20 at 90.00. February gold is up $5.70 at $1,337.60 while March silver is down 2 cents and March copper is down $0.0810. The Dow Jones Industrial Average is up 1 points at 26,216. March crude oil is up $0.80 at $64.37. March heating oil is up $0.0210 while March RBOB gasoline is up $0.0242 and March natural gas is up $0.112.

Corn:

March corn finished down 3/4 cent Tuesday, another quiet day of low volume trading where corn stayed within its narrow range. The government paid the light bill for a few more weeks, but Dow Jones reported some schedule changes as this week's export sales report is pushed to Friday morning. Corn's overriding feature continues to be that there is plenty of it, 2.48 billion bushels of ending stocks in 2017-18, says USDA. So far, the export pace has been slow and there has been no sign of that changing yet. If there is good news for corn producers it is that domestic demand has been good enough to lift cash corn prices up from their harvest lows. For now, the trend in March corn is sideways with no strong argument for prices to move far in either direction. DTN's National Corn Index closed at $3.20 Monday, priced 32 cents below the March contract and near its highest price in five months. In outside markets, the March U.S. dollar index is down 0.20 after lawmakers agreed to temporarily reopen the U.S. government. Outside commodities are mixed, but both gold and crude oil are higher.

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Soybeans:

March soybeans tried to trade higher early with another day of dry weather in Argentina, but gained just two cents at $9.86 1/4 on light volume. This week's forecast has chances for rain in northern Argentina sometime over the weekend, and that will be helpful, if it shows up. It is just interesting that we are nearing the end of January and concerns about Argentina's weather have not gone away yet. Brazil, on the other hand, appears headed to a 4.0 billion bushel harvest, which offers more tough competition for U.S. soybean producers in the months ahead. In spite of soybeans rebound over the past seven sessions, the trend remains down with active buying from commercials offering dissent to traders' more bearish outlook. DTN's National Soybean Index closed at $9.14 Monday, at its highest in a month and priced 70 cents below the March contract.

Wheat:

March Chicago wheat closed down 4 1/4 cents and March K.C. wheat was down 5 1/4 cents, both showing an obvious lack of buying interest on an otherwise quiet day of trading. It is no surprise by now that winter wheat is in a bearish predicament this winter with plenty of supplies available in the U.S. and around the world. Along with that, U.S. wheat exports are down 6% from a year ago, and last year was nothing to brag about. The best that can be said about spot prices near their lowest level in eleven years is that they are cheap enough to entice commercials net long and so far, that has helped keep prices in a sideways trend. In fact, noncommercial traders are so heavily short at these cheap levels that they have become vulnerable to short-covering, should a bullish concern emerge. For now, the market is mostly quiet and sideways, waiting to see how crops look in the spring. DTN's National SRW index closed at $3.95 Monday, priced 31 cents below the March contract and down from its highest price in three months. DTN's National HRW index closed at $3.85, near its highest price in five months.

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

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Todd Hultman