DTN Closing Grain Comments

By Darin Newsom
DTN Senior Analyst

General Comments:

March corn was 1 1/4 cents lower at $3.55 1/4 with December 1 cent lower at $3.88 1/2. March soybeans finished unchanged at $9.92 1/4 with November down 1/2 cent at $10.07. March Chicago wheat closed 1 1/2 cents higher at $4.34 1/2, July Kansas City added 2 1/4 cents to $4.66 1/2, and March Minneapolis gained 3 cents to $6.11. February gold was $6.80 lower at $1,349.50 with March silver off $0.129 and February copper losing $0.0205. The Dow Jones Industrial Average rallied another 116 points to 26,368. March crude oil fell $0.16 to $65.45. The February distillates (heating oil) contract was $0.0074 higher, February RBOB gasoline lost $0.0037, and February natural gas fell $0.055.

Corn:

Corn struggled to get much of anything going over the course of Thursday's session before finally moving lower at the close. Notable was new-crop December's test of technical resistance at $3.91, with the contract posting a high for the day of $3.90 3/4. The fact it couldn't hold, closing at $3.88 1/2, sets the stage for possible follow-through selling in overnight trade. Also, short-term daily stochastics are near the overbought level of 80%, meaning the contract could look at falling back to test the low end of its sideways range at $3.79 1/4 over the coming days.

Soybeans:

From a logistics point of view, Thursday's activity in soybeans is hard to explain. A block order (trade established outside the market and not reportable until 15(?) minutes after completion) near midday, in either March options or futures, sent the market tumbling after it was finally announced. Floor trading veterans were less than impressed with what happened, as former methods of price discovery are being done away with. After an initial 15-cent sell-off by March, and almost 13 cents by new-crop November, the market quickly rallied to regain most of its loss. However, a closing round of sales had the market on the defensive heading into the overnight session. It should also be noted that the lower close established signals, indicating a new minor (short-term) downtrend on the November soybeans daily chart.

Wheat:

Winter wheat markets closed higher Thursday, able to fight off potential spillover selling from corn and soybeans. The key remains new-crop July Kansas City as the contract continues to try and build on technical signals showing an uptrend on its weekly chart. So far, the contract has struggled to move above its previous weekly high of $4.71 1/4, a move that would be a clear indication the trend should be extended. Fundamentally, there is little change, with warm and windy conditions seen across much of the parched Southern Plains HRW growing area. If corn and soybeans move lower overnight, winter wheat contracts could follow.

Darin Newsom can be reached at darin.newsom@dtn.com

Follow Darin Newsom on Twitter @DarinNewsom

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