DTN Closing Grain Comments

Soybeans, Spring Wheat Finish Lower on the Week

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

General Comments:

Corn closed down 1/4 cent in the March contract and was down 3/4 cent in the December. Soybeans closed down 6 1/4 cents in the March and down 5 1/2 cents in the November. Wheat closed down 4 1/4 cents in the March Chicago, down 3 3/4 cents in the March Kansas City and down 8 cents in the March Minneapolis.

The March U.S. dollar index is up 0.45 at 88.95. April gold is down $13.00 at $1,334.90 while March silver is down $0.49 and March copper is down 0.0215. The Dow Jones Industrial Average is down 477 at 25,709. March crude oil is down $0.19 at $65.61. March heating oil is down $0.0291, March RBOB gasoline is down $0.0243, and March natural gas is up $0.001.

For the week:

March corn closed up 5 cents and December closed up 3 cents. March soybeans were down 6 3/4 cents in the March while the November was down 3 3/4 cents. March Chicago wheat was up 5 3/4 cents, March Kansas City wheat was up 20 1/4 cents, and March Minneapolis wheat was down 10 3/4 cents.

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Corn:

March corn ended down a quarter-cent Friday, but was up a nickel on the week, supported by active domestic demand and gradually rising cash corn prices. Here in the U.S., cold temperatures have returned to the Corn Belt, and snow is expected to reach as far south as Kansas and Missouri early next week. Precipitation totals are expected to be light for most of the Corn Belt and more moderate on the eastern side. In South America, rain continues to fall across central Brazil while Argentina is dry. Corn yields will likely be lower in Argentina, but so far, Argentina's crop concerns aren't having much impact on corn prices. Fundamentally, heavy corn supplies are keeping prices confined to low levels, but the past few weeks, March corn prices have been rising gradually, in line with their seasonal tendency. DTN's National Corn Index closed at $3.31 Thursday, priced 31 cents below the March contract and near its highest price in five months. In outside markets, the March U.S. dollar index is up 0.45 and Dow Jones futures are over 2% lower after the U.S. Labor Department said nonfarm payrolls increased by 200,000 in January, more than was expected. The unemployment rate was unchanged, at 4.1%.

Soybeans:

March soybeans closed down 6 1/4 cents Friday and were down 6 3/4 cents on the week, pressured by the anticipation of Brazil's next soybean harvest, currently estimated by USDA at 110.0 million metric tons or 4.04 billion bushels. South America's weather pattern should sound familiar by now as central Brazil continues to attract heavy rains while southern Brazil and Argentina are mostly dry the next five days. With commercials net long, but not bidding the front month higher, market clues for soybeans are currently mixed and the trend in March soybeans is broadly sideways. Given the approach of Brazil's big crop and Thursday's new marketing year low of soybean export sales, the tug of war appears to be favoring lower soybean prices ahead with the understanding that Argentina's crop status is still in doubt. DTN's National Soybean Index closed at $9.17 Thursday, down from its highest in over a month and priced 68 cents below the March contract.

Wheat:

March Chicago wheat was down 4 1/4 cents Friday and March Kansas City wheat was down 3 3/4 cents, but both managed to finish higher on the week, thanks to ongoing concerns of dry weather in winter wheat country. The seven-day forecast is expecting snow as far south as Kansas early next week and soft winter wheat in the eastern Midwest has a better chance for moderate precipitation. Overall, the southwestern U.S. Plains are expected to remain mostly dry, even through March. Friday afternoon's CFTC report will be interesting to see how much short-covering took place as of Jan. 30 when prices were at their high for the week. For now, the trend remains up in both winter wheats with conditions expected to remain mostly dry throughout the southwestern U.S. Plains. DTN's National SRW index closed at $4.22 Thursday, priced 29 cents below the March contract and down from its highest price in five months. DTN's National HRW index closed at $4.25, near its highest price in six months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman