DTN Closing Grain Comments

Winter Wheat Surges Higher

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

General Comments:

Corn was up 1 3/4 cents in the March contract and up 1 1/4 cents in the December. Soybeans were down 3 1/4 cents in the March contract and down 5 cents in the November. Wheat closed up 14 1/4 cents in the March Chicago contract, up 12 cents in the March Kansas City, and up 4 cents in the March Minneapolis contract.

The March U.S. dollar index is up 0.72 at 90.17. April gold is down $13.10 at $1,316.40 while March silver is down 29 cents and March copper is down $0.0985. The Dow Jones Industrial Average is up 109 points at 25,022. March crude oil is down $1.81 at $61.58. March heating oil is down $0.0546 while March RBOB gasoline is down $0.0460 and March natural gas is down $0.045.

Corn:

March corn closed up 1 3/4 cents at $3.65 1/4 Wednesday, holding near its highest prices in three months ahead of Thursday's WASDE report. Dow Jones' survey expects USDA's estimate of U.S. ending corn stocks to drop slightly, from 2.477 billion bushels (bb) to 2.467 bb for 2017-18. Traders will also be looking at South America's crop estimates. If USDA's attache report is accepted (and it doesn't have to be), Brazil's corn estimate will be lowered from 95.0 million metric tons (mmt) to 92.0 mmt (3.62 bb). Argentina's corn crop is likely to come down modestly from January's estimate of 42.0 mmt (1.65 bb), due to its recent stretch of hot and dry weather. Of course, corn supplies are still plentiful and gains are coming slowly, but the bearish mood has lifted a bit, thanks to more active exports and steady progress in DTN's national cash corn price, now at a six-month high. For now, the trend in March corn remains up, in line with its seasonal tendency. DTN's National Corn Index closed at $3.33 Tuesday, priced 31 cents below the March contract and at its highest price in six months. In outside markets, Dow Jones futures are up $0.72 while most commodities outside of grains were lower.

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Soybeans:

March soybeans ended down 3 1/4 cents Wednesday, hanging on to most of Tuesday's 16 1/2-cent gain with USDA's WASDE report due out at 11 a.m. CST Thursday. Dow Jones' survey expects USDA to increase its estimate of U.S. ending soybean stocks from 470 million bushels to 492 mb, presumably a reflection of slow exports. Another bearish possibility in Thursday's report is that USDA could raise Brazil's soybean crop estimate from 110.0 to 112.5 mmt (4.13 bb), in line with USDA's attache report for Brazil, released Wednesday. Dow Jones expects the estimate for Argentina's soybean crop to come down, from 56.0 mmt to 53.8 mmt (1.98 bb) due to the recent stretch of hot and dry conditions, which are still in effect this week. Fundamentally, the anticipation of Brazil's big crop and lack of U.S. soybean exports in 2017-18 continues to look bearish for soybean prices. Technically, the trend in March soybeans remains broadly sideways, helped by the uncertain outlook for Argentina's dry crops. DTN's National Soybean Index closed at $9.17 Tuesday, holding in its sideways range and priced 69 cents below the March contract.

Wheat:

March Chicago wheat closed up 14 1/4 cents Wednesday at $4.60 1/2, the highest close in over three months. Likewise, March K.C. wheat was up 12 cents at $4.81, a new five-month high. Both contracts continue to be supported by dry winter conditions in the central and western U.S. Plains and also showed evidence of commercial buying throughout the day. The latest seven-day forecast expects rain over the eastern third of the U.S. while much of the western Plains remains dry. In the case of HRW wheat, DTN's national cash price will hit a new six-month high Wednesday evening, a strong sign of where the demand is pointed. Thursday's WASDE report is not likely to show much change in USDA's estimates for wheat. Even though it continues to be too early to know much about the world's 2018 wheat crop, the trends in U.S. winter wheat remain higher, with bearish noncommercials under pressure to liquidate. DTN's National SRW index closed at $4.16 Tuesday, priced 30 cents below the March contract and down from its highest price in five months. DTN's National HRW index closed at $4.28, 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