DTN Closing Grain Comments

Meal Soars to New Highs, Soybeans Back Above $10

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

General Comments:

Corn was up 5 cents in the March contract and up 4 3/4 cents in the December. Soybeans were up 18 3/4 cents in the March contract and up 14 1/4 cents in the November. Wheat closed up 15 cents in the March Chicago contract, up 12 cents in the March Kansas City and up 6 1/2 cents in the March Minneapolis contract.

The March U.S. dollar index is down 0.24 at 90.09. April gold is up $10.10 at $1,325.80 while March silver is up 39 cents and March copper is up $0.0535. The Dow Jones Industrial Average is up 514 points at 24,705. March crude oil is up $0.62 at $59.82. March heating oil is down $0.0026 while March RBOB gasoline is down $0.0119 and March natural gas is up $0.023.

Corn:

March corn ended up a nickel Monday, erasing Friday's loss and staying near its highest prices in three months with support from dry weather concerns in Argentina. After receiving beneficial showers on Friday in a limited area, the weekend was mostly dry again and is expected to stay that way this week with hot temperatures returning later in the week. In the U.S., the seven-day forecast is mostly dry in the Western Corn Belt, but wet in the Eastern Corn Belt with heavier rain amounts expected along the Ohio River Valley. Friday's CFTC data showed noncommercials turning a little more bullish in corn, increasing net longs from 13,754 to 48,070 as of Feb. 6. Technically, March corn continues to challenge its three-month high, in line with its seasonal uptrend. DTN's National Corn Index closed at $3.32 Friday, priced 30 cents below the March contract and down from its highest price in six months. In outside markets, the Dow Jones Industrial Average is up 514 points in active trading and the March U.S. dollar index is down 0.24 while most other commodities are higher.

Soybeans:

March soybeans closed up 18 3/4 cents Monday at $10.01 3/4, back over the $10 mark as traders continue to weigh the pros and cons of Brazil's big soybean harvest on one hand, and Argentina's shrinking soybean crop on the other hand. Argentina was dry again over the weekend and is expected to stay dry this week with hot temperatures returning. Adding to soybeans' confusion, USDA announced early Monday that China cancelled a previous purchase of 16.7 million bushels (mb), which is 455,000 metric tons (mt) of U.S. soybeans for 2017-18. USDA also said 11.5 mb (314,000 mt) of U.S. soybeans were sold to unknown destinations, 7.3 mb (198,000 mt) of which were for 2017-18 and the rest were for 2018-19. Friday's CFTC data showed noncommercials switched to slightly bullish in soybeans with net-long positions of 1,893 contracts as of Feb. 6. Commercials reduced net longs from 59,188 to 42,036, but are still finding attractive value in the upper $9s. DTN's National Soybean Index closed at $9.14 Friday, holding in its sideways range and priced 69 cents below the March contract.

Wheat:

March Chicago wheat closed up 15 cents at $4.64 and March Kansas City wheat was up 12 cents at $4.77 1/2, both supported by dry winter conditions in the western U.S. Plains. The latest seven-day forecast remains mostly dry for HRW wheat in the southwestern U.S. Plains while SRW wheat in the eastern Midwest has a better chance for precipitation, especially along the Ohio River Valley. In Kansas, the National Weather Service is warning of fire danger on Wednesday when conditions are expected to be warmer and windy. Fundamentally, winter wheat supplies remain plentiful, but technically, the trend remains up as prices continue to take advantage of dry winter concerns and challenge their highest level in three months. Friday's CFTC data showed little change last week as noncommercials in Chicago wheat were still moderately bearish with 48,708 net shorts as of Feb. 6. Commercials in Chicago wheat continue to offer support with 48,300 net longs. DTN's National SRW index closed at $4.19 Friday, priced 30 cents below the March contract and down from its highest price in six months. DTN's National HRW index closed at $4.23, also down from its highest price in over six months.

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

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Todd Hultman