DTN Closing Grain Comments

Soybeans, Meal Higher Again

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

General Comments:

Corn was down 1/4 cent in the March contract and down 1 cent in the December. Soybeans were up 10 cents in the March contract and up 5 cents in the November. Wheat closed down 3 1/4 cents in the March Chicago contract, down 3 cents in the March Kansas City and down 8 1/4 cents in the March Minneapolis contract.

The March U.S. dollar index is down 0.49 at 89.61. April gold is up $3.70 at $1,330.10 while March silver is down 4 cents and March copper is up $0.0740. The Dow Jones Industrial Average is up 65 points at 24,666. March crude oil is down $0.02 at $59.27. March heating oil is down $0.0010 while March RBOB gasoline is up $0.0093 and March natural gas is up $0.062.

Corn:

March corn slipped a quarter cent Tuesday in quiet trade that saw prices stay stubbornly near their highest levels in three months. Argentina's corn crop remains a bullish concern with no rain spotted on Tuesday, and this week's forecast staying mostly dry as warmer temperatures return the next few days. Here in the U.S., the southeastern Corn Belt is expecting heavy rain, but the rest of the region remains drier with only light amounts of moisture expected. With U.S. corn crops stored away for winter and domestic demand staying active, cash corn prices continue to push higher in line with their seasonal tendencies and should have room to go higher before farmer selling becomes more tempting. Fundamentally, corn supplies are plentiful, but technically, the seasonal trend in March corn remains up. DTN's National Corn Index closed at $3.36 Monday, priced 31 cents below the March contract and at a new six-month high. In outside markets, the March U.S. dollar index is down 0.49 as investors show less need to raise cash after last week's sell-off in the stock market.

Soybeans:

March soybeans closed up a dime at $10.11 3/4, their highest close in over two months with support coming from ongoing concerns about Argentina's crop conditions while rain has been sparse. The bullish leader of the soy complex is March soybean meal, which closed up $7.40 at $365.20 on Tuesday, the highest finish in a year and a half. With USDA expecting Brazil's current soybean harvest to eventually total 112.0 million metric tons (mmt) (4.1 billion bushels), the soybean outlook is fundamentally confusing. Technically, however, the trend in March soybeans turned higher on Tuesday's new two-month high, joining the meal uptrend already in progress. Thanks to higher meal prices, the crush incentive in soybeans is now at its highest level since 2002, so we should see a bullish crush report for January in Thursday's report from the National Oilseed Processors Association. DTN's National Soybean Index closed at $9.33 Monday, near its highest prices in six months and priced 69 cents below the March contract.

Wheat:

March Chicago wheat fell back 3 1/4 cents Tuesday to $4.60 3/4 while March K.C. wheat was down 3 cents at $4.74 1/2, unable to attract much interest or trading volume after Monday's double-digit gains. Even though the world has plenty of wheat available in early 2018, this winter's dry conditions throughout the western U.S. Plains has given noncommercial bears something to worry about and the short-covering that resulted has helped Chicago wheat prices rise 50 cents from their lows and K.C. wheat prices rise over 60 cents from theirs. The seven-day forecast is anticipating rain from eastern Texas to the mid-Atlantic coast, which will help some SRW wheat crops, but HRW wheat areas stay mostly dry. The National Weather Service in Dodge City, Kansas, is warning of high fire danger in Kansas on Wednesday when breezy conditions mix with temperatures in the 70s. Drought concerns could change by spring, but so far, the trends remain up in winter wheat. DTN's National SRW index closed at $4.35 Monday, priced 29 cents below the March contract and at its highest price in six months. DTN's National HRW index closed at $4.36, 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