DTN Closing Grain Comments

Dry Weather Keeps Pushing Soybeans, Wheat Higher

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

General Comments:

Corn was up 1/2 cent in the March contract and up 1 cent in the December. Soybeans were up 7 cents in the March contract and up 3 3/4 cents in the November. Wheat closed up 6 cents in the March Chicago contract, up 8 1/4 cents in the March Kansas City and up 8 1/4 cents in the March Minneapolis contract.

The March U.S. dollar index is down 0.42 at 88.58. April gold is down $1.90 at $1,356.10 while March silver is down 8 cents and March copper is up $0.0095. The Dow Jones Industrial Average is up 204 points at 25,097. April crude oil is up $0.43 at $60.94. April heating oil is up $0.0006 while April RBOB gasoline is up $0.0108 and April natural gas is down $0.021.

Corn:

March corn ended a half-cent higher Thursday on low volume, not finding much reason to get excited as we start the second half of February. Early Thursday, USDA said last week's export sales and shipments of corn totaled 77.7 million bushels (mb) and 34.0 mb respectively. The sales were up from the previous week, thanks to Japan and Mexico, but shipments were a little lower, putting the new shipment total down 29% in 2017-18 from a year ago. One thing going for corn prices is how the seven-day forecast for Argentina remains on the dry side with a chance of light showers Sunday into early next week. The Buenos Aires Grain Exchange reported 57.6% of corn rated poor to very poor in Argentina as of Valentine's Day. Thursday's U.S. Drought Monitor also showed Argentina is not the only concern as moderate drought conditions appeared in southern Illinois this week, just a stone's throw from Ohio's flood watch. It is still too early to know much about how 2018 will turn out, but for now, the trend remains up in both, March and cash corn. DTN's National Corn Index closed at $3.37 Wednesday, its highest price in six months and down 31 cents from the March contract. In outside markets, the March U.S. dollar index is down 0.42, sagging back down near its lowest prices in three years even though Thursday's U.S. producer price index was up 2.7% in January from a year ago.

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Soybeans:

March soybeans closed up 7 cents Thursday at $10.24 1/4, climbing higher a fourth consecutive session while the outlook for Argentina remains mostly dry. Likewise, March soybean meal closed up $3.80, registering its eighth consecutive higher close with traders wondering just how much soybean meal the world's largest exporter will ship in 2017-18. The Buenos Aires Grain Exchange reported 56% of soybeans rated poor to very poor in Argentina as of Wednesday. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 23.5 mb and 50.5 mb respectively, another bearish combination that has total shipments down 13% in 2017-18 from a year ago. Later in the morning, Dow Jones reported the National Oilseed Processors Association said 163.1 mb of U.S. soybeans were crushed in January, up 2% from a year ago, but less than expected. Soybean oil stocks at the end of January totaled 1.73 billion pounds, more than the 1.62 billion pounds expected. Fundamentally, the outlook for soybeans remains confusing with Brazil harvesting a big soybean crop while traders are focused on Argentina. Technically, the trends remain up for both, March soybeans and soybean meal, but down for bean oil. DTN's National Soybean Index closed at $9.48 Wednesday, its highest price in six months and 69 cents below the March contract.

Wheat:

March Chicago wheat closed up 6 cents Thursday and March Kansas City wheat had an even bigger gain of 8 1/4 cents, finishing at $4.78 with Thursday's U.S. Drought Monitor showing worsening drought conditions in parts of central and western Texas. The seven-day forecast continues to show rain from eastern Texas through the eastern Midwest and beyond, but only light amounts for the western U.S. Plains. Like corn, the current uptrend in wheat prices is in conflict with the fundamental outlook as wheat supplies are plentiful and exports have been minimal. USDA said Thursday that last week's export sales and shipments of wheat totaled 11.4 mb and 18.0 mb respectively, another bearish combination that put total shipments down 4% in 2017-18 from a year ago. The catch of course, on the bearish fundamental outlook is that it is based on past harvests, and we are still a long way from knowing how world production will turn out in 2018. For now the trends remain up in winter wheat. DTN's National SRW index closed at $4.27 Wednesday, priced 29 cents below the March contract and down from its highest price in six months. DTN's National HRW index closed at $4.29, also down from 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