DTN Closing Grain Comments

Soybeans Fade at the Finish

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

General Comments:

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

The March U.S. dollar index is down 0.59 at 89.60. April gold is down $23.10 at $1,333.10 while March silver is down27 cents and March copper is down $0.0625. The Dow Jones Industrial Average is down 195 points at 25,024. April crude oil is up $0.45 at $62.00. April heating oil is up $0.0253 while April RBOB gasoline is up $0.0096 and April natural gas is up $0.055.

Corn:

March corn ended down 2 cents Tuesday at $3.65 1/2 after briefly touching a new four-month high of $3.70 earlier in the session. Argentina's weekend was dry again and the seven-day forecast remains mostly dry, expected to be supportive for row-crop prices again this week. This is the time of year U.S. corn exports normally pick up, but there has not been much evidence of that yet. Early Tuesday, USDA said 36.9 million bushels (mb) of corn were inspected for export last week, another bearish showing that has total inspections down 32% in 2017-18 from a year ago. Friday's CFTC data showed noncommercials more bullish in corn as of Feb. 13, increasing net-longs from 48,070 to 133,972 and likely related to Argentina's dry weather. With exports slow and the next U.S. corn planting still months away, there is not much happening to seriously threaten corn prices this early in the year. So far, the trend in March corn remains up, helped by concerns about Argentina's crops. DTN's National Corn Index closed at $3.37 Friday, priced 31 cents below the March contract and at a new six-month high. In outside markets, the March U.S. dollar index is bid up 0.59 while spot 10-year T-note futures are trading near their lowest level in over six years, bolstering the Fed's case for more rate hikes.

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Soybeans:

March soybeans closed up a nickel Tuesday at $10.26 1/2, giving back an earlier gain of 17 1/2 cents in the session. March soybean meal ended $3.20 higher, also down from an earlier gain of $12.20 after traders reacted to Argentina's dry weekend and seven-day forecast. Temperatures will not be as hot as two weeks ago, but it is widely accepted that row crops are being stressed by the lack of moisture. So far, Argentina's problems have not translated into any better export business for the U.S. Early Monday, USDA said last week's export inspections of soybeans totaled 35.3 mb, another bearish showing that has total inspections down 13% in 2017-18 from a year ago. Friday's CFTC data showed noncommercials a little more bullish in soybeans as of Feb. 13, increasing net-longs from 1,893 to 51,163. Even though March futures prices pushed above $10, commercials were still slightly net long, holding 1,026 contracts. Fundamentally, the outlook for soybeans remains a complicated riddle (see "Soybeans Turn Up the Confusion" in Tuesday's DTN). Technically however, the trends are up in both, March soybeans and March soybean meal. DTN's National Soybean Index closed at $9.52 Friday, near its highest prices in six months and priced 70 cents below the March contract.

Wheat:

March Chicago wheat dropped 8 1/2 cents to $4.49 1/4 and March Kansas City wheat ended down 6 3/4 cents, both falling back from multi-month highs with bearish influence from Tuesday's higher U.S. dollar. With plenty of winter wheat left over from 2017, exports continue to lag against tough competition. USDA said 15.5 mb of wheat were inspected for export last week, another neutral showing that has total inspections down 5% in 2017-18 from a year ago. Friday's CFTC data showed noncommercials less bearish in Chicago wheat on Feb. 13, dropping net-shorts from 48,708 to 16,435. Not surprisingly, commercials took advantage of prices near their highest level in three months and reduced net-longs to 22,564. It may be difficult for prices to keep trading higher on dry weather in the southwestern U.S. Plains this early in the year, but for now, the trends remain up for both, Chicago and K.C. wheat. DTN's National SRW index closed at $4.29 Friday, near its highest price in six months and priced 29 cents below the March contract. DTN's National HRW index closed at $4.38, also 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