DTN Closing Grain Comments

Winter Wheat Pushes Higher as Soybeans Fade

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

General Comments:

Corn was up 2 3/4 cents in the May contract and up 1 3/4 cents in the December. Soybeans were down 1 1/2 cents in the May contract and up 2 1/2 cents in the November. Wheat closed up 8 1/2 cents in the May Chicago contract, up 8 3/4 cents in the May Kansas City, and down 3 1/2 cents in the May Minneapolis contract. The March U.S. dollar index is up 0.01 at 89.81. April gold is up $2.60 at $1,332.90 while March silver is up 6 cents and May copper is down $0.0095. The Dow Jones Industrial Average is up 377 points at 25,687. April crude oil is up $0.33 at $63.88. April heating oil is up $0.0164 while April RBOB gasoline is up $0.0159 and April natural gas is up $0.033.

Corn:

May corn closed up 2 3/4 cents at $3.77 1/4 Monday with persistent bullish influence coming from dry crop conditions in Argentina that show no sign of getting better yet. Argentina was dry again over the weekend and the seven-day forecast looks familiar with moderate to heavy rain expected across central Brazil while southern Brazil and Argentina are only anticipating lighter amounts. On the export front, USDA offered a little better news early Monday, saying 51.4 million bushels were inspected for export last week. Monday's total was more than the previous week, but still showed total inspections on a bearish pace of being down 31% from a year ago. USDA also announced 4.9 million bushels (125,000 mt) of U.S. corn were sold to unknown destinations for 2017-18. It is interesting that traders are becoming more bullish about corn prices, likely related to Argentina's weather. Friday's CFTC data showed noncommercials increased net longs in corn from 133,972 to 165,932 as of Feb. 20, the most bullish position since late July. While plenty of corn remains in storage and prices are still cheap, the trend in May corn remains up. DTN's National Corn Index closed at $3.37 Friday, priced 29 cents below the March contract and near its highest price in seven months. In outside markets, the March U.S. dollar index is unchanged in quiet trading and most outside commodities are trading higher.

Soybeans:

May soybeans started higher Monday, but ended down 1 1/2 cents at $10.46, still finding resistance at the old July high of $10.53, even while the seven-day forecast for Argentina and southern Brazil remains mostly dry. May soybean meal prices also started higher and were able to hold a gain of $2.00 for the day as traders appear understandably cautious about pushing new highs while the fundamental situation for soybeans is confusing. Traders did turn more bullish last week, as Friday's CFTC data showed noncommercials increased net longs from 51,163 to 106,866 on Feb. 20. With spot soybeans near their highest prices in six months, commercials gave up the last of their net longs and turned net short for the first time since early December. You may recall that Friday's export sales report showed over 13 million bushels of sales cancellations from China last week. Early Monday, USDA said China came back, buying 4.85 million bushels (132,000 mt) of U.S. soybeans for 2017-18. Fundamentally, the soybean market is difficult to call with mixed factors and plenty of uncertainty yet about demand and South America's harvests. Technically, the trends remain up in both, May soybeans and meal. DTN's National Soybean Index closed at $9.67 Friday, at its highest price in nearly a year and priced 70 cents below the March contract.

Wheat:

Both winter wheat contracts pushed higher Monday with May Chicago wheat up 8 1/2 cents at $4.72 3/4 and May K.C. wheat up 8 3/4 cents at $4.93 1/2. There are two weather concerns in play this week with flooding affecting some SRW wheat acres in the southeastern Midwest and drought remaining a serious problem in the western Plains. Red flag warnings were issued Monday around the Texas Panhandle and western Kansas as windy and dry conditions are making wildfires more likely. It also is not helping that the five-day forecast remains mostly dry for the western Plains. On a bigger scale, the International Grains Council tweeted Monday to say they expect world wheat production to be down 2% in 2018-19. If true, that would offer some help toward trimming the global wheat surplus. Friday's CFTC data showed noncommercials a little more bearish in Chicago wheat, as net shorts increased from 16,435 to 27,458 on Feb. 20. Commercials increased net longs to 35,415. With two more days until meteorological spring, the trends in winter wheat remain up. DTN's National SRW index closed at $4.25 Friday, down from its highest price in six months and priced 28 cents below the March contract. DTN's National HRW index closed at $4.28, also down from its highest price in six months.

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

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(CZ)

Todd Hultman