DTN Closing Grain Comments

General Comments:

Corn closed down 1 cent in the May contract and was down 1/2 cent in the December. Soybeans closed up 3 cents in the May and down 3/4 cent in the November. Wheat closed down 15 1/2 cents in the May Chicago, down 9 3/4 cents in the May Kansas City, and down 14 1/2 cents in the May Minneapolis. The March U.S. dollar index is down 0.33 at 89.95. April gold is up $18.10 at $1,323.30 while May silver is up $0.24 and May copper is up 0.0035. The Dow Jones Industrial Average is up 118 at 24,491. April crude oil is up $0.32 at $61.31. April heating oil is down $0.0050, April RBOB gasoline is down $0.0036, and April natural gas is down $0.002.

For the week:

May corn closed up 10 3/4 cents and December was up 7 cents. May soybeans were up 23 1/2 cents while the November was up 9 1/4 cents. May Chicago wheat was up 35 3/4 cents, May Kansas City wheat was up 49 cents, and May Minneapolis wheat was up 7 cents.

Corn:

May corn closed down a penny Friday at $3.85 1/4, but was up 10 3/4 cents on the week as dry conditions in Argentina still show no sign of going away. It is looking like 2018 will be remembered as the year when La Nina hit Argentina's corn and soybean production, as both crop received 76% poor-to-very-poor ratings from the Buenos Aires Grain Exchange on Thursday. Friday's satellite map showed mostly dry weather in Brazil and Argentina and the latest seven-day forecast for Argentina remains mostly dry, as it has been for several weeks. Here in the U.S., Thursday's new U.S. Drought Monitor showed moisture improvement from eastern Texas to southern Illinois, but the southwestern U.S. Plains continue to show extreme drought with little chance for rain in the seven-day forecast. Friday's slightly lower close in corn may have been influenced by traders' bearish response in general to news of new tariffs and could also have included end-of-week profit-taking, but the trend in May corn remains up as is typical this time of year. DTN's National Corn Index closed at $3.50 Thursday, priced 37 cents below the May contract and at its highest price in seven months. In outside markets, the March U.S. dollar index is down 0.33 and April gold is up $18.10 as traders turn defensive in the face of increasing trade tensions.

Soybeans:

May soybeans were lower most the day, but ended up 3 cents at $10.71 Friday, hanging on to a gain of 23 1/2 cents for the week as crop conditions in Argentina are not expected to get better any time soon. Thursday's new-crop estimate of 44.0 million metric tons (1.6 billion bushels) from the Buenos Aires Grain Exchange is down roughly 500 million bushels from last year's crop and shows how far this La Nina related drought has come. The confusing part early in 2018 has been that Brazil continues to harvest a soybean crop that could be close to last year's record of 4.2 bb. Also, U.S. soybean shipments are down 13% in 2017-18 from a year ago as China has kept its U.S. purchases to a minimum. Last week, China cancelled 13.3 mb of soybean purchases, but activity picked back up this week and, early Friday, USDA said China bought 7.3 mb (198,00 metric tons) of U.S. soybeans and another 4.4 mb (121,000 mt) were sold to unknown destinations, both for 2017-18. Twenty-thousand metric tons of soybean oil were also sold to unknown for 2017-18. Fundamentally, the outlook for soybean prices remains confusing and the trade environment is increasingly hostile. Technically however, the trends are clearly up in May soybeans and meal. DTN's National Soybean Index closed at $9.89 Thursday, at its highest price in over a year and priced 79 cents below the May contract.

Wheat:

May Chicago wheat fell 15 1/2 cents to $5.00 and May K.C. wheat dropped 9 3/4 cents to $5.33 3/4 on Friday, but both held on to impressive gains for the week while short- and long-term forecasts remain mostly dry for the southwestern U.S. Plains. In addition, Friday's weather map showed red flag warnings around eastern Colorado and western Kansas with risk of wildfires at least through Monday. Clearly, weather factors remain bullish for wheat, but the more difficult question: Has this week's rally gone high enough to ease short-covering pressures among noncommercials? Friday's CFTC report should give us another clue later Friday afternoon (unless D.C. office closings due to weather interfere with the report's release). Fundamentally, there is plenty of wheat available around the world and U.S. exports are struggling. Technically, Friday's sell-off may be an early warning that prices went too high, too fast, but the trends are still up in Chicago and K.C. wheat. DTN's National SRW Index closed at $4.78 Thursday, priced 37 cents below the May contract and at its highest price in seven months. DTN's National HRW Index closed at $4.90, at its highest price in seven months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.