DTN Closing Grain Comments

Wind Blows KC Wheat Higher

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

General Comments:

Corn was up 2 cents in the May contract and up 1 3/4 cents in the December. Soybeans were up 6 1/2 cents in the May contract and up 5 cents in the November. Wheat closed up 9 1/4 cents in the May Chicago contract, up 11 3/4 cents in the May Kansas City, and up 4 cents in the May Minneapolis contract. The March U.S. dollar index is up 0.10 at 90.01. April gold is down $3.80 at $1,319.60 while May silver is down 6 cents and May copper is up $0.0040. The Dow Jones Industrial Average is up 235 points at 24,773. April crude oil is up $1.22 at $62.47. April heating oil is up $0.0167 while April RBOB gasoline is up $0.0310 and April natural gas is up $0.009.

Corn:

May corn ended up 2 cents Monday, staying quiet within a 3 1/2 cent range and near its highest prices in seven months. Light shower activity is indicated on Monday's satellite map for central Argentina and light to locally moderate amounts are expected later this week, but not enough to provide any significant relief for crops. More rain is expected in central Brazil where the soybean harvest is making room for the planting of Brazil's second corn crop. Here in the U.S., the northwestern Plains are getting a two-day winter storm with windy conditions and snow making travel difficult. Friday's CFTC data showed noncommercials steadily becoming more bullish in corn, increasing net longs a fifth consecutive week, from 165,932 to 214,492 as of Feb. 27. Fundamentally, the U.S. has plenty of corn in storage and export activity has been slow so far in 2017-18. Monday morning, USDA said 37.3 million bushels of corn were inspected for export last week, bringing total inspections to down 31% from a year ago. Here in early March, the trend remains up, thanks to help from Argentina's dry weather. DTN's National Corn Index closed at $3.49 Friday, priced 37 cents below the May contract and near its highest price in seven months. There were 525 delivery intentions for March corn early Monday. In outside markets, the March U.S. dollar index is fairly quiet, trading up 0.10 while most commodities are trading higher. April crude oil is up $1.22, a combination of increased demand expected in 2018 plus news of a supply disruption in Libya, reported Marketwatch.com.

Soybeans:

May soybeans closed up 6 1/2 cents Monday, at another new contract high of $10.77 1/2 as prices continue to benefit from another weekend of dry weather in Argentina and lack of significant rain in the seven-day forecast. There was some bearish news that soybeans could have responded to, but chose to ignore, at least for now. So far, Brazil's harvest appears to be going well and private consultant, AgRural, estimated Brazil's soybean crop at a new record high of 117.9 million metric tons or 4.3 billion bushels. USDA will give us a new crop estimate on Thursday and Dow Jones' survey of analysts is expecting an increase, from 112.0 mmt to 114.0 mmt or 4.3 bb while the estimate for Argentina is expected to fall, from 54.0 mmt to 48.1 mmt or 1.8 bb. Another bearish concern for soybean prices is this season's sluggish export activity. Monday morning, USDA said 36.4 million bushels of soybeans were inspected for export last week, keeping total inspections down 13% from a year ago. Friday's CFTC data showed noncommercials more bullish in soybeans, increasing net longs a third consecutive week, from 106,866 to 155,357 as of Feb. 27, just as prices were making new highs. In spite of soybeans' bearish concerns, the trends remain up in May soybeans and meal. DTN's National Soybean Index closed at $9.92 Friday, at its highest price in over a year and priced 79 cents below the May contract. Among March contracts, there were 530 delivery intentions for soybeans, 150 for meal, and 402 for bean oil early Monday.

Wheat:

May Chicago wheat closed up 9 1/4 cents and May KC wheat was up 11 3/4 cents at $5.45 1/2 Monday, still finding support from mostly dry forecasts for the southwestern U.S. Plains. While winter storms hit the northwestern Plains with strong winds Monday, red flag warnings were posted in Kansas and Oklahoma as similar winds added to wildfire danger in a winter wheat region that hasn't had rain for months. Friday's CFTC data showed noncommercials a little less bearish in Chicago wheat, holding 15,940 net shorts as of Feb. 27. At the same time, commercials took advantage of prices near their four-month highs and reduced net longs from 35,415 to 23,386. With wheat prices now higher and the rest of the world flush with supplies, U.S. exports have become a difficult sell. Monday morning's report from USDA showed total wheat inspections down 7% in 2017-18 from a year ago, not offering much help moving old-crop supplies. With weather forecasts not seeing drought relief anytime soon for the southwestern Plains, the trends remain up in winter wheat. DTN's National SRW Index closed at $4.63 Friday, down from its highest price in seven months and priced 37 cents below the May contract. DTN's National HRW Index closed at $4.86, near its highest price in seven months. Early Monday, there were 33 delivery intentions for KC wheat.

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

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(CZ)

Todd Hultman