DTN Closing Grain Comments

General Comments:

Corn was up 1 cent in the May contract and up 1/2 cent in the December. Soybeans were down 2 3/4 cents in the May contract and up 3 1/4 cents in the November. Wheat closed down 2 1/4 cents in the May Chicago contract, down 4 cents in the May Kansas City, and up 4 3/4 cents in the May Minneapolis contract. The March U.S. dollar index is down 0.51 at 89.53. April gold is up $16.40 at $1,336.30 while May silver is up 39 cents and May copper is up $0.0325. The Dow Jones Industrial Average is down 18 points at 24,857. April crude oil is down $0.07 at $62.50. April heating oil is up $0.0045 while April RBOB gasoline is down $0.0028 and April natural gas is up $0.043.

CORN:

May corn ended up a penny Tuesday at $3.88 1/4, a new seven-month high after overcoming a lower start. Argentina has been the most obvious source of support for corn prices lately and not much has changed there. Tuesday's satellite map showed light showers in northern Argentina and the seven-day forecast remains mostly dry for the main crop areas. Late Monday, Agricultura Brazil reported 70% of soybeans are harvested in Mato Grosso, so planting of the second corn crop in Brazil is likely on schedule. Here in the U.S., the seven-day forecast is mostly dry for the central and western U.S. Plains with warmer temperatures on the way after Tuesday's winter storm clears out. Thursday's WASDE report is not likely to have much price impact for corn, but it could see reductions in the crop estimates for both Brazil and Argentina. As often happens at this time of year, we are seeing both cash and futures corn prices trending gradually higher while plenty of U.S. corn is in storage, waiting to take advantage of a higher price. DTN's National Corn Index closed at $3.51 Monday, at its highest level in seven months and priced 37 cents below the May contract. There were 213 delivery intentions for March corn early Tuesday with 6,296 contracts still open. In outside markets, the March U.S. dollar index is down 0.51 with news that North Korea is willing to negotiate an end to having nuclear weapons with the U.S., reported the New York Times. Last week's decision to enact tariffs on steel and aluminum is also on traders' minds.

SOYBEANS:

May soybeans closed down 2 3/4 cents at $10.74 3/4 Tuesday, a day of light volume that had little new to trade on. While traders have focused on the ongoing drought in Argentina, Brazil's harvest has made progress and some private sources are predicting another record crop. USDA will update its soybean crop estimates Thursday and Dow Jones' survey expects Brazil's estimate to increase from 112.0 million metric tons to 114.0 mmt (4.2 billion bushels) and Argentina's estimate to be cut from 54.0 mmt to 48.1 mmt (1.9 bb). The tale of two big producing countries having opposite weather conditions has been a bullish surprise in early 2018 and has added confusion to the fundamental outlook for soybeans at a time when U.S. trade relations with China are increasingly hostile. Even so, China still needs some U.S. soybeans and, early Tuesday, USDA said China bought 4.4 million bushels (120,000 mt) for 2017-18. DTN's National Soybean Index closed at $9.98 Monday, at its highest price in over a year and priced 79 cents below the May contract. Early Tuesday, there were 3,395 contracts open for March soybeans, 135 delivery intentions reported for meal and 125 for bean oil.

WHEAT:

May Chicago wheat closed down 2 1/4 cents and May K.C. wheat was down 4 cents at $5.41 1/2, giving back part of Monday's gains while the southwestern U.S. Plains remain dangerously dry with occasional wildfire outbreaks reported. Tuesday's seven-day forecast remains mostly dry up and down the central and western U.S. Plains as Tuesday's winter storm slowly moves eastward. Warmer temperatures are expected to return to the Southern Plains after Wednesday. Because it is difficult to see any significant precipitation in the next ten days or beyond, it is difficult to imagine what might let noncommercial traders caught short off the hook anytime soon (see Tuesday's DTN article, "HRW Wheat's Unexpected Rally"). World wheat supplies are plentiful and U.S. wheat exports are dragging, but the trends in May Chicago and K.C. wheat remain up until proven otherwise. DTN's National SRW Index closed at $4.74 Monday, near its highest price in seven months and priced 36 cents below the May contract. DTN's National HRW Index closed at $4.98, matching its highest price in over two years. Early Tuesday, there were 33 delivery intentions reported against 110 open March K.C. wheat contracts.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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