DTN Closing Grain Comments

Soy Products End Higher on Mixed Day for Grains

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

General Comments:

Corn was up 1 cent in the May contract and up 2 cents in the December. Soybeans were up 7 3/4 cents in the May contract and up 8 cents in the November. Wheat closed down 4 1/4 cents in the May Chicago contract, down 2 cents in the May Kansas City and up 3/4 cent in the May Minneapolis contract.

The March U.S. dollar index is down 0.21 at 89.66. April gold is up $6.20 at $1,327.00 while May silver is up 8 cents and May copper is up $0.0135. The Dow Jones Industrial Average is down 40 points at 25,138. April crude oil is down $0.70 at $60.66. April heating oil is up $0.0051 while April RBOB gasoline is down $0.0113 and April natural gas is up $0.009.

Corn:

May corn closed up a penny at $3.91 3/4 Tuesday, staying persistently close to its highest prices in six months with ongoing support from Argentina's dry weather and USDA's latest U.S. ending stocks estimate of 2.127 billion bushels. Not much different happened or was learned on Tuesday as the seven-day forecast remains mostly dry for Argentina, except for a chance of moderate showers in the northeastern part of the country. Tuesday's low volume suggests that sellers remain passive in corn early in the year, but drought is still a part of the conversation. Fundamentally, the U.S. has plenty of corn in storage and we will get the next update of March 1 corn stocks from USDA on March 29. Technically, the trend for May corn remains up until proven otherwise. DTN's National Corn Index closed at $3.53 Monday, priced 37 cents below the May contract and within a cent of its July high. There were 441 delivery intentions for March corn early Tuesday and early open interest stood at 1,829 contracts with expiration coming early Wednesday. In outside markets, the March U.S. dollar index is down 0.21 after Tuesday's report from the U.S. Labor Department showed consumer prices up 2.2% from a year ago, as expected and representing no urgent threat for another rate hike at next week's Federal Reserve meeting.

Soybeans:

May soybeans ended up 7 3/4 cents at $10.48 3/4 Tuesday, a modestly higher close on a quiet trading day with assistance from a $5.10 gain in May soybean meal and a 0.47 gain in May bean oil -- two votes for increased crush numbers on Thursday. As mentioned above, the seven-day forecast for Argentina remains mostly dry while the better rain chances stay closer to central Brazil where the harvest seems to be staying on track. It is a little concerning that private consultant, Safras & Mercado estimated Brazil's soybean crop at 117.3 million metric tons (mmt) (4.3 billion bushels) on Monday while USDA and Brazil's government are estimating 113.0 mmt (4.2 bb). However, in spite of Brazil's big soybean crop, which is no secret, and the likelihood that U.S. soybean plantings will total at least 90.0 million in 2018, the trends in May soybeans and meal remain up for now, scarred by last week's bearish change in momentum. DTN's National Soybean Index closed at $9.62 Monday, down from its highest price in over a year and priced 79 cents below the May contract. Early Tuesday, there were no delivery intentions for March contracts of soybeans, four for meal and four for bean oil.

Wheat:

May Chicago wheat ended down 4 1/4 cents and May Kansas City wheat was down 2 cents at $5.20 1/4, settling lower after trading higher most the day. The day started quiet with prices continuing to benefit from a seven-day forecast that shows little chance for rain in the southwestern U.S. Plains. After 10:30 a.m. CDT however, prices began dropping with increased volume, indicating a return to active selling. Even though drought remains a concern and the trends in May Chicago and K.C. wheat are both still up, last week's lower prices brought a bearish change in momentum that may serve as an early warning to noncommercials that turned bullish. Fundamentally, there is plenty of old-crop wheat around the world and technically, the uptrends remain intact, but weather-sensitive. DTN's National SRW index closed at $4.55 Monday, down from its highest price in seven months and 35 cents below the May contract. Early Tuesday, there were nine delivery intentions for March Chicago wheat, three for March K.C. wheat, and four for March Minneapolis wheat. Not many contracts are still trading.

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

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(CZ)

Todd Hultman