DTN Closing Grain Comments

General Comments:

Corn closed down 4 cents in the May contract and was down 2 1/2 cents in the December. Soybeans closed up 8 3/4 cents in the May and up 7 1/2 cents in the November. Wheat closed down 11 cents in the May Chicago, down 14 cents in the May Kansas City, and down 3 3/4 cents in the May Minneapolis.

The March U.S. dollar index is up 0.07 at 90.20. April gold is down $4.60 at $1,313.20 while May silver is down $0.12 and May copper is down 0.0215. The Dow Jones Industrial Average is up 88 points at 24,961. April crude oil is up $1.08 at $62.27. April heating oil is up $0.0167, April RBOB gasoline is up $0.0195, and April natural gas is up $0.012.

For the week:

May corn closed down 7 3/4 cents and December was down 3 1/2 cents. May soybeans were up 10 1/4 cents while the November was up 11 cents. May Chicago wheat was down 21 1/2 cents, May Kansas City wheat was down 21 cents, and May Minneapolis wheat was down 5 3/4 cents.

Corn:

May corn fell 4 cents to $3.82 3/4 and has dropped 10.75 cents since USDA came out with a higher export estimate of 2.225 billion bushels (bb) in the March 8 WASDE report. With U.S. corn shipments down 27% from a year ago, there are legitimate doubts about exports reaching USDA's high goal and rain in Friday's seven-day forecast is mostly beneficial for the Corn Belt, except where flooding is a concern along the lower Mississippi River. USDA's Grain Stocks and Prospective Plantings reports are set for March 29 and traders have good reason to question holding their largest position of net longs since June 2016 when bullish arguments are difficult to find. Corn bulls' best friend this winter has been Argentina's unexpected drought and late Thursday, the Buenos Aires Exchange kept its corn crop estimate unchanged, at 34.0 million metric tons (mmt) (1.3 bb). Fundamentally, the new 2018-19 season will start with plenty of old-crop corn in storage, but we can't say much yet about how the new season will go other than moisture levels look mostly favorable around the Corn Belt. Technically, the trend remains up in May corn, but upward momentum has stalled this week. DTN's National Corn Index closed at $3.49 Thursday, priced 38 cents below the May contract and down from its highest price in seven months. In outside markets, the March U.S. dollar index is up 0.07 after U.S. housing starts fell more than expected in February while U.S. industrial production and consumer sentiment both increased more than expected.

Soybeans:

May soybeans closed up 8 3/4 cents at $10.49 1/2 Friday and was also up just over a dime on the week, helped by more dry weather in Argentina. Thursday's report from the Buenos Aires Grain Exchange did acknowledge rain in some parts of the country, but said it was not enough to "revert the water stress of plots" as the exchange kept the soybean crop estimate unchanged at 42.0 mmt (1.5 bb). The seven-day forecast has chances for rain in northeastern Argentina, but not much for the central crop areas. Thursday's crush report from the National Oilseed Processors Association was especially bearish for soybean oil, but May soybean oil actually finished up 0.39 on the week, helped by Friday's news from USDA that 20,000 metric tons of soybean oil were sold to unknown destinations for 2017-18. Technically, May soybean and meal prices have backed down from their highs earlier in March but are still in uptrends. DTN's National Soybean Index closed at $9.62 Thursday, down sharply from its highest price in over a year and priced 79 cents below the May contract.

Wheat:

May Chicago wheat was down 11 cents and May Kansas City wheat was down 14 cents at $4.99 1/2, pressured by moderate showers for much of Kansas in Friday's latest seven-day forecast. No, the anticipated rain is not likely to be a drought breaker, but apparently was enough to prompt noncommercial liquidation and take pressure off the short side of the market at the same time. Looking ahead, this market will continue to struggle with bullish local concerns of drought in the southwestern U.S. Plains versus bearish record global wheat supplies and whatever else we learn when the Northern Hemisphere wheat season gets farther along. For now, the trends in Chicago and K.C. wheat are still up, but short-term momentum has turned down with plenty of bearish concerns in the new season. DTN's National SRW index closed at $4.45 Thursday, priced 34 cents below the May contract and down sharply from its highest price in seven months. DTN's National HRW index closed at $4.70, down sharply from its highest prices in two and a half years.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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