DTN Closing Grain Comments

Row Crops Rally on Smaller Plantings

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

General Comments:

Corn closed up 14 1/4 cents in the May contract and was up 14 1/2 cents in the December. Soybeans closed up 26 3/4 cents in the May and 31 1/4 cents in the November. Wheat closed up 5 1/2 cents in the May Chicago, up 6 1/4 cents in the May Kansas City, and down 11 cents in the May Minneapolis. The June U.S. dollar index is up 0.01 at 89.72. June gold is down $2.10 at $1,327.90 while May silver is up $0.06 and May copper is up 0.0280. The Dow Jones Industrial Average is up 330 points at 24,178. May crude oil is up $0.51 at $64.89. May heating oil is up $0.0114, May RBOB gasoline is up $0.0050, and May natural gas is up $0.044.

For the week:

May corn closed up 10 1/2 cents and December was up 12 1/4 cents. May soybeans were up 16 1/2 cents while the November was up 21 1/4 cents. May Chicago wheat was down 9 1/4 cents, May Kansas City wheat was down 12 cents, and May Minneapolis wheat was down 24 1/4 cents.

Corn:

May corn jumped up 14 1/4 cents to $3.87 3/4 after USDA estimated 2018 corn plantings at 88.0 million acres, down from 90.2 million a year ago and less than was expected. While the planting estimate captured traders' attention, prices tended to ignore the 8.888 billion bushels of record corn stocks that USDA said the U.S. had on hand as of Mar. 1. USDA's total meant corn use was down 262 million bushels in the first half of 2017-18 from a year ago. Speaking of demand, corn exports did not do much better in Thursday's weekly report. USDA said last week's export sales and shipments of corn totaled 53.3 million and 54.2 million bushels, respectively, a neutral-to-bearish combination that has total corn shipments down 25% in 2017-18 from a year ago. Thursday's jump in prices put the short side of the market on its heels, but it will take time to see if May corn is ready to sustain higher prices. DTN's National Corn Index closed at $3.37 Wednesday, at its lowest close in a month and priced 37 cents below the May contract. In outside markets, the June U.S. dollar index has been quiet and is up 0.01 while the Dow Jones futures are up 330 points.

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Soybeans:

May soybeans surged 26 3/4 cents higher to close at $10.44 3/4 after USDA estimated 2018 soybean plantings at a lower-than-expected 89.0 million acres. Not only is the new estimate not the new record high that many expected, if true, it will also be the first time soybean acres outnumbered corn since 1983. As with corn, USDA's 2.107 billion bushels of U.S. soybean stocks on hand as of Mar. 1 was a new record high and more than expected. Soybean use totaled 2.61 billion bushels in the first half of 2017-18, which is down 165 million bushels from a year ago. Much of the demand problem has been with exports and Thursday's weekly report offered no help there. USDA said early Thursday that last week's export sales and shipments of soybeans totaled 11.7 million and 28.8 million bushels, respectively, another bearish combination that showed no current season sales for China. Total soybean shipments are now down 12% in 2017-18 from a year ago. A little later, USDA did say 9.8 million bushels (266,500 mt) of soybeans were sold to unknown destinations for 2017-18. May soybeans' higher close on Thursday may be the start of an upward change in trend for old-crop contracts, but bearish fundamental concerns remain. In the case of November soybeans, Thursday's 31-1/4 cent gain extended the uptrend that was already in place. DTN's National Soybean Index closed at $9.41 Wednesday, at its lowest close in over a month and priced 77 cents below the May contract.

Wheat:

May Chicago wheat closed up 5 1/2 cents and May K.C. wheat closed up 6 1/4 cents, both helped by row crops' bullish influence and a seven-day forecast that remains dry for the southwestern U.S. Plains and wet for the eastern Midwest. USDA estimated 47.3 million acres of all wheat plantings, up from 46.0 million last year, but still near the lowest level in 100 years. Winter wheat acres also remained at a century-low 32.7 million acres while the estimate for spring wheat was bumped up, from 11.0 million acres in 2017 to 12.6 million acres in 2018. Higher spring wheat acres pressured May Minneapolis wheat down 11 cents to a new ten-month low. USDA said U.S. wheat stocks totaled 1.494 billion bushels on Mar. 1, roughly as expected. Wheat use through three quarters of 2017-18 totaled 1.58 billion bushels, which is down 163 million bushels from a year ago. Earlier Thursday, USDA said last week's export sales and shipments of wheat totaled 13.0 million and 12.1 million bushels respectively, another bearish week that has total wheat shipments down 9% from a year ago. In spite of Thursday's higher closes, the trend for all three wheats remains down. DTN's National SRW Index closed at $4.21 Monday, at its lowest in over a month and 34 cents below the May contract. DTN's HRW Index closed at $4.23, at its lowest price in over a month. U.S. futures markets are closed Friday and will re-open Sunday evening.

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

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(CZ)

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Todd Hultman