DTN Closing Grain Comments

General Comments:

Corn was up 8 1/2 cents in the May contract and up 8 1/4 cents in the December. Soybeans were up 16 cents in the May contract and up 15 cents in the November. Wheat closed up 9 cents in the May Chicago contract, up 12 1/2 cents in the May Kansas City and up 13 cents in the May Minneapolis contract.

The June U.S. dollar index is up 0.39 at 90.17. June gold is down $11.40 at $1,328.80 while May silver is up 9 cents and May copper is up $0.0535. The Dow is up 166 points at 24,430. May crude oil is steady at $63.37. May heating oil is down $0.0060 while May RBOB gasoline is down $0.0034 and May natural gas is down $0.048.

Corn:

May corn closed up 8 1/2 cents at $3.89 1/2 Thursday, erasing Wednesday's tariff news-related drop as investors showed an easing of trade war concerns across much of the commodity board. Traders may have also heard that the U.S. doesn't sell much corn to China and let prices off Wednesday's bearish hook, at least for now. A more immediate concern for old-crop corn prices is that demand has not been doing well and Tuesday's WASDE report could bring on a higher estimate of U.S. ending stocks, tipped off by USDA's high count of March 1 corn stocks and this season's slow export pace. Early Thursday, USDA said last week's export sales and shipments of corn totaled 35.4 million bushels (mb) and 49.8 mb respectively, a neutral-to-bearish showing for the week. Total corn shipments in 2017-18 stayed down 25% from a year ago with five months remaining. Fundamentally, the outlook for corn is bearish for old-crop and neutral for new-crop. Technically, the trend in new-crop corn is up while the trend in old-crop corn is sideways. DTN's National Corn Index closed at $3.46 Wednesday, down from its highest prices since June 2016 and priced 35 cents below the May contract. In outside markets, the June U.S. dollar index is up 0.39, benefiting from Thursday's modest rebound in the stock market after U.S. officials tried to downplay the impact of the latest tariffs.

Soybeans:

May soybeans closed up 16 cents at $10.31 1/4, supported by commercial buying in both, old and new-crop contracts as Thursday's broad-based buying in commodities tried to erase Wednesday's concerns about an escalating trade war with China. The current trading environment is politically-charged and is likely to be more volatile than usual for this time of year. Back on the ground, U.S. soybean prices still face bearish concerns in Tuesday's WASDE report after USDA found 2.11 billion bushels (bb) of soybeans on hand March 1. Even before China announced a new tariff on soybeans Wednesday, U.S. soybean exports have been struggling. Thursday's weekly report showed 41.6 mb of sales and 21.3 mb of soybean shipments for last week, another bearish combination that still has total shipments down 12% in 2017-18 from a year ago. One odd market clue is Brazil's FOB soybean prices trading 37 cents above those in New Orleans, all at a time when Brazil's ports should be inundated with the new harvest. U.S. soybean prices have numerous bearish concerns, but so far, the trend in November soybeans is up and the trend in May soybeans is sideways. DTN's National Soybean Index closed at $9.41 Wednesday, near its lowest prices in over a month and priced 74 cents below the May contract.

Wheat:

May Chicago wheat closed up 9 cents and May Kansas City wheat closed up 12 1/2 cents Thursday, finding support again from a dry seven-day forecast for the western U.S. Plains and an increase in exceptional drought conditions around the Oklahoma Panhandle. To be fair, Thursday's U.S. Drought Monitor did also note moisture improvement in the Dakotas, central Texas, and parts of Missouri, but the U.S. winter wheat crop remains severely stressed in early 2018. September Minneapolis wheat closed up 14 1/2 cents as cold temperatures and snow in the Northern Plains added to spring wheat planting concerns. Tuesday's WASDE report is likely to show another domestic balance sheet with more than a billion bushels of ending wheat stocks as U.S. demand continues to struggle. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 4.0 mb and 15.7 mb respectively, another bearish week that has total wheat shipments down 9% in 2017-18 with two months remaining. So far, the U.S. winter wheat crop has gotten a lot of attention, but one of these days, winter wheat crops will emerge from dormancy in Europe, Ukraine and southern Russia. In spite of recent gains, the trends remain down for all three wheats. DTN's National SRW index closed at $4.24 Wednesday, near its lowest in over a month and 32 cents below the May contract. DTN's HRW index closed at $4.45, up from its lowest price in two months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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