DTN Closing Grain Comments

Soybeans Higher, Wheat Lower, Corn Waiting for Spring

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

General Comments:

Corn was up 1 3/4 cents in the May contract and up 1 1/2 cents in the December. Soybeans were up 13 cents in the May contract and up 7 cents in the November. Wheat closed down 6 1/4 cents in the May Chicago contract, down 9 1/4 cents in the May Kansas City and down 6 cents in the May Minneapolis contract.

The June U.S. dollar index is up 0.21 at 89.46. June gold is down $19.70 at $1,340.30 while May silver is down 29 cents and May copper is down $0.0545. The Dow Jones Industrial Average is up 318 points at 24,507. May crude oil is down $0.08 at $66.74. May heating oil is down $0.0134 while May RBOB gasoline is down $0.0184, and May natural gas is up $0.006.

Corn:

May corn closed up 1 3/4 cents Thursday, holding roughly sideways this week while producers continue to wait for warmer, and in some cases, drier planting conditions. Thursday saw warmer temperatures and mostly dry weather across the Corn Belt, but that brief taste of spring will be interrupted by another winter storm from the northwestern Plains on Friday that will bring snow to the northwestern Corn Belt and rain to the central and Eastern Corn Belt over the weekend. Meanwhile, Brazil's second corn crop is off to a good start with drier, but favorable conditions expected in the week ahead. Corn exports have a high bar set for 2017-18, and they are still not certain to achieve USDA's 2.225 billion bushel (bb) goal. Early Thursday, USDA said last week's export sales and shipments of corn totaled, 33.1 million bushels (mb) and 75.3 mb respectively, a bearish sales number, but a new marketing year high for shipments. Total corn shipments are now down 21% in 2017-18 from a year ago with less than five months to go. Technically, the trend remains sideways for old-crop corn and gradually higher for new-crop corn. DTN's National Corn Index closed at $3.53 Wednesday, near its highest prices since June 2016 and priced 34 cents below the May contract. In outside markets, the June U.S. dollar index is up 0.21 after Wednesday's minutes from the Federal Reserve said economic growth strengthened through February. The Dow is up 318 points early Thursday afternoon as concerns about military action against Syria have eased.

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Soybeans:

May soybeans finished 13 cents higher Thursday, supported by commercial buying in both, old-crop and new-crop contracts of soybean and soybean meal. As described in Wednesday's DTN article, "Brazil's Bull Rally in Soybeans," the combination of strong demand from China for Brazil's soybeans plus Argentina's drought, is starting to show more bullish influence on U.S. soybeans prices, especially new-crop and in spite of tariff concerns on U.S. soybeans. While prices show more bullish behavior, U.S. export statistics remain glum. Early Thursday, USDA said last week's export sales and shipments of U.S. soybeans totaled 55.5 mb and 15.4 mb respectively, a neutral-to-bearish showing for the week with total shipments now down 13% from a year ago. More encouraging were the 8.8 mb (240,000 metric tons) of new-crop soybeans sold to Argentina this week -- not a usual customer. USDA is expecting 89.0 million acres (ma) of soybean plantings this spring, but much will depend on how well corn planting goes and any weather issues that may cause prevented acres. As of Thursday's higher close, the trend in old-crop soybeans is up, joining the uptrend in new-crop soybeans already in progress. DTN's National Soybean Index closed at $9.77 Wednesday, near its highest prices in over a year and priced 71 cents below the May contract.

Wheat:

May Chicago wheat closed down 6 1/4 cents and May Kansas City wheat dropped 9 1/4 cents on light volume as the buy side of the market took a step back from Thursday's latest forecast. The seven-day forecast remains dry for the southwestern U.S. Plains, but days eight through 10 have a chance for roughly an inch of rain around parts of Kansas. That is not exactly a drought-breaker, and the forecast may change by the time we get to next weekend, but it was bearish enough to drop prices on Thursday. Speaking of drought, Thursday's U.S. Drought Monitor looked similar to last week, except for a larger area of exceptional drought around the Texas Panhandle. It seems fair to say U.S. wheat exports aren't going to provide any bullish help to wheat prices in 2017-18. USDA said last week's export sales and shipments of wheat totaled 4.4 mb and 16.0 mb respectively, another bearish combination for the week. Total wheat shipments are now down 10% from a year ago and are making no dent in the heavy load of old-crop winter wheat supplies with less than two months remaining in the season. Technically, the trends remains sideways for all three wheats with September Minneapolis wheat staying near its March high. National SRW index closed at $4.55 Wednesday, near its highest prices in eight months and 32 cents below the May contract. DTN's HRW index closed at $4.77, near its highest price in two years.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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Todd Hultman