DTN Closing Grain Comments

Grains Lower While Winter Storm Erupts

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

General Comments:

Corn closed down 2 1/2 cents in the May contract and was down 2 3/4 cents in the December. Soybeans closed down 6 1/2 cents in the May and down 4 cents in the November. Wheat closed down 8 1/2 cents in the May Chicago, down 11 3/4 cents in the May Kansas City, and down 6 cents in the May Minneapolis. The June U.S. dollar index is up 0.02 at 89.48. June gold is up $5.80 at $1,347.70 while May silver is up 17 cents and May copper is up $0.0045. The Dow Jones Industrial Average is down 63 points at 24,420. May crude oil is up $0.48 at $67.55. May heating oil is up $0.0189 while May RBOB gasoline is up $0.0154 and May natural gas is up $0.049.

For the week:

May corn closed down 2 1/4 cents and December was down 1 3/4 cents. May soybeans were up 20 1/2 cents while the November was up 16 1/4 cents. May Chicago wheat was down 1/4 cent, May Kansas City wheat was down 11 cents, and May Minneapolis wheat was up 10 1/4 cents.

Corn:

May corn fell 2 1/2 cents to $3.86 1/4 Friday and was down 2 1/4 cents on the week as prices lacked motivation to challenge their March highs. Friday's weather map was active with another winter storm forming in the northwestern Plains, threatening blizzard conditions as far south as northwestern Kansas and bringing more rain across the central and Eastern Corn Belt this weekend. Even after the storm moves on, corn-planting progress will remain difficult as Corn Belt temperatures are expected to stay below average for at least the next 14 days. In Brazil, the second corn crop is doing well with variable showers expected in the week ahead. With plenty of old-crop corn still in storage, the trend in May corn remains sideways and spot prices are falling back from the one-year high of $3.94 1/2. The trend in Dec corn is still up, but those prices also turned back from their one-year high this week. DTN's National Corn Index closed at $3.54 Thursday, 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 0.02, staying quietly sideways. Other commodities outside of ag are mostly higher.

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Soybeans:

May soybeans finished down 6 1/2 cents Friday at $10.54 1/4, but were up 20 1/2 cents on the week with support from this week's jump in Brazil's soybean prices. Brazil's FOB price, now at $11.78 a bushel and its highest weekly close since August 2016, showed just how strong China's demand for Brazil's soybeans has been through this time of trade tensions with the U.S. and drought in Argentina. Brazil's rally helped both spot and cash U.S. soybean prices stay near their highest levels in a year and it remains to be seen if new highs will be achieved. In that regard, Nov soybeans have the best chance for a new high with new-crop futures spreads showing strong commercial support for both, soybeans and soybean meal. While the fundamental situation remains bullish for soybean prices outside the U.S., here within the U.S., the outlook is neutral. U.S. soybean exports are down 13% from a year ago, but have a chance to improve as Brazil's higher prices suggest tight supplies down South. Technically, the trend in old-crop soybeans is sideways while the trend remains up in new-crop months. DTN's National Soybean Index closed at $9.89 Thursday, near its highest prices in over a year and priced 72 cents below the May contract.prices suggest tight supplies down South. Technically, the trend in old-crop soybeans is sideways while the trend remains up in new-crop months. DTN's National Soybean Index closed at $9.89 Thursday, near its highest prices in over a year and priced 72 cents below the May contract.

Wheat:

May Chicago wheat dropped 8 1/2 cents and May K.C. wheat fell 11 3/4 cents Friday to $4.95 3/4 as winter wheat prices gave back the week's earlier gains. While drought remains a serious concern in the southwestern U.S. Plains, other wheat regions around the world are starting out in good shape overall and demand for this year's winter wheat has dragged. On top of that, Kansas has a possible chance of rain in the ten-day forecast, which seemed to scare wheat bulls back and helped bring a fourth consecutive lower close to K.C. wheat this week. September Minneapolis wheat closed down 6 3/4 cents Friday, but was able to salvage a 6 3/4 cent gain for the week with support coming from the inability of growers to plant spring wheat while there is snow on the ground in the Northern Plains. As DTN Canadian Grain Analyst Cliff Jamieson pointed out this week, spring wheat has shown an ability to still come through with good yields, even when planted in late May (see "North Dakota Faces a Late Start" from Apr. 11). Fundamentally, the outlook for winter wheat remains bearish with most of the world off to a good start. Technically, the trends remain sideways for all three wheats. DTN's National SRW Index closed at $4.50 Thursday, down from its highest prices in eight months and 31 cents below the May contract. DTN's HRW Index closed at $4.68, down from 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