DTN Closing Grain Comments

Winter Wheat, Soybeans Sink Lower Monday

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

General Comments:

Corn was down 3 3/4 cents in the May contract and down 3 1/2 cents in the December. Soybeans were down 12 1/4 cents in the May contract and down 9 1/4 cents in the November. Wheat closed down 10 1/4 cents in the July Chicago contract, down 18 cents in the July Kansas City and down 10 1/2 cents in the July Minneapolis contract.

The June U.S. dollar index is down 0.35 at 89.15. June gold is up $2.80 at $1,350.70 while May silver is up 3 cents and May copper is up $0.0150. The Dow is up 243 points at 24,603. May crude oil is down $1.00 at $66.39. May heating oil is down $0.0237 while May RBOB gasoline is down $0.0222 and May natural gas is up $0.017.

Corn:

May corn closed down 3 3/4 cents Monday at $3.82 1/2 in spite of further planting delays that will come as a result of the weekend's winter storm. Heavy snow was dumped across the Northern Plains and temperatures are expected to remain below average for most of the Corn Belt this week. At the same time, Brazil's second corn crop is doing well with light showers expected in central Brazil this week. It is still not clear if U.S. corn exports will be as large as the 2.225 billion bushels (bb) USDA expects in 2017-18. Monday morning, USDA said 59.2 million bushels (mb) of corn were inspected for export, bringing total inspections to 22% less than a year ago. As far as noncommercial traders are concerned, they are nearly bullish as ever. Friday's CFTC data showed an increase of net-longs to 382,304, the second most bullish position for corn since September 2011. The bearish risk is that it will be difficult to maintain that level enthusiasm if the corn crop eventually gets planted. For now, the trend in May corn remains sideways and the trend in December corn is up. DTN's National Corn Index closed at $3.52 Friday, 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 down 0.35 and Dow Jones futures are up 243 points, not showing much concern over Friday's military strikes into Syria.

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Soybeans:

May soybeans were down 12 1/4 cents to $10.42, unexpectedly showing a bearish response after Monday's bullish crush figures from the National Oilseed Processors Association (NOPA). NOPA estimated 171.9 mb of soybeans crushed in March, a new record high and up 12% from a year ago. Soybean oil stocks at the end of March increased to 1.946 billion pounds. The new total was up 7% from a year ago and put more bearish pressure on May soybean oil, sending prices down $0.30 to a new two-year low of $31.18. The soybean market remains fundamentally divided with tight supplies and rising prices in Brazil while here in the U.S., supplies are comfortable and demand is sluggish. Monday morning, USDA said 16.4 mb of soybeans were inspected for export last week, keeping total inspections down 12% from a year ago. Even so, noncommercial traders remain bullish as Friday's CFTC data showed noncommercials with 210,265 net-longs as of April 10, almost the most since July 2016. For now, the trend in old-crop soybeans is sideways and near the upper end of its trading range. The trend in new-crop soybeans remains up with signs of strong commercial buying interest in future spreads. DTN's National Soybean Index closed at $9.83 Friday, near its highest prices in over a year and priced 71 cents below the May contract.

Wheat:

July Chicago wheat closed down 10 1/4 cents and July Kansas City wheat dropped 18 cents to $4.97, back near April's low after Monday's new seven-day forecast included a broad coverage of rain over the southwestern U.S. Plains later this week. The moisture will be welcome as the region has not had a good rain for roughly six months and Oklahoma has been dealing with recent wildfires. The rain will likely be too little too late for crops in the driest winter wheat areas, but crops in marginal areas could still get a helpful boost. The demand side of winter wheat, however, remains bearish with weak commercial interest and a low pace of exports. USDA said earlier Monday that there were 17.7 mb of wheat inspected for export last week, another bearish amount that has total inspections down 10% in 2017-18. Friday's CFTC data showed noncommercials turned slightly bullish in Chicago wheat as of April 10, holding 5,359 net-longs that they likely regret owning today (if they still have them). Commercials once again showed the wiser approach and took advantage of wheat's highest prices in a month to reduce net-longs from 24,859 to 5,331. For now, the trends remain sideways for all three wheats with winter wheat prices falling back toward the lower end of their trading range. DTN's National SRW index closed at $4.41 Friday, down from 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