DTN Closing Grain Comments

Soybeans Survive Trade Talk Threat, End Modestly Lower

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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General Comments:

March corn was down 1 1/2 cents and July corn was down 1 1/4 cents. January soybeans were down 4 cents and July soybeans were down 4 cents. March K.C. wheat closed down 2 1/2 cents, March Chicago wheat was down 2 1/2 cents, and March Minneapolis wheat was down 6 1/4 cents. The December U.S. dollar index is down 0.34 at 96.66. February gold is up $1.30 at $1,243.90 while March silver is down 4 cents and March copper is down $0.0305. The Dow Jones Industrial Average is down 431 points at 24,595. January crude oil is down $1.18 at $51.71. January heating oil is down $0.0271 while January RBOB gasoline is down $0.0043 and January natural gas is down 0.132.


March corn ended 1 1/2 cents lower at $3.82 3/4, surviving an early threat of selling related to soybean news described below. It didn't take long for prices to get quiet and stable again after prices dropped 4 1/4 cents early. Thursday's weather map shows snow from Missouri to Ohio, but overall, late harvest is expected to benefit from dry weather the next seven days, as long as the fields are north of the Ohio River. Earlier Thursday, USDA said 7.8 million bushels (198,120 mt) of U.S. corn were sold to Mexico. 4.2 million bushels (106,680 mt) were for 2018-19 and the remainder (91,440 mt) for 2019-20. The U.S. Census Bureau said exports of U.S. ethanol totaled 175 million gallons in October, up 75% from a year ago, thanks to Brazil, Canada and India. The Bureau also said U.S. corn shipments were up 76% in the first two months of 2018-19 from a year ago. USDA's weekly report of export sales is set for 7:30 a.m. CST Friday morning. For now, the trend in cash corn remains up during this quieter time of year, helped by active exports and a reluctance of farmer selling at harvest prices. The DTN National Corn Index closed at $3.48 Wednesday, its highest prices in five months and 37 cents below the March futures contract. In outside markets, the December U.S. dollar index is down 0.33 and the Dow Jones Industrials are down 400 points, showing concern about trade talks with China after news of the arrest described in the soybean section below.


January soybeans finished down 4 cents at $9.09 1/2, a modest loss after trading down 16 1/2 cents shortly after 8:30 a.m. CST. News that the chief financial officer of a Chinese telecommunication firm, Huawei, was arrested in Canada on Dec. 1, suspected of sending U.S. goods to Iran in violation of sanctions, rocked the boat for soybean prices early Thursday. The Chinese government responded sternly and demanded explanations, raising concerns that the arrest could disrupt the trade talks just as it appeared progress was made earlier this week. The seven-day forecast continues to expect heavy rain for Texas, Oklahoma and all states to the east, adding to hostile conditions for anyone still not finished with soybean harvest. The same forecast is drier and more harvest friendly north of the Ohio River. The U.S. Census Bureau showed U.S. soybean shipments down 38% in the first two months of 2018-19, similar to USDA's weekly export data, which will be updated early Friday. For now, the trend in soybeans remains sideways, yet cash prices have been helped by modest basis improvement and hope for further trade progress. TheDTN National Soybean Index closed at $8.26 Wednesday, its highest level in three months and $0.88 below the January futures contract.


March K.C. wheat ended down 2 1/2 cents at $4.95 1/2 on a quiet day of trade that also saw prices come back from earlier lows. The wheat market seems to continually trade on hopes of higher exports that never quite come within reach. Dow Jones announced Thursday that 12.9 million bushels (350,000 mt) of wheat were sold to Egypt, mostly from Russia and one cargo from Ukraine. The U.S. Census Bureau said U.S. wheat exports in the first five months of 2018-19 were down 20% from a year ago, similar to the path seen in USDA's weekly reports. At the same time, we have seen increased interest for March Chicago wheat in the Mar/May spread and the same for Minneapolis wheat with the Dec/Mar spread trading at a bullish inverse. However, the trend for cash HRW wheat remains down, while cash SRW and HRS prices are struggling to follow up on this week's new highs. The DTN National HRW Index closed at $4.62 Wednesday, 36 cents below the March futures and below former support at $4.50. The DTN National SRW Index closed at $4.86 Wednesday and is still above its support.

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

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Todd Hultman