DTN Closing Grain Comments

General Comments:

March corn was down 3/4 cent and December 2019 corn was down 1/2 cent. March soybeans were down 3/4 cent and November 2019 soybeans were up 1/2 cent. March K.C. wheat closed down 1/4 cent, March Chicago wheat was up 2 1/2 cents, and March Minneapolis wheat was up 1/4 cent. The March U.S. dollar index is down 0.45 at 96.00. February gold is up $14.20 at $1,272.30 while March silver is up 14 cents and March copper is down $0.0100. The Dow Jones Industrial Average is down 653 points at 21,792. February crude oil is down $2.08 at $43.51. February heating oil is down $0.0561 while February RBOB gasoline is down $0.0436 and February natural gas is down 27.3 cents.

Corn:

March corn ended down 3/4 cent at $3.77 3/4 on Monday, Christmas Eve. Not surprising, trading was light and outside markets are still exerting bearish influence while the federal government is in a partial shutdown. Earlier Monday, USDA failed to release its weekly inspections report. We will check again to see if it shows up Wednesday. In last Thursday's weekly report, corn showed a marketing-year high of 77.7 million bushels of export sales, putting total export commitments up 17% from a year ago. Offsetting corn's bullish export news, ethanol demand has run into problems with negative profit margins resulting in idling of plants and an ethanol inventory near its record high. Outside markets have also been a bearish influence on grain prices lately with the U.S. stock market and crude oil continuing to make new lows. In spite of the recent weakness in corn, the trend of cash corn prices remains up. DTN's National Corn Index closed at $3.44 Friday, down from its highest price in six months and priced 35 cents below the March contract. In outside markets, the March U.S. dollar index is down 0.45, and the yield on the 10-year T-note is at 2.75%, down from 3.2% in November. Dow Jones futures are down 653 points and February crude oil is over $2.00 lower.

Soybeans:

March soybeans ended down 3/4 cent at $8.97 on light volume Monday, not finding much to trade on other than the bearish influence that continues to be inflicted on investors' portfolios. Aside from a Dow Jones that is down 17% from its October high and shutdown of the federal government, soybean prices still have a 25% tariff from China to deal with. China plus unknown destinations have purchased roughly 3.3 million metric tons (123 million bushels) of soybeans the past two weeks, which is marginally helpful to prices, but still a long way from the 1.02 billion bushels China purchased in 2017-18. MTNewswires.com reported China will lower or end tariffs on more than 700 items on Jan. 1, including alternative meals, which would allow them more non-soybean sources of protein. The U.S. and China are working to have a trade agreement by March 1, but it is difficult to say if it will happen and whether or not it would include an end to China's soybean tariff. For now, the trend in U.S. cash soybeans remains up, in a context of heavy supplies and a high-risk trade environment. DTN's National Soybean Index closed at $8.01 Friday, down from its highest level in four months and priced $0.83 below the January contract.

Wheat:

March K.C. wheat ended down 1/4 cent at $5.02 1/2 Monday, while the Chicago contract was up 2 1/2 cents. There is likely still some disappointment that Russia has shown no sign of curbing exports, and there is not much else to talk about for wheat this time of year. Here in the U.S., the central Plains and southeastern U.S. are expecting precipitation on Wednesday and Thursday, mostly favorable for winter wheat in the southwestern U.S. where temperatures are still above freezing. It will be a few months of watching exports until we start learning about next spring's crops, and so far, for the U.S. there haven't been many exports to watch. For now, the trends in cash hard red winter and hard red spring wheat are sideways, while the trend in cash soft red winter wheat remains up. DTN's National HRW index closed at $4.74 Friday, down from a three-month high and 29 cents below the March contract. DTN's National SRW index closed at $4.85 Friday, down from its four-month high.

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

Follow him on Twitter @ToddHultman1

(CZ)

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