DTN Closing Grain Comments

General Comments:

March corn was up 4 cents and December 2019 corn was up 2 3/4 cents. March soybeans were up 5 3/4 cents and November 2019 soybeans were up 4 3/4 cents. March K.C. wheat closed up 11 cents, March Chicago wheat was up 7 cents and March Minneapolis wheat was up 11 1/4 cents.

The March U.S. dollar index is down 0.58 at 95.84. February gold is up $9.50 at $1,293.60 while March silver is up 12 cents and March copper is down $0.0430. The Dow Jones Industrial Average is down 542 points at 22,804. February crude oil is up $0.08 at $46.62. February heating oil is up $0.0291 while February RBOB gasoline is up $0.0152 and February natural gas is down 0.3 cents.

Corn:

March corn broke out of its stingy trading pattern and closed up 4 cents at $3.79 3/4 Thursday, likely an indication of strong demand. The government shutdown is on day 13 and there is no sign of a compromise yet. If an agreement isn't reached by Friday, it is likely we will not see USDA's reports of December 1 Grain Stocks, WASDE or Winter Wheat Seedings on January 11 as scheduled. Someday, when the government does reopen, it will be interesting to catch up on the missing weeks of export sales for corn, soybeans and wheat -- especially as there has been unconfirmed talk of China possibly being interested in buying U.S. corn. Meanwhile, the seven-day forecast remains hot and on the drier side for southern Brazil, while heavy rains create a risk of crop damage due to flooding in northern Argentina. Cash corn is currently priced near the mid-point of this year's expected price range and the trend remains up. DTN's National Corn Index closed at $3.43 Wednesday, down from its highest price in six months and priced 33 cents below the March contract. In outside markets, the March U.S. dollar index is down 0.58 after hearing mixed economic news. ISM's index of U.S. manufacturing fell to 54.1 in December, still a sign of growth, but the lowest reading in two years, reported RTTNews.com. ADP also said U.S. private sector employment increased by 271,000 jobs in December, much more than expected.

Soybeans:

March soybeans closed up 5 3/4 cents at $9.12 3/4 Thursday, continuing to find support from hot and dry conditions in southern Brazil, and from ongoing speculation about the possibility of Chinese purchases. Thursday's seven-day forecast for southern Brazil continues to show lighter rain amounts expected with hot temperatures, keeping crops under stress. In northern Argentina, the opposite is happening with heavy rains presenting a risk of flooding. Normally, we would expect updated crop estimates for both Brazil and Argentina in USDA's January 11 WASDE report, but there is a chance the report will be postponed if the federal government doesn't open by Friday. Traders will still watch for January 11 crop estimates from Brazil's CONAB agency. The outlook for soybean prices continues to be potentially volatile with weather risk at play and trade negotiations with China underway, facing a March 1 deadline. For now, the trend in cash soybean prices is sideways with a bearish fundamental outlook. DTN's National Soybean Index closed at $8.15 Wednesday, down from its highest level in four months and priced $0.92 below the March contract. Among January contracts early Thursday, there were 1,091 delivery intentions for soybeans, 514 for meal and 75 for soybean oil.

Wheat:

March K.C. wheat closed up 11 cents at $5.03 1/2 Thursday, finding support near its lowest prices of 2018 and after reaching levels that were competitive with international prices. With the federal government closed, if export sales were involved in Thursday's bullish move, we won't know until later. We can say technically, however, that this is a good area for winter wheat contracts to find support after trading near their lowest prices in several months. The March U.S. dollar index trading down 0.58 on Thursday may have also helped nudge some toward buying U.S. wheat. In the case of spring wheat, commercials have been net-long for most of the past six months and prices recently tested, but did not quite reach their lows of 2018. After Thursday's higher closes, the trends in cash HRW and HRS wheat are still sideways, while the trend in cash SRW wheat remains up. DTN's National HRW index closed at $4.68 Wednesday, down from a three-month high and 25 cents below the March contract. DTN's National SRW index closed at $4.79 Wednesday, 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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