DTN Closing Grain Comments

Crop Prices Finish Higher After USDA Postpones Reports

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

General Comments:

March corn closed up 3 1/4 cents and December 2019 corn was up 3 cents. March soybeans closed up 8 3/4 cents and November soybeans were up 8 1/2 cents. March K.C. wheat closed up 2 1/2 cents, March Chicago wheat was up 3 1/4 cents and March Minneapolis wheat was up 5 cents. The March U.S. dollar index is down 0.14 at 95.74. February gold is down $9.00 at $1,285.80 while March silver is down 7 cents and March copper is up 0.0810. The Dow Jones Industrial Average is up 762 points at 23,448. February crude oil is up $0.95 at $48.04. February heating oil is up $0.0320 while February RBOB gasoline is up $0.0051 and February natural gas is up $0.086.

For the week:

March corn closed up 7 1/2 cents and December 2019 corn was up 6 1/2 cents. March soybeans were up 26 cents while November 2019 soybeans were up 21 1/4 cents. March Kansas City wheat was up 10 cents, March Chicago wheat was up 5 1/2 cents, and March Minneapolis wheat was up 19 3/4 cents.

Corn:

March corn closed up 3 1/4 cents at $3.83 Friday and was up 7 1/2 cents for the week, continuing to benefit from light rain amounts and hot temperatures in the seven-day forecast for southern Brazil. At the same time, chances for heavy rains remain in the forecast for northern Argentina and that is also a threat to developing row crops as local flooding is possible. Just how much crop totals are being reduced is the question of the moment and USDA announced Friday that their Jan. 11 reports, which would have included crop estimates for Brazil and Argentina, are postponed due to the government shutdown. It was interesting the government did release a weekly energy inventory report and monthly unemployment report on Friday. The Energy Department said ethanol production dropped from 1.042 million to 1.011 million barrels per day last week, while ethanol inventory inched up to 23.2 million barrels. In spite of nervous outside markets this week and a lack of export news, the trend in cash corn remains up. DTN's National Corn Index closed at $3.47 Thursday, back near its highest price in six months and 33 cents below the March contract. Most commodities are higher Friday and the March U.S. dollar index is down 0.14, while the Dow Jones Industrials are up 762 points. The U.S. Labor Department said earlier Friday that nonfarm payrolls were up 312,000 in December, more than expected. The unemployment rate increased from 3.7% to 3.9%.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Soybeans:

March soybeans closed up 8 3/4 cents at $9.21 1/2 and was up 26 cents on the week, an impressive rally, thanks to ongoing concerns about hot and drier conditions in southern Brazil. There has likely also been some export sales the past two weeks, but we, the public, remain in the dark with USDA's reports blocked by the partial government shutdown and Friday's announcement that USDA's Jan. 11 reports will be postponed. As mentioned for corn, the seven-day forecast for southern Brazil expects light rain amounts and more hot temperatures, stressful to row crops. Friday's grain and oilseed prices also received bullish influence from a higher stock market and mostly higher commodity prices. The soybean market continues to be potentially volatile, not just because of missing export sales reports, but also because the U.S. continues to negotiate trade terms with China with the U.S. threatening more tariffs if an agreement is not reached by March 1. Technically, the trend of cash soybean prices remains sideways, but are near their high for December. DTN's National Soybean Index closed at $8.21 Thursday, back near its highest price in four months and priced $0.91 below the March futures contract. Among January contracts early Friday, there were 1,100 delivery intentions of soybeans, 288 of meal and 50 of soybean oil.

Wheat:

March K.C. wheat ended up 2 1/2 cents at $5.06 Friday and was able to post a 10-cent gain on the week. While USDA is not reporting export sales, we suspect some wheat sales may have taken place this week, judging by the observation that U.S. wheat prices had gotten cheap enough to be internationally competitive and by Thursday's firm show of support for all three wheats. Argentina's wheat crop has also had problems of too much rain at harvest and one news outlet reported this week that Algeria rejected a shipment of Argentinian wheat. Technically, both winter wheats did well to trade up from their December lows this week and the gains corresponded to higher prices in Europe also. In the case of HRS wheat, this week's rally likely brought about some noncommercial short-covering, but without weekly CFTC reports, that will not be confirmed until the federal government is operating again. For cash HRW and HRS wheats, the trends are sideways, while the trend for cash SRW wheat remains up. DTN's National HRW Index closed at $4.79 Thursday, closer to its December high and down 25 cents from the March futures contract. DTN's National SRW Index closed at $4.88 Thursday, down from its highest price in three months, but staying well supported.

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

Follow him on Twitter @ToddHultman1

(CZ)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Todd Hultman