DTN Closing Grain Comments

Quiet Grains, Quiet Gains

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

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

The March U.S. dollar index is up 0.09 at 95.21. February gold is up $1.80 at $1,289.20 while March silver is up 2 cents and March copper is up 0.0210. The Dow Jones Industrial Average is down 80 points at 23,922. February crude oil is down $1.09 at $51.50. February heating oil is down $0.0308 while February RBOB gasoline is down $0.0322 and February natural gas is up $0.131.

For the week:

March corn closed down 4 3/4 cents and December 2019 corn was down 2 1/2 cents. March soybeans were down 11 1/4 cents while November 2019 soybeans were down 5 cents. March Kansas City wheat was down 1 1/2 cents, March Chicago wheat was down 2 1/2 cents, and March Minneapolis wheat was down 1/4 cent.

Corn:

March corn closed up 2 cents at $3.78 1/4 Friday, but was down 4 3/4 cents on the week. The political heat around the government shutdown is getting turned up as federal employees go without pay checks on day 21 and much has been written already, about USDA postponing Friday's reports. In place of USDA reports, Gro Intelligence released its version of what final crop estimates should look like for 2018, settling on 14.515 billion bushels (bb) for corn, based on a yield of 177.4 bushels an acre instead of USDA's yield estimate of 178.9 bushels. The 111 million bushel trimming of USDA's 14.626 bb estimate is reasonable, given the excessively wet fall conditions, but sometimes USDA sees things differently so we continue to wait for its report. Looking forward, the seven-day forecast remains hot and mostly dry in southern Brazil where part of the second corn crop will eventually be planted after soybeans are harvested. The private firm, Safras & Mercado reduced its corn crop estimate for Brazil on Friday, from 94.9 to 93.4 mmt (3.68 bb). With three weeks of export sales data unreported and active weather concerns in South America, the trend in cash corn remains up. DTN's National Corn Index closed at $3.44 Thursday, down from its highest price in seven months and 33 cents below the March contract. The March U.S. dollar index is up 0.09, rebounding from Wednesday's new two-month low even though the U.S. Labor Department said consumer prices were down 0.1% in December and up just 1.9% from a year ago.

Soybeans:

March soybeans closed up 3 1/2 cents at $9.10 1/4 Friday, but was down 11 1/4 cents on the week, hit by Thursday's big drop. As with corn above, Gro Intelligence put out a final soybean crop estimate of 4.467 bb, down 133 million bushels from USDA's estimate in December. The yield estimate was reduced from USDA's 52.1 bushels to 50.6 bushels an acre. As with corn, the lower crop estimate is reasonable as many soybean areas suffered from too much rain through the fall, but again, there is still a chance USDA will see things differently whenever its own report comes out. The seven-day forecast remains hot and mostly dry in southern Brazil, stressful to soybeans. After Brazil's soybean crop received an estimate of 118.8 mmt from Conab on Thursday, Dow Jones reported the private firm, Safras & Mercado put out a lower estimate of 115.7 mmt (4.25 bb) on Friday. This year's difficulty assessing soybeans comes from trade talks with China that could still go either way. Without more certainty about trade, estimating demand is impossible and the door remains wide open for downside risk. Technically, the trend of cash soybean prices remains sideways with prices not far from their six-month high. DTN's National Soybean Index closed at $8.15 Thursday, down from recent highs and priced $0.91 below the March futures contract.

Wheat:

March K.C. wheat closed up 5 3/4 cents at $5.04 1/2 Friday, finishing the week down 1 1/2 cents. The most likely explanation for Friday's gain is a possible sale of U.S. wheat somewhere, but no such information could be confirmed by the close. It has been widely talked about how U.S. wheat prices are cheap enough to be competitive lately so some business is possible, but of course, we haven't had USDA reporting of export sales for three weeks now. Friday's weather map shows a broad mix of rain and snow around the U.S. Southern Plains that is expected to slowly move eastward into the weekend. The moisture is mostly beneficial to dormant crops this time of year, but keep in mind that Missouri and Arkansas already received heavy amounts in the fall. Trading in wheat continues to be sluggish and inactive, as is typical for the time of year. For cash HRW and HRS wheats, the trends remain sideways, while the trend for cash SRW wheat is up. DTN's National HRW index closed at $4.73 Thursday, closer to its December high and down 26 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

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Todd Hultman