DTN Closing Grain Comments

General Comments:

March corn was up 2 3/4 cents and December 2019 corn was up 2 3/4 cents. March soybeans were up 1 1/4 cents and November 2019 soybeans were unchanged. March K.C. wheat closed steady, March Chicago wheat was up 1 1/2 cents, and March Minneapolis wheat was up 3 cents. The March U.S. dollar index is down 0.01 at 95.66. February gold is up $5.20 at $1,293.60 while March silver is up 1 cent and March copper is up $0.0385. The Dow Jones Industrial Average is up 183 points at 24,248. February crude oil is down $0.15 at $51.96. February heating oil is up $0.0125 while February RBOB gasoline is down $0.0049 and February natural gas is down $0.070.

Corn:

March corn was up 2 3/4 cents at $3.74 Wednesday, a small rebound after Tuesday's 7 1/4 cent drop on higher volume likely washed out some impatient noncommercials. Fundamentally speaking, not a lot has changed lately unless something unexpected is happening with unreported export sales. As DTN Contributing Analyst Elaine Kub explained in Wednesday's "Kub's Den: Corn Customers May Profit..." corn demand is looking stable these days and suggests a price range in 2019 not much different from what we have seen the past four years. Earlier Wednesday, the Energy Department said last week's ethanol production picked up, from 1.000 million to 1.051 million barrels per day, while ethanol inventory inched up to 23.4 million barrels. Spot ethanol prices continue to pressure ethanol margins however, trading near their lowest levels since 2005. There are chances for light rain in south-central Brazil, but the seven-day forecast remains hot and crops continue to be stressed. In spite of Tuesday's lower price, the trend in cash corn remains up, in line with its seasonal tendency. DTN's National Corn Index closed at $3.39 Tuesday, down from its highest price in seven months and 33 cents below the March contract. In outside markets, the March U.S. dollar index is down 0.01 with currency markets not showing much reaction to the defeat of Prime Minister Teresa May's Brexit plan or vote of confidence, which May's party won. Most outside commodities are higher, but February crude oil is down 15 cents.

Soybeans:

March soybeans tested both sides of the market Wednesday and ended with a slight gain of 1 1/4 cents at $8.94 1/2. Soybean prices continue to be in a difficult predicament with a lot of uncertainty as to how trade talks with China will go. Trade representatives meet next on Jan. 30 and the March 1 deadline is not far off. A potential agreement to end China's soybean tariff would have some bullish potential, at least emotionally for the market, but it is still going to take time to alleviate the current soybean surplus. No agreement, on the other hand, could have painfully bearish consequences for soybean prices, especially if good weather were to give the U.S. another big soybean crop in the fall. Meanwhile, chances for light rain in south-central Brazil offer some, but not a lot of, relief to thirsty crops in hot fields. With a great deal of fundamental uncertainty ahead in 2019, the trend for cash soybeans remains sideways. DTN's National Soybean Index closed at $8.02 Tuesday, down from its highest level in five months and $0.91 below the March contract.

Wheat:

March K.C. wheat finished unchanged at $4.95 1/2, maintaining a quiet, sideways trading range for the past month and a half without a lot of news to drive prices either direction. It is possible some U.S. wheat export sales have taken place the past 26 days as U.S. wheat prices are cheap, but there is not much indication from looking at market prices that much business is taking place. Futures spreads show moderate demand interest for Chicago and Minneapolis wheat, but no buying enthusiasm for HRW wheat. Without a big unexpected boost in U.S. wheat exports, USDA will likely have to raise its estimate of U.S. ending wheat stocks back above one billion bushels for 2018-19 -- that is, if we ever see another WASDE report. For now, 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 $4.70 Tuesday, 25 cents below the March contract and staying in the upper half of its three-month trading range. DTN's National SRW Index closed at $4.86, holding above the December low.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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