DTN Early Word Grains
Grain Changes Small, But Green
March corn is up 1 1/4 cents, March soybeans are up 3 1/2 cents, and March K.C. wheat is up 1 1/2 cents.
CME Globex Recap:The world's stock markets are lightly lower overnight and commodities are mixed, but the grain sector is mostly green, showing small gains to start Thursday's action. February crude oil is down 61 cents after the Energy Department reported a 2.7 million barrel drawdown on Wednesday.
OUTSIDE MARKETS:Previous closes on Wednesday showed the Dow Jones Industrial Average up 141.57 at 24,207.16 and the S&P 500 up 5.80 at 2,616.10 while the 10-yr Treasury yield ended at 2.73%. Early Thursday, DJIA futures are down 48 points. Asian markets are lower with Japan's Nikkei 225 down 40.48 (-0.2%) and China's Shanghai Composite down 10.79 points (-(-10.8%). European markets are lower with London's FTSE 100 down 20.75 points (-0.3%), Germany's DAX down 29.27 points (-0.3%), and France's CAC 40 down 11.90 points (-0.25%). The March euro was steady at 1.145 and the March U.S. dollar index was up 0.05 at 95.72. March 30-year T-Bonds were up 8/32nds while February gold was up $0.20 at $1294.00 and February crude oil was down $0.61 at $51.70. Soybeans and meal on China's Dalian Exchange were both down slightly.
| BULL | BEAR | ||
| 1) | The seven-day forecast is still hot and mostly dry for south-central Brazil and flooding has been a problem in northern Argentina -- still stressful to crop conditions. | 1) | Chances for light rains are in this week's forecast for south-central Brazil -- not enough to necessarily rescue dry crops, but enough to give bullish traders pause. |
| 2) | Wednesday's weekly pace of ethanol production picked up to a level slightly more than USDA's ethanol estimate. | 2) | Ongoing concerns about a slowing world economy and negative impact from the ongoing government shutdown are giving investors reason to be cautious. |
| 3) | An end to China's soybean tariff is still possible as trade representatives are set to meet on Jan. 30. | 3) | The March 1 trade deadline is getting closer and there has been no breakthrough reported yet. |
CORN March corn is up 1 1/4 cents early Thursday, keeping March corn futures on a sideways track with little happening this time of year to push prices in either direction. Cash corn prices are maintaining a gradual upward trend as demand has been active enough to encourage higher bids for corn stored away. As many probably know by now, there will be no weekly report of U.S. export sales for a fourth consecutive week due to the government shutdown. There does seem to be growing public pressure for a resolution, but no change to report yet. In South America, Thursday's seven-day forecast continues to look hot and mostly dry for crops in south-central Brazil, a region where much of Brazil's second corn crop will be planted after soybean harvest. For now, March corn remains sideways with resistance at $3.90.
SOYBEANS March soybeans are up 3 1/2 cents early Thursday, also maintaining a sideways trading range in early 2019 in spite of many unanswered questions regarding U.S. soybean demand. Trade representatives from the U.S. and China will meet again on January 30 and the White House is hoping that the threat of more tariffs will lead to a resolution of differences. The gamble has a March 1 deadline and will have such a big impact on soybean prices that the market is a bit paralyzed until more is known. The soybean harvest has begun in Brazil and another big crop is expected, but probably not a record crop, thanks to hot and dry conditions in the south-central region. Short-term, March soybeans are holding sideways, but longer-term bearish concerns are tied to the anticipation of much higher U.S. soybean supplies.
WHEAT March K.C. wheat is up 1 1/2 cents early with small gains also seen in Chicago and Minneapolis. As mentioned above, there is no weekly export sales report again this week and my best guess is that wheat prices would probably not be much different if we did have the reports, but they certainly would be helpful. Futures spreads give us clues about demand and the current reading is moderately bullish for Chicago and Minneapolis wheat, but neutral for K.C. wheat. There is potential for more business as U.S. prices are cheap enough to be competitive, but it is currently looking like the U.S. will have roughly a billion bushels of ending wheat stocks to carry into 2019-20 -- enough to keep potential buyers unmotivated. Colder temperatures are on the way in the U.S. forecast and we may soon find out how nervous shorts are in the market, but winter wheat has seen cold temperatures before. The trend in March K.C. wheat remains sideways for now.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.42 | $0.03 | -$0.32 | Mar | $0.004 |
| Soybeans: | $8.03 | $0.01 | -$0.92 | Mar | -$0.001 |
| SRW Wheat: | $4.88 | $0.01 | -$0.25 | Mar | $0.000 |
| HRW Wheat: | $4.71 | $0.00 | -$0.25 | Mar | $0.004 |
| HRS Wheat: | $5.27 | $0.03 | -$0.38 | Mar | $0.004 |
Todd Hultmancan be reachedat todd.hultman@dtn.com
Toddcan be followed throughout the day on Twitter @ToddHultman1
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