DTN Closing Grain Comments

General Comments:

March corn closed down 2 3/4 cents per bushel and December corn was down 3 cents. March soybeans closed down 7 1/2 cents and November soybeans were down 5 1/2 cents. March K.C. wheat closed up 3 3/4 cents, March Chicago wheat was up 3 1/2 cents and March Minneapolis wheat was down 2 1/4 cents. The March U.S. dollar index is trading down 0.078 at 95.915. The Dow Jones Industrial Average is down 293.79 points at 24,412.56. February gold is up $1.30 at $1,283.90, March silver is down $0.04 at $15.36 and March copper is down $0.061 at $2.659. February crude oil is down $1.26 at $52.54, February heating oil is down $0.0247, February RBOB is down $0.0460 and February natural gas is down $0.402.

Corn:

March corn was down 2 3/4 cents at $3.79 Tuesday, attracting some selling pressure from moderate shower chances in this week's forecast for south-central Brazil. There has not been much rain in crop areas north of Rio Grande do Sul the past 30 days and temperatures are expected to stay above average. The second corn crop is typically planted in February and, late last week, Dow Jones reported 6% of Brazil's soybeans were harvested. Here in the U.S., winter storms over the weekend in the Midwest and Northeast made travel difficult. Earlier Tuesday, USDA said 43.6 million bushels of corn were inspected for export, keeping total inspections up 61% in 2018-19 from a year ago. Until the federal government opens again, there is not much more we can say about exports, except that the Mar/May futures spread in corn shows no sign of demand interest for the near month. For now, the trend in cash corn remains up, in line with its seasonal tendency. DTN's National Corn Index closed at $3.49 Friday, near its highest price in seven months and 33 cents below the March contract. In outside markets, the U.S. stock market is lower as are most commodities after the International Monetary Fund lowered its estimate of world GDP growth from 3.7% to 3.5%, citing U.S. tariffs as having a depressing impact on economic growth.

Soybeans:

March soybeans ended down 7 1/2 cents at $9.09 1/4 Tuesday, possibly pressured by an article in the Financial Times which talked about the lack of progress between the U.S. and China on the topic of forced technology transfers. As mentioned above, there are chances for moderate showers in south-central Brazil in this week's forecast, but they will be too late for most soybeans and may interrupt harvest, estimated at 6% complete. Earlier Tuesday, USDA said 39.9 million bushels of soybeans were inspected for export last week, the same bearish pace that has total inspections down 40% in 2018-19 from a year ago. For all the talk of China buying some U.S. soybeans the past month, it is difficult to notice much impact on prices and the Mar/May futures spread shows no bullish hint of demand for the front month. It is unfortunate to not have USDA's export sales data or quarterly report of Dec. 1 soybean stocks at this time, but in spite of the lack of data, the estimate of U.S. ending soybeans stocks is likely still near a billion bushels or more for 2018-19. For U.S. soybean demand, a lot is riding on trade talks with China, which start again on Jan. 30. With a great deal of fundamental uncertainty ahead in 2019, the trend for cash soybeans remains sideways. DTN's National Soybean Index closed at $8.24 Friday, down from its highest level in five months and priced $0.93 below the March contract.

Wheat:

March K.C. wheat closed up 3 3/4 cents at $5.09 3/4, helped by unconfirmed reports that Russia may soon limit exports, but also fighting bearish headwinds from Tuesday's outside markets. Also, Bloombergtax.com reported Chinese officials are considering the purchase of up to 7 mmt (257 mb) of U.S. wheat, depending on how trade talks go. The report was based on unnamed sources however, so we have to add it to the rumor list. Tuesday's inspections report from USDA showed slight improvement as last week's 19.0 million bushels put total inspections down 10% in 2018-19 from a year ago. There is still a chance of reaching USDA's 1.000 billion bushel export estimate, but needing 485 million bushels of exports in 19 weeks is a tall order that could be helped by China's rumor, if true. Here in the U.S., the southwestern Plains has a mostly dry forecast east of Missouri with temperatures dipping below freezing the next several weeks -- nothing too threatening at this point. It is a quiet time of year, but U.S. wheat prices have a chance to work a little higher as exports from Ukraine and Russia are expected to taper off the next few months. 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 $4.76 Friday and is staying in the upper half of its three-month trading range. DTN's National SRW Index closed at $4.89, holding above the December low.

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

Follow him on Twitter @ToddHultman

(CZ)

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