DTN Closing Grain Comments

General Comments:

March corn closed down 1/2 cent per bushel and December corn was down 1/4 cent. March soybeans closed down 2 cents and November soybeans were down 2 cents. March K.C. wheat closed down 2 3/4 cents, March Chicago wheat was down 1 1/4 cents and March Minneapolis wheat was down 3/4 cent. The March U.S. dollar index is trading down 0.050 at 95.415. The Dow Jones Industrial Average is down 411.15 points at 24,295.20. February gold is up $4.00 at $1,302.10, March silver is up $0.05 at $15.75 and March copper is down $0.048 at $2.681. March crude oil is down $1.91 at $51.78, March heating oil is down $0.0575, March RBOB is down $0.0619 and March natural gas is down $0.205.

Corn:

March corn ended down a half-cent at $3.79 3/4 Monday, another day of quiet, narrow-range trade. The federal government is open again, at least for now, and USDA has five weeks of export sales data to release, but there has been no word yet as to when that will happen. USDA has said the WASDE report of Feb. 8 will take place and will have updated estimates missed in January. Earlier Monday, USDA said 35.2 million bushels of corn were inspected for export last week, putting total inspections up 56% in 2018-19 from a year ago. With FOB corn prices in New Orleans trading at $4.49, their highest price in five months, it seems likely that corn exports are still active. However, the situation in south-central Brazil appears to be turning less bullish for corn prices with the extended forecast expecting increased chances for precipitation and more moderate temperatures. The trend in cash corn remains up as we near the end of January, in line with its seasonal tendency. DTN's National Corn Index closed at $3.50 Friday, near its highest level in seven months and 31 cents below the March futures contract. In outside markets, the U.S. stock market is down 411 points and several outside commodities are trading lower with concerns about slower world growth. Cattle and hogs were an exception, ending moderately higher as this week's colder temperatures are stressing livestock.

Soybeans:

March soybeans ended down 2 cents at $9.23 1/4 Monday, after threatening a bigger sell-off earlier in the session, but settling for a small drop on light volume. There is likely some nervousness among traders that USDA's missing export sales data won't be enough to drastically change USDA's ending stocks estimate of 955 million bushels for 2018-19, the most on record if it holds true. We will continue to watch for announcements from USDA as to when they will release the data, but have not heard as of the time of this writing. Earlier Monday, USDA said 34.1 million bushels of soybeans were inspected for export last week, putting 2018-19 total inspections 39% below a year ago and far below USDA's estimate for an 11% reduction in exports. Trade talks with China start again on Wednesday, Jan. 30, and some kind of progress will be important to achieve with the March 1 deadline drawing near. The uncertainty level over how talks will turn out remains high and presents a looming bearish concern for soybean prices, if China hangs on to its 25% tariff. For now, the trend for cash soybeans remains sideways. DTN's National Soybean Index closed at $8.35 Friday, near the old July high of $8.41 and f$0.90 below the March futures contract.

Wheat:

March K.C. wheat tried to trade higher early, but closed down 2 3/4 cents at $5.06 3/4, slipping back from last week's challenge of its 100-day average. As with corn, wheat traders will be waiting to see what USDA says about the last five weeks of export sales. U.S. wheat prices are low enough to be competitive and there have been rumors of sales. But, the question is: Are the numbers big enough to lower USDA's estimate of U.S. ending wheat stocks? It seems unlikely and we can say U.S. wheat inspections have certainly not been bullish. USDA said Monday morning that 13.3 million bushels were inspected last week, another bearish amount that has total wheat inspections down 11% in 2018-19 from last year's low total. Here in the U.S., winter wheat crops will be exposed to a few days of colder-than-normal temperatures, thanks to the polar vortex, but so far, traders are showing little sign of concern. For now, the trends in cash HRW and SRW wheats are up, while the trend in cash SRW wheat is sideways. DTN's National HRW Index closed at $4.85 Friday, 24 cents under the March contract and near its highest prices in four months. DTN's National SRW Index closed at $4.96, near its highest prices in five months.

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

Follow him on Twitter @ToddHultman1

(CZ)

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