DTN Closing Grain Comments

Grain Prices Firm in Frigid Weather

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
Connect with Todd:
(DTN illustration by Nick Scalise)

General Comments:

March corn closed up 4 cents per bushel and December corn was up 2 3/4 cents. March soybeans closed up 2 cents and November soybeans were up 2 cents. March K.C. wheat closed up 2 cents, March Chicago wheat was up 3 1/4 cents and March Minneapolis wheat was up 3 1/2 cents. The March U.S. dollar index is trading down 0.246 at 95.270. The Dow Jones Industrial Average is up 387.87 points at 24,967.83. February gold is up $6.80 at $1,315.70, March silver is up $0.17 at $16.01 and March copper is up $0.0485 at $2.7735. March crude oil is up $1.26 at $54.57, March heating oil is up $0.0104, March RBOB is up $0.0440 and March natural gas is down $0.036.

Corn:

March corn finished 4 cents higher at $3.81 1/4 Wednesday, quickly erasing Tuesday's loss and continuing to find support in its sideways range. Earlier Wednesday, the Department of Energy reported ethanol production fell last week, from 1.031 million to 1.012 million barrels per day, while ethanol inventory increased from 23.5 million to 24.0 million barrels. Last week's production pace was the annual equivalent of 5.54 billion bushels of corn, which is slightly below USDA's estimate of 5.60 billion bushels. Ethanol inventory near its record high reminds us ethanol demand remains a bearish concern for corn prices after EPA generously handed out waivers to oil companies, including those not financially suffering. Meanwhile, the seven-day forecast in south-central Brazil remains hot and mostly dry as soybeans are being harvested to make way for the second corn crop. Thursday morning, USDA will release export sales data as of Dec. 20, a slow attempt to catch up on five weeks of missing data. For now, the trend in cash corn remains up, in line with its seasonal tendency. DTN's National Corn Index closed at $3.47 Tuesday, near its highest level in seven months and 30 cents below the March contract. In outside markets, Dow Jones Industrials and most commodities are trading higher, bouncing back from Tuesday's lower closes.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Soybeans:

Like many Midwesterners on a frigid Wednesday, soybean prices did not venture far from home. March soybeans ended up 2 cents at $9.21 Wednesday, on light volume. USDA is expected to release one week of old export sales data on Thursday morning and again, the two Thursdays following. On Friday, Feb. 22, USDA will release the remaining export sales data, the same day USDA will also be releasing new-crop estimates at its Ag Outlook Forum in Virginia. That will be a lot of data to sift through on Feb. 22 and we will have complete coverage as the numbers are released. Meanwhile, the latest forecast for south-central Brazil remains hot and mostly dry this week, as harvest shows early progress. Most private estimates for Brazil's soybean crop are coming in below CONAB's Jan. 10 estimate of 118.8 mmt as conditions have remained dry. USDA will weigh in with its own crop estimate in the Feb. 8 WASDE report. As this is being typed, representatives from the U.S. and China are meeting in Washington, D.C., for two days of trade talks, hopefully making some kind of progress to give U.S. soybean demand a needed boost. While a lot is riding on the outcome, the trend for cash soybeans remains sideways. DTN's National Soybean Index closed at $8.29 Tuesday, near the old July high of $8.41 and $0.90 below the March contract.

Wheat:

March K.C. wheat traded both sides of Tuesday's close and ended up 2 cents at $5.02 1/4 on Wednesday. Futures prices remain in a sideways range at this quiet time of year as traders wait for export sales updates. It will also be interesting to get updated Commitments of Traders reports from CFTC, alternated on Tuesdays and Fridays until the data catches up. I suspect noncommercials may still be lightly net long in K.C. wheat futures, but it's much better to have the data than to guess, which is what we've had to do the past five weeks. Wednesday's arctic blast into the central U.S. did reach as far south as southern Missouri and southern Illinois, but the southwestern U.S. Plains were largely protected from sub-zero temperatures. There could have been some damage to the SRW wheat crops, but given winter wheat's hardy reputation, traders are showing no concern on the futures board. 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 $4.76 Tuesday, 24 cents under the March contract and down from its highest prices in four months. DTN's National SRW Index closed at $4.89, down from its highest prices in five months.

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

Follow him on Twitter @ToddHultman1

(CZ)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Todd Hultman