March corn closed down 4 1/4 cents per bushel and December corn was down 2 1/4 cents. March soybeans closed down 8 cents and November soybeans were down 6 3/4 cents. May Kansas City wheat closed down 6 cents, May Chicago wheat was down 4 1/2 cents and May Minneapolis wheat was up 2 cents.
The March U.S. dollar index is trading down 0.316 at 95.955. The Dow Jones Industrial Average is down 3.00 points at 26,088.95. April gold is down $0.30 at $1,329.20, March silver is unchanged at $15.83 and March copper is down $0.0035 at $2.9415. April crude oil is down $0.01 at $55.47, April heating oil is up $0.0205, April RBOB is up $0.0192 and April natural gas is down $0.010.
May corn dropped 4 cents to $3.76 Tuesday, close to its November low of $3.75, but still holding in a sideways range. Corn prices have come under pressure this week, partly influenced by winter wheat prices falling to new contract lows and partly influenced by favorable crop weather in South America. The latest seven-day forecast expects broad rain coverage across Brazil's crop areas and light to moderate rain amounts in Argentina. Both countries are looking for significant rebounds in corn production from a year ago. Here in the U.S., early corn planting looks out of the question in 2019 as winter is hanging on later than usual, and several areas are dealing with either saturated soils or a potential for flooding when temperatures turn warmer. Expectations for a large soybean surplus in 2018-19 are pointing to higher corn plantings this spring, but it remains to be seen how planting season will go. Fundamentally and seasonally, cash corn prices should have a chance to keep working higher through May, but DTN's National Corn Index is currently showing difficulty trading above February's high of $3.52. DTN's National Corn Index closed at $3.45 Monday, priced 25 cents below the March contract. In outside markets, the March U.S. dollar index is down 0.32 and the yield on 10-year T-notes is down 0.04 at 2.64%, near its lowest level in a year.
May soybeans fell 8 cents to $9.17 Tuesday, coming under bearish pressure after failing to rally Monday in the aftermath of bullish trade news over the weekend. As hopeful as things are looking for an agreement with China, the papers have not been signed yet, so it is understandable for traders not to get too far ahead of the news. It is also fair to say that news reports have been suggesting trade progress for several weeks, making it difficult to know how much anticipation is already built into prices. USDA's attache for Brazil lowered the soybean crop estimate from 117.0 million metric tons (mmt) to 115.5 mmt (4.24 billion bushel) and stayed with the same lower export estimate of 70.0 mmt (2.57 bb) for the new season. Meanwhile, crop conditions are favorable in Argentina with light-to-moderate rains expected this week. Earlier Tuesday, USDA said 1.76 million bushels (mb) (48,000 metric tons) of U.S. soybeans were sold to Mexico for 2018-19 and another 2.65 mb (72,000 mt) for 2019-20. Fundamentally, the news is encouraging that the U.S. and China may be close to a new trade agreement, but the U.S. still has a record high soybean surplus to contend with in 2018-19. For now, both cash and futures soybean prices remain in sideways trends, staying shy of their highest prices in eight months. DTN's National Soybean Index closed at $8.27 Monday, priced 85 cents below the March contract.
May K.C. wheat closed down 6 cents at $4.44 1/4 and May Chicago was down 4 1/2 cents Tuesday, new contract lows again for both. Monday's trade volume was higher, but for the most part, the downward slide in prices happened on low-to-moderate volume, suggesting potential buyers have largely lost their willingness to support prices. Even though world wheat production was modestly lower in 2018, it has been disappointing that U.S. wheat exports have not seen more business. With 29% of the 2018-19 season remaining, total wheat export commitments are down 10% from last year's low pace and that doesn't seem to be changing much. Also, even though it is too early to take too seriously, early estimates anticipate increased world production of wheat in 2019. Late Monday, USDA's NASS released winter wheat crop conditions for several states and most poor-to-very-poor ratings were at 10% or less. Michigan was the most problematic with 29% of crops rated either poor or very poor. With the uncertainty of a new growing season ahead, the trends in cash hard red winter (HRW) wheat and soft red winter (SRW) wheat are down, while the trend in cash hard red spring(HRS) wheat remains sideways. DTN's National HRW index closed at $4.24 Monday, 19 cents under the March contract and at its lowest prices in 10 months. DTN's National SRW index closed at $4.43, at its lowest price in 10 months.
Todd Hultman can be reached at firstname.lastname@example.org
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