DTN Closing Grain Comments

General Comments:

May corn closed down 2 1/4 cents per bushel and December corn was down 1 3/4 cents. May soybeans closed down 1/4 cent and November soybeans were up 1/2 cent. May Kansas City wheat closed up 1 1/4 cents, May Chicago wheat was down 1 1/2 cents and May Minneapolis wheat was down 1 cent.

The March U.S. dollar index is trading up 0.180 at 96.045. The Dow Jones Industrial Average is down 58.05 points at 25,999.93. April gold is down $8.30 at $1,320.20, March silver is down $0.17 at $15.66 and March copper is up $0.0170 at $2.9620. April crude oil is up $1.45 at $56.95, April heating oil is up $0.0253, April RBOB is up $0.0362 and April natural gas is unchanged.

Corn:

May corn tried to trade higher early, but ended down 2 1/4 cents at $3.73 3/4 Wednesday, falling below the old November low on lighter volume. One of the factors holding down corn prices is the anticipation of larger corn harvests in early 2019 from Brazil and Argentina. This week's forecast remains beneficial for both crop areas with broad rain coverage expected over Brazil and moderate-to-locally heavy showers across Argentina. The pace of U.S. corn exports remains above year-ago levels, but has slowed recently. Ethanol demand will continue to be a concern in 2019. Earlier Wednesday, the U.S. Energy Department said production perked back up to 1.028 million barrels per day, while ethanol inventory slipped from 23.9 to 23.7 million barrels. Fundamentally, USDA's new U.S. ending stocks estimate of 1.65 billion bushels for 2019-20 suggests corn prices will stay in the same general range they have traded the past four years. There is, however, plenty of uncertainty in the new season ahead. For now, the trend of cash corn prices remains up with DTN's Corn Index currently having difficulty trading above February's high of $3.52. DTN's National Corn Index closed at $3.41 Tuesday, priced 35 cents below the May contract. In outside markets, the March U.S. dollar index is up 0.18 and other commodities are mixed. April crude oil is up $1.45 a barrel after the Energy Department said crude oil supplies were down 8.6 million barrels last week.

Soybeans:

May soybeans traded higher most the day, but ended down a quarter-cent at $9.16 3/4 Wednesday on lower volume. May soybeans are staying within the same sideways range as the past three months, while negotiations continue between the U.S. and China. Even though recent news reports have sounded promising, prices have yet to take a direction and may not do so until a clear outcome is reached. Meanwhile, according to Dow Jones, AgRural reported Brazil's soybean harvest at 45% complete and exports have already picked up. At the equivalent of $9.57 a bushel, FOB prices at Paranagua are 2 cents higher than at New Orleans and heavily preferred by China while the tariff against U.S. soybeans remains in place. Meanwhile, Argentina's soybean crops are doing well, and this week's forecast for moderate-to-locally heavy rains across the country looks beneficial. 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 $8.20 Tuesday, priced 97 cents below the May contract.

Wheat:

May K.C. wheat bounced higher early Wednesday morning, but closed up just 1 1/4 cents at $4.45 1/2, while May Chicago wheat was down 1 1/2 cents. February has been a bearish month for winter wheat prices, especially after contracts hit new lows and attracted more noncommercial selling. It seems fair to say that the current season's disappointing export pace played a part, as did early expectations for increased world production in 2019. Noncommercials have a bad habit of getting to heavily short at cheap prices, so it will be interesting to keep an eye on CFTC's Commitments of Traders report and also watch for commercials possibly turning net-long. In the meantime, there is still plenty of uncertainty about world wheat crops in 2019. Here in the U.S., a blast of single-digit temperatures pushed into the southwestern U.S. Plains early Wednesday, increasing chances for winterkill. The forecast continues to expect more cold temperatures ahead, keeping winter wheat at risk. 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 $4.17 Tuesday, 27 cents under the May contract and at its lowest price in 10 months. DTN's National SRW index closed at $4.39, also at its lowest price in 10 months.

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

Follow him on Twitter @ToddHultman

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