DTN Closing Grain Comments

Grains Finish Higher Friday and For the Week

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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General Comments:

May corn closed up 3 cents per bushel and December corn was up 2 cents. May soybeans closed up 10 3/4 cents and November soybeans were up 9 3/4 cents. May Kansas City wheat closed up 6 1/2 cents, May Chicago wheat was up 9 1/2 cents and May Minneapolis wheat was up 2 1/4 cents.

The June U.S. dollar index is trading down 0.214 at 96.025. The Dow Jones Industrial Average is up 159.20 points at 25,869.14. April gold is up $7.10 at $1,302.20, May silver is up $0.14 at $15.31 and May copper is up $0.0190 at $2.9105. April crude oil is down $0.12 at $58.49, April heating oil is down $0.0130, April RBOB is up $0.0147 and April natural gas is down $0.042.

For the week:

May corn closed up 9 cents and December 2019 corn was up 7 1/2 cents. May soybeans were up 13 1/2 cents while November 2019 soybeans were up 12 cents. May Kansas City wheat was up 12 1/4 cents, May Chicago wheat was up 22 3/4 cents, and May Minneapolis wheat was up 5 1/2 cents.

Corn:

May corn ended up 3 cents at $3.73 1/4 Friday and finished the week up 9 cents, turning higher after posting a new low close on Monday. As mentioned in Friday's article on DTN "Does Corn Still Have a Chance," it is too early in 2019 to be confident about how the new-corn crop season will go and commodity funds are already heavily net short. This week's blizzard and flooding conditions in the Western Corn Belt were another reminder that in many areas, it may be difficult to plant corn at its optimum time this spring or possibly even at all. The bearish case for corn prices continues to come from the anticipation of South America's big crops and their conditions remain favorable with harvest underway in Argentina. Fundamentally, the outlook for corn prices is neutral with the uncertainty of a new season ahead. Technically, May corn futures have found support near their lowest prices in a year, while the trend in cash corn is now sideways, having failed to extend its new low in early March. DTN's National Corn Index closed at $3.42 Thursday, 28 cents below the May contract. In outside markets, the June U.S. dollar index is down 0.21 and most commodities, except for energies are trading higher.

Soybeans:

May soybeans closed up 10 3/4 cents at $9.09 1/4 Friday and were up 13 1/2 cents on the week with no change yet in the standoff over trade between the U.S. and China. Optimism about a trade agreement continues to ebb and flow with every change of headline and Friday's prices may have gotten some help from optimistic comments in China's media that a trade agreement is getting close. Until a decision is reached, soybean prices are likely to keep chopping sideways, as they roughly have since harvest. Conditions in Argentina remain favorable for their soybean crop and late Thursday, the Buenos Aires Grain Exchange maintained its crop estimate of 53.0 million metric tons (mmt) (1.95 billion bushels). This week's winter storms and flooding around the Midwest may be seen as bearish for new-crop soybeans as soybean acres could increase if corn does not get planted in time. On the other hand, increased acres of prevented plantings this spring could also have a bearish impact on soybean acres, so there is still a lot of uncertainty as to how 2019 will play out. According to several sources on Twitter, the National Oilseed Processors Association said 154.50 million bushels of U.S. soybeans were crushed in February, less than expected. Soybean oil stocks at the end of February totaled 1.752 billion pounds, more than expected. For now, the trend is still sideways for both, futures and cash prices. Trade talks with China continue to have a big, potential impact on soybean prices, yet to be determined. DTN's National Soybean Index closed at $8.12 Thursday, staying in a sideways range and priced $0.87 below the May futures contract.

Wheat:

May K.C. wheat closed up 6 1/2 cents at $4.43 Friday and achieved a 12 1/4-cent gain on the week, finding some buying interest owning winter wheat at these lower prices. Friday's weather map looked less threatening for winter wheat areas with calmer winds and mild temperatures across the Southern Plains. May prices for milling wheat in Europe are up a fourth consecutive day, possibly related to concerns of dry weather in North Africa. Other major crop areas around the world are looking mostly favorable so far in 2019, but it is still very early. Fundamentally, it is difficult for U.S. wheat prices to expect much rally when U.S. ending supplies are over a billion bushels and the pace of U.S. exports is slow. Early expectations for increased world production in 2019 do not help prices, but surprises do happen and there is plenty of uncertainty ahead for 2019. The trends are down for cash SRW and HRW wheat prices, while commercial support is helping the trend stay sideways for cash HRS wheat. DTN's National HRW index closed at $4.19 Thursday, up from its lowest price in over a year and down 17 cents from the May futures contract. DTN's National SRW index closed at $4.27 Thursday, also up from its lowest price in over a year.

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

Follow him on Twitter @ToddHultman

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Todd Hultman