DTN Closing Grain Comments

General Comments:

May corn closed up 2 cents per bushel and December corn was up 1 1/4 cents. May soybeans closed down 6 3/4 cents and November soybeans were down 7 1/4 cents. May K.C. wheat closed down 2 cents, May Chicago wheat was down 1/2 cent and May Minneapolis wheat was up 1 cent. The June U.S. dollar index is trading up 0.223 at 96.210. The Dow Jones Industrial Average is down 304.38 points at 25,658.13. April gold is up $3.80 at $1,311.10, May silver is down $0.04 at $15.40 and May copper is down $0.0555 at $2.8505. May crude oil is down $1.14 at $58.84, May heating oil is down $0.0338, May RBOB is down $0.0084 and April natural gas is down $0.054.

For the week:

May corn closed up 5 cents and December 2019 corn was up 4 cents. May soybeans were down 5 1/2 cents while November 2019 soybeans were down 5 cents. May Kansas City wheat was up 2 cents, May Chicago wheat was up 3 3/4 cents, and May Minneapolis wheat was up 17 1/2 cents.

Corn:

May corn ended up 2 cents at $3.78 1/4 Friday and finished the week a nickel higher, getting a modest lift from concerns of widespread flooding as we get closer to planting season. Given the seriousness of the flooding to date as well as expectations for more throughout the Midwest and Northern Plains, the impact on prices so far has been minimal with noncommercials showing no sign of panicking out of their net shorts yet. Next Friday's Grain Stocks and Prospective Plantings reports will be interesting as the March 1 inventory will give us a before-flood picture of corn supplies. Major flooding was taking place in the Western Corn Belt when the planting survey was being conducted so that report will need to be assessed on a state-by-state basis and may not offer much help. Early Friday, USDA said 11.8 mb (300,000 mt) of U.S. corn was sold to China for 2018-19. It was the first daily sales announcement from USDA since March 11 and an unusual purchase from a country that is not known for importing much corn. Fundamentally, the outlook for corn prices is neutral with a lot of uncertainty as to how planting will go in 2019. Technically, the trend in cash corn prices has returned to up. DTN's National Corn Index closed at $3.48 Thursday, 28 cents below the May contract. In outside markets, the June U.S. dollar index is up 0.22 after a manufacturing index for the Eurozone showed contraction in March. Other commodities are mixed to lower with the Dow Jones Industrials down 304 points.

Soybeans:

May soybeans closed down 6 3/4 cents at $9.03 3/4 Friday and were down 5 1/2 cents on the week, still treading water while the U.S. and China remain clinched in trade talks. Top U.S. trade officials are headed to China next week so there continues to be some hope that a deal could be reached. But as we all know, this has been going on for months and there is still no certainty as to how it will turn out. Aside from the trade talks, total soybean export commitments are on track for 1.658 billion bushels, which if true, would add over 200 million bushels to an ending soybean stocks estimate of 900 million bushels for 2018-19 -- already the highest ever. The bullish hope in the market is that a deal will be struck and China will buy lots of U.S. ag products, including soybeans. The bearish risk is if that does not happen, cash soybeans could take out last year's low by harvest time. One bullish clue that is happening in the soy complex is both soybeans and soybean meal prices are holding above support in spite of concerns about lower feed demand related to African swine fever in China and Vietnam. Understanding U.S. soybean prices are heavily dependent on restoring trade with China, the trend in cash soybeans is up. DTN's National Soybean Index closed at $8.23 Thursday, staying in a sideways range and priced $0.88 below the May futures contract.

Wheat:

May K.C. wheat ended down 2 cents at $4.45 Friday, but finished the week 2 cents higher. Since prices dropped to a new contract low on March 11 and attracted noncommercial selling, there has been a quiet rebound in winter wheat prices and not much else happening to promote prices either up or down. The more bullish market behavior has been happening in May Minneapolis wheat as prices failed at two recent attempts to trade lower and are now challenging their 100-day average for the first time since October. The seven-day forecast for the southwestern U.S. Plains has light to moderate showers expected while the Northern Plains are anticipating flooding as winter's snow cover is finally melting. Total U.S. wheat exports are down 4% from a year ago so far in 2018-19. Most of the decline is attributed to HRW wheat where actual shipments are down 26% from a year ago. For now, the trends are down for cash SRW and HRW wheat prices, but their lows in March may stand as support. In cash HRS wheat, prices are still sideways, but challenging the upper end of the range. DTN's National HRW index closed at $4.32 Thursday, up from its lowest price in over a year and down 15 cents from the May futures contract. DTN's National SRW index closed at $4.40 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

(CZ)

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