DTN Closing Grain Comments

General Comments:

May corn closed down 2 3/4 cents per bushel and December corn was down 2 1/4 cents. May soybeans closed down 7 1/2 cents and November soybeans were down 6 3/4 cents. May KC wheat closed down 8 1/4 cents, May Chicago wheat was down 3 cents and May Minneapolis wheat was down 4 3/4 cents. The June U.S. dollar index is trading up 0.095 at 97.020. The Dow Jones Industrial Average is up 38.38 points at 26,423.01. June gold is up $1.70 at $1,296.00, May silver is down $0.01 at $15.08 and May copper is down $0.0200 at $2.8900. May crude oil is up $0.87 at $62.97, May heating oil is up $0.0306, May RBOB is up $0.0305 and May natural gas is up $0.017.

For the week:

May corn closed up 6 cents and December 2019 corn was up 5 1/4 cents. May soybeans were up 14 3/4 cents while November 2019 soybeans were up 13 3/4 cents. May Kansas City wheat was up 1 1/4 cents, May Chicago wheat was up 10 cents, and May Minneapolis wheat was down 32 1/4 cents.

Corn:

May corn gave back 2 3/4 cents to $3.62 1/2 Friday, but was still able to salvage a gain of 6 cents on the week. After USDA revealed last Friday's higher-than-expected March 1 corn stocks of 8.605 billion bushels (bb), many will be expecting to see a higher USDA estimate of ending U.S. corn stocks on Tuesday, possibly back above 2.0 bb for 2018-19. Also adding to bearish pressure on U.S. corn prices, favorable weather in South America is increasing competition for corn exports and will likely lead to a slower pace of U.S. exports near the end of this season. Here in the U.S., planting season remains hampered by wet conditions and the current seven-day forecast is not helping. Moderate-to-heavy showers are expected over most of the Corn Belt, including the northwestern Midwest where flooding remains a problem. The six-to-ten day forecast is also not favorable for planting, anticipating below normal temperatures and above normal precipitation for most of the Midwest. Fundamentally, the outlook for corn prices has shifted lower the past month, but remains neutral compared to the previous four years. For now, cash corn prices are chopping sideways as traders largely ignore the potential for planting problems in 2019. DTN's National Corn Index closed at $3.40 Thursday, 25 cents below the May contract. Earlier Friday, the U.S. Labor Department said non-farm payrolls increased by 196,000 in March, more than expected. The U.S. unemployment rate was unchanged at 3.8% in March.

Soybeans:

May soybeans fell 7 1/2 cents to $8.99, quickly erasing almost all of Thursday's hope-filled gain after President Donald Trump had no significant progress to report after his meeting with China's Vice Premier Liu He. According to the Wall Street Journal, U.S. Trade Representative Robert Lighthizer said there are "major, major issues left..." and there was no meeting scheduled with China's President Xi Jinping. Even with the disappointment, May soybeans were able to finish up 14 3/4 cents on the week, rejecting last Friday's new four-month low. Fundamentally, soybeans have numerous bearish hurdles to overcome in 2019, starting with the anticipation for record U.S. ending stocks. As U.S. export shipments are currently down 28% from a year ago, there is a risk USDA will increase its estimate of 900 mb of U.S. ending stocks in the next WASDE report on April 9. The U.S. is also likely to face stiff competition for exports in the months ahead as Brazil and Argentina remain on track for large crops in early 2019. Technically, it has been impressive that both, cash and futures prices have been able to hold sideways for soybeans so far, but bearish concerns remain. DTN's National Soybean Index closed at $8.21 Thursday, holding sideways and $0.86 below the May futures contract.

Wheat:

May K.C. wheat fell 8 1/4 cents to $4.31 1/4 Friday, but ended slightly higher on the week as winter wheat contracts fared better than spring wheat. May Minneapolis wheat closed lower every day this week, finishing near its lowest weekly close in two years at $5.22 1/2. The irony is that before last week, commercials were net long in Minneapolis wheat and the outlook for spring wheat planting is in doubt with flooding across the Dakotas. The western Canadian Prairies are also dry at the start of 2019. Even so, it looks like long spring wheat and short winter wheat spreads were unwound this week, leaving the Minneapolis contract looking for new support. Meanwhile, there is plenty of rain in the seven-day forecast for the SRW wheat crop -- too much in some areas. Part of central Texas is dry, but HRW wheat conditions are favorable overall. Outside of North America, most wheat regions appear to be doing well with some concern of dryness in the North China Plain. Tuesday's WASDE report may show a small increase in USDA's estimate of ending wheat stocks as shipments have not been keeping up with USDA's estimated pace. For now, U.S. wheat supplies are plentiful and the trends for all three cash wheat prices are down. DTN's National HRW Index closed at $4.25 Thursday, up from its lowest price in over a year and down 14 cents from the May futures contract. DTN's National SRW Index closed at $4.46 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 @ToddHultman1

(CZ)

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