DTN Closing Grain Comments

Commercials Find Row Crop Bargains

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn closed up 5 cents in the March contract and up 5 1/4 cents in the July. Soybeans closed up 8 cents in the January contract and up 7 1/4 cents in the July. Wheat closed down 3 1/2 cents in the March Chicago contract, up 6 1/4 cents in the March Kansas City, and up 1 1/4 cents in the March Minneapolis contract.

The December U.S. dollar index is up .20 at 100.20. February gold is down $9.20 at $1,065.40 while March silver is up $.04 and March copper is down $.0020. The Dow Jones Industrial Average is down 6 at 17,793. January crude oil is up $.02 at $41.73. January heating oil is down .0106 while January RBOB gasoline is down $.0116 and January natural gas is up .030.

Corn:

March corn closed higher Monday, helped by more bargain-hunting, which lifted prices up from their lowest levels of 2015. Monday's weather map showed rain, snow, and ice over much of the central Plains, making travel difficult in the western half. With much of the corn now stored away, demand becomes the main topic and, so far, export activity is slow. Monday morning, USDA said that last week's inspections of corn for export totaled 11.8 million bushels, a bearishly low amount that suggests another cut in USDA's export estimate ahead. The more bullish news for corn at this time is that prices are successfully holding above the November low of $3.64 1/2, thanks largely to a reluctance of farmer-selling at these low levels. DTN's National Corn Index closed at $3.39 Friday, priced 28 cents below the March contract and will stay below the 200-day average on Monday evening. In outside markets, the December U.S. dollar index is up .20 with more monetary easing expected from the European Central Bank on Thursday. There were no deliveries of December corn reported early Monday. After the close, EPA announced that the mandate for corn-based ethanol in 2016 will be 14.27 billion bushels, more than the 14.0 billion bushels proposed in May and slightly bullish news for corn.

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Soybeans:

January soybeans closed higher with help from commercial buying and unconfirmed talk that Argentina's new soybean policy may not be as bearish as feared. Informa Economics reported that Argentina's new government is planning to reduce the export tax on soybeans from 35% to 30% on December 10 as advanced in this fall's election campaign. Overall, a 30% tax is still prohibitive, even if the official currency is lowered. If Informa is correct, this decision will relieve some of the market's more bearish concerns about soybeans and adds weight to last week's outside weekly reversal as a sign of support. Monday morning, USDA said that last week's inspections of soybeans for export totaled 67.4 million bushels, a neutral amount that is on target with USDA's estimate of 7% fewer exports in 2015-16. After a failed attempt to extend new lows in November, January soybeans continue to trade within their sideways range. DTN's National Soybean Index closed at $8.27 Friday, priced 46 cents below the January contract and below the 200-day average. There were 910 contracts of December soybean oil delivered early Monday, but no deliveries of meal.

Wheat:

March Chicago wheat closed lower Monday, pressured by news from the CBOT that 2,343 contracts of December Chicago wheat were given notice for delivery early Monday. Wheat prices continue to fight against a higher U.S. dollar and slow pace of exports, neither of which appear to be changing. Monday morning, USDA said that last week's inspections of wheat for export totaled 10.1 million bushels, a low amount that keeps wheat exports on a bearish path and likely means another cut in USDA's export estimate ahead. While Chicago wheat prices were under pressure Monday, March K.C. wheat closed up 6 1/4 cents with support from commercial buying and the unwinding of Chicago/K.C. wheat spreads. March Chicago wheat continues to trade within its sideways range with active commercial support below $5.00. DTN's National SRW Wheat Index closed at $4.24 Friday, priced 55 cents below the March contract and will remain below the 200-day average on Monday evening. DTN's National HRW Wheat Index closed at $3.99 Friday, the lowest in over five years.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman