DTN Closing Grain Comments

General Comments:

Corn closed down 1 1/4 cents in the March contract and down 1 1/4 cents in the July. Soybeans closed up 3/4 cent in the March contract and up 1/2 cent in the July. Wheat closed down 1 cent in the March Chicago contract, down 1/2 cent in the March Kansas City, and up 3/4 cent in the March Minneapolis contract. The March U.S. dollar index is down .55 at 96.03. April gold is down $3.50 at $1,194.40 while March silver is down .08 and March copper is down $.0625. The Dow Jones Industrial Average is down 65 at 15,962. March crude oil is down $1.60 at $28.09. March heating oil is down .0664 while March RBOB gasoline is down $.0466 and March natural gas is down .039.

Corn:

March corn closed a little lower Tuesday after USDA increased its estimate of U.S. ending corn stocks from 1.802 billion to 1.837 billion bushels for 2015-16. The higher estimate was more than officially expected, but in line with general guesses and was largely due to a lower export estimate. USDA's estimate of 2015-16 world ending corn stocks was slightly reduced from 208.94 mmt to 208.81 mmt, but still a little more than expected. The corn crop estimate for Brazil was increased from 81.5 mmt to 84.0 mmt and the estimate for Argentina was increased from 25.6 mmt to 27.0 mmt -- both signs of favorable crop conditions. March corn continues to trade within its sideways range, but still has no bullish fundamental argument to motivate potential buyers. DTN's National Corn Index closed at $3.39 Monday, priced 23 cents below the March contract and will stay below the 200-day average on Tuesday evening. In outside markets, the U.S. dollar index is down .55 with concerns about slow world growth pulling down expectations for more U.S. interest rate increases.

Soybeans:

March soybeans closed slightly higher, even after USDA increased its estimate of U.S. ending soybean stocks from 440 million to 450 million bushels in 2015-16, more than expected and due to a small reduction in the crush estimate while the export estimate was kept unchanged. USDA's estimate of 2015-16 world ending soybean stocks was increased from 79.28 mmt to 80.42 mmt and was also more than expected. Brazil's upcoming soybean crop estimate was kept at 100.0 mmt while Argentina's estimate was increased from 57.0 mmt to 58.5 mmt. While Tuesday's USDA estimates were not surprising to market watchers, they did reinforce the bearish view that South America is headed for another successful harvest season and that is keeping March soybeans under bearish pressure. For now, March soybeans continue to trade within their sideways range and are holding above the November low of $8.47. DTN's National Soybean Index closed at $8.15 Monday, priced 48 cents below the March contract and has been below the 200-day average since mid-August.

Wheat:

March Chicago wheat closed a penny lower after USDA increased its estimate of U.S. ending wheat stocks from 941 million to 966 million bushels for 2015-16. USDA's higher estimate was more than officially expected, but not really a surprise to anyone paying attention as the poor pace of wheat exports is no secret. USDA also increased its estimate of 2015-16 world ending wheat stocks from 232.04 mmt to 238.87 mmt, much more than expected. This was a bearish surprise and came from a 6-mmt reduction in the estimate of China's wheat use, 2 mmt of which was from 2014-15. March Chicago wheat remains under bearish pressure and is challenging its 2016 low of $4.56 with no strong bullish reason for buyers to show up beyond commercials taking advantage of wheat's cheap price. DTN's National SRW Wheat Index closed at $4.17 Monday, priced 41 cents below the March contract and still below the 200-day average. DTN's National HRW Wheat Index closed at $3.89 Monday, 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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