DTN Closing Grain Comments

Grains Ease Lower in Quiet Trading

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

General Comments:

Corn closed down 1 1/2 cents in the March and down 1 1/4 cents in the July. Soybeans closed down 3/4 cent in the March and down 1 1/4 cents in the July. Wheat closed down 3/4 cent in the March Chicago, up 1/4 cent in the March Kansas City, and down 1 1/4 cents in the March Minneapolis.

The March U.S. dollar index is up .47 at 96.09. April gold is down $9.00 at $1,238.80 while March silver is down .01 and March copper is up $.0225. The Dow Jones Industrial Average is up 230 at 15,890. March crude oil is up $2.80 at $29.01. March heating oil is $.0770 higher, March RBOB gasoline is $.0720 higher, and March natural gas is $0.029 lower.

For the week:

March corn closed down 7 cents while July closed down 7 1/2 cents. March soybeans were up 5 1/4 cents while the July was up 4 cents. March Chicago wheat was down 9 1/4 cents, March Kansas City wheat was down 9 3/4 cents, and March Minneapolis wheat was down 6 1/4 cents.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Corn:

March corn closed moderately lower Friday and lower for the week with prices still weighed down by generally favorable conditions in South America, slow exports, and Tuesday's bearish USDA estimates. Parts of Argentina are still on the dry side, and it will be interesting to see if the rains expected later Friday do provide the wide coverage that is anticipated. Otherwise, there is not much happening to help prices rise as they typically do in this early time of year. March corn continues to trend roughly sideways near their lowest spot price in over five years. DTN's National Corn Index closed at $3.37 Thursday, priced 23 cents below the March contract and still below the 200-day average. In outside markets, the U.S. dollar index is trading up .47 with a little help at the end of the week from the Commerce Department's report of higher-than-expected retail sales in January.

Soybeans:

March soybeans closed slightly lower Friday, but a little higher on the week, thanks to Thursday's surprising rally and boost of support from increasing vegetable oil demand. March soybean oil posted its highest close in 2016 and spot palm oil ended the week with its highest close in over 20 months, the only bright spots in the grain complex at the moment. Higher soybean oil prices don't mean soybeans are headed to $12, but they do help encourage more soybean crush activity. On a more sober note, there seems to be no argument that Brazil is headed for another successful harvest as the local soybean price continues to fall with harvest advancing. According to Informa Economics, Brazil's soybean export price is now 30 cents cheaper than offers at the U.S. gulf -- a discouraging sign for U.S. exports in the next couple of months. March soybeans remain under bearish pressure and are holding sideways. DTN's National Soybean Index closed at $8.26 Thursday, priced 48 cents below the March contract and still below the 200-day average. China returns to business on Monday after this week's New Year celebration.

Wheat:

March Chicago wheat closed a fraction lower Friday and was also lower on the week after USDA reminded us how plentiful both U.S. and world wheat supplies are. Not that a reminder was needed, but the sad truth here in February is that there is not much happening in the world of wheat, so the repeating drumbeat of wheat estimates has become our substitute for real news. Friday afternoon's CFTC data will give us a snapshot of trader positions on Tuesday as Chicago wheat was piercing its contract low. It will be interesting to see if bearish noncommercials took the bait and added to already heavy short positions. There is no bullish argument for wheat prices, but bearish investors could be vulnerable to short-covering this spring, depending on how the winter crop emerges. DTN's National SRW Wheat Index contract closed at $4.18 Thursday, priced 40 cents below the March contract and below the 200-day average. DTN's National HRW Index closed at $3.88, the lowest in over five years. U.S. futures markets will resume trading on Monday evening after taking a break for Presidents Day.

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

Follow Todd Hultman on Twitter @ToddHultman1

(BAS)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Todd Hultman