DTN Closing Grain Comments

Grains Slide Lower, Rain Expected Down South

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

General Comments:

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

The March U.S. dollar index is down .81 at 96.49. April gold is up $14.00 at $1,155.30 while March silver is up .11 and March copper is up $.0270. The Dow Jones Industrial Average is up 4 at 16,341. March crude oil is down $.63 at $31.65. March heating oil is down .0006 while March RBOB gasoline is up $.0131 and March natural gas is down .069.

Corn:

March corn closed lower Thursday after Brazil's government increased its estimate of the corn crop from 82.3 to 83.3 million metric tons (3.3 billion bushels), more than USDA's current estimate of 81.5 mmt. Brazil has seen a variety of weather this season, but overall conditions remain favorable with light to moderate rain over most areas in this week's forecast. Early Thursday, USDA said that last week's export sales and shipments of corn totaled 44.5 and 26.0 million bushels respectively, both up from a week ago, but still showing 2015-16 exports down 22% from a year ago. Mexico was the top customer once again and has taken over one-third of this season's exports so far. March corn prices appear to be finding long-term support, but so far there is no bullish argument to motivate potential buyers. DTN's National Corn Index closed at $3.48 Wednesday, priced 23 cents below the March contract and will be closely below the 200-day average on Thursday evening. In outside markets, the U.S. dollar index is down .81 at its lowest price in over three months with the U.S. unemployment report due out Friday morning.

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Soybeans:

March soybeans closed lower Thursday, pressured by a favorable forecast for South America and another week of poor export sales. USDA said early Thursday that last week's sales and shipments of soybeans totaled -1.6 and 41.9 million bushels, a bearish combination that shows total exports down 11% in 2015-16. The negative sales were not a surprise after China's cancelled sale was announced a week ago, but it does add to bearish concerns that China is holding back on purchases as South America's crops get closer to harvest. Earlier Thursday, Brazil's government estimated the current soybean crop at 100.9 mmt, slightly above USDA's estimate of 100.0 mmt (3.67 billion bushels). March soybeans remain under bearish pressure, but so far, are still holding in their sideways range, not ready to take a direction. DTN's National Soybean Index closed at $8.30 Wednesday, priced 47 cents below the March contract and has been below the 200-day average since mid-August. Statistics Canada said that canola stocks totaled 12.12 mmt as of December 2015, down 4% from a year ago. DTN Grain Analyst Cliff Jamieson said that Thursday's canola number supports the surprisingly large, 17.2 mmt production estimate released in December.

Wheat:

March Chicago wheat closed lower Thursday after another week of bearish export news. USDA said that last week's export sales and shipments totaled just 2.4 and 8.5 million bushels respectively, a bearish combination that has total exports down 15% in 2015-16 from last year's slow pace. Yemen was the top customer last week, but Nigeria leads the list for 2015-16, taking 21% of U.S. wheat exports so far. North of the border, Statistics Canada said that there were 20.68 mmt of total wheat stocks as of December 2015, down 19% from a year ago and possibly on their way to historic ending lows, said DTN Canada Grains Analyst Cliff Jamieson. March Chicago wheat continues to trade sideways through winter with investors heavily net-short and commercials holding up the other side. DTN's National SRW Wheat Index closed at $4.44 Wednesday, priced 36 cents below the March contract and still below the 200-day average. DTN's National HRW Wheat Index closed at $4.10 Wednesday, staying below the 200-day average since July.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman