DTN Closing Grain Comments

Black Friday Gives Grains Black Eye

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

General Comments:

Corn closed down 6 3/4 cents in the December and down 5 cents in the July. Soybeans closed down 2 1/4 cents in the January and down 2 cents in the July. Wheat closed down 8 1/2 cents in the March Chicago, down 5 1/2 cents in the March Kansas City, and unchanged in the March Minneapolis. The December U.S. dollar index is up .23 at 100.06. February gold is down $12.70 at $1,057.00 while March silver is down .11 and March copper is up $.0150. The Dow Jones Industrial Average is down 15 at 17,798. January crude oil is down $1.13 at $41.91. January heating oil is $.0431 lower, January RBOB gasoline is $.0149 lower, and January natural gas is $0.086 lower.

For the week:

December corn closed down 4 cents while July closed down 2 1/4 cents. January soybeans were up 15 1/2 cents while the July was up 15 1/2 cents. March Chicago wheat was down 11 cents, March Kansas City wheat was down 4 cents, and March Minneapolis wheat was up 3/4 cent.

Corn:

March corn closed lower Friday, pressured by a U.S. dollar index trading near its highest level in eight months. With Europe still easing and many expecting the U.S. to raise the interest rate in December, the U.S. dollar keeps pushing higher, putting bearish pressure on grains and other commodity prices. USDA said early Friday that last week's export sales and shipments of corn totaled 80.2 million and 20.9 million bushels respectively. The sales number was a new marketing year high, thanks to purchases from Mexico, unknown, and Japan. However, the overall total of sales and shipments in 2015-16 is still down 23% from a year ago. March corn remains under bearish pressure, but is doing well to hold above the November low of $3.64 1/4 with help from commercial bargain-hunting. DTN's National Corn Index closed at $3.46 Wednesday, priced 27 cents below the March contract and will remain below the 200-day average on Friday evening. First notice day for December grain contracts is set for Monday, Nov. 30.

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Soybeans:

January soybeans closed moderately lower Friday, but ended up posting an outside weekly reversal, meaning that after starting at new contract lows early this week, January soybeans closed higher than last week's high. Technically speaking, that is a bullish clue of price behavior that just may be a sign of the commercial support that soybeans have needed to see. The irony here is that it also comes at a time when traders are nervous that Argentina's new leader may make more soybeans available to the market. Also not helping soybeans, the Shanghai Composite Index was down 5.5% overnight after the government announced that it was investigating two of the nation's top brokerage firms. Early Friday, USDA said that last week's export sales and shipments of soybeans totaled 43.1 million and 70.3 million bushels respectively, decent weekly amounts, but total sales and shipments in 2015-16 are still down 17% from a year ago. January soybeans remain under bearish pressure, but it will be interesting to see if Monday's low of $8.44 1/4 can hold. DTN's National Soybean Index closed at $8.30 Wednesday, priced 46 cents below the January contract and will remain below the 200-day average on Friday evening.

Wheat:

March Chicago wheat closed lower Friday, hurt by relentless pressure from the rising U.S. dollar and a lack of bullish argument to inspire buying in this quieter time of year. USDA said Friday that last week's export sales and shipments of wheat totaled 11.2 million and 9.5 million bushels respectively, a bearish combination that keeps total sales and shipments for 2015-16 down 15% from a year ago. Futures spreads also pointed to commercial selling in the December contract on Friday, another bearish indication ahead of first notice day on Monday. With the rising dollar continuing to hurt export sales, wheat prices are at risk of making new lows this winter, but commercial demand should continue to be a supportive force at these fundamentally cheap levels. DTN's National SRW Wheat Index contract closed at $4.36 Wednesday, priced 51 cents below the March contract and below the 200-day average. DTN's National HRW Index closed at $4.06, below the 200-day average since early July.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman