Cash Wheat Trend


DTN reports:

While a winter storm is brewing in the western U.S. Plains, May contracts of corn and soybeans held slightly higher in quiet trade. All three wheats fell back from Tuesday’s big gains, ignoring a fourth consecutive day of lower trading in the U.S. dollar.


After a volatile start to the week, May K.C. wheat closed down 6 cents Wednesday at $4.36 3/4, still a part of the downtrend that started in early February. Wednesday’s weather map showed plenty of rain across the southwestern U.S. Plains, followed by high winds and warmer, spring-like temperatures. The rain will also spread eastward to SRW wheat areas on Thursday. Early crop ratings in Kansas are favorable with only 9% of the crop rated either poor or very poor, but it is still very early in the new season. The main bearish pressure on wheat prices continues to be the lack of U.S. exports and, even though prices are cheap, the export pace is unlikely to make much dent in ending supplies. With U.S. wheat supplies plentiful and the uncertainty of a new growing season ahead, the trends in cash HRW and SRW wheat remain down, while the trend in cash HRS wheat is sideways. DTN’s National HRW Index closed at $4.24 Tuesday, 19 cents under the May contract and up from its lowest prices in a year. DTN’s National SRW Index closed at $4.28, up from its lowest prices in 11 months. Trading in March grain contracts expires on Thursday, March 14.



May corn closed up 3/4 cent at $3.66 1/2 Thursday, finding slight support after falling to a new contract low Monday and possibly also helped by unconfirmed talk of Chinese buying interest in U.S. corn. Crop conditions in South America remain bearish for prices with mostly beneficial rain in this week’s forecasts for both, Brazil and Argentina. Here in the U.S., corn planting in 2019 remains a concern with wet conditions in most crop areas. Wednesday’s weather map shows rain in the western Plains and a winter storm brewing, expected to turn into a blizzard in the northwestern Plains later Wednesday and into Thursday. Drier conditions are expected in the 6- to 10-day period, what many fields need before planting. Fundamentally, cash corn should still have a chance to trade higher before June, but concerns about export competition from South America have created some doubt. Earlier Wednesday, the U.S. Energy Department said ethanol inventory dropped from 24.3 million to 23.7 million barrels last week, while production was slightly lower. For now, the trend in cash corn is currently down early in 2019. There were 594 contracts of March corn still open early Wednesday, one day before contracts expire. DTN’s National Corn Index closed at $3.36 Tuesday, 29 cents below the May contract and up from its lowest price in over three months. In outside markets, the March U.S. dollar index is trading lower for a fourth consecutive day and most commodities were higher after the Labor Department said U.S. producer prices were up 2.3% in February from a year ago, a lower increase than prices have been showing lately.
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