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DTN Closing Grain Comments    12/06 14:02

   Soybeans Close Higher Friday and For The Week

   January soybeans closed up 5 1/4 cents Friday and finished with a 
double-digit gain on the week, helped by trade optimism and ongoing support 
from the vegetable oil market. March corn was unchanged and March KC wheat 
dropped 4 1/2 cents in a quiet retreat from last week's high.

By Todd Hultman
DTN Lead Analyst





General Comments: 

   March corn finished unchanged and July corn closed down 1/4 cent. January 
soybeans closed up 5 1/4 cents and July soybeans were up 4 3/4 cents. March KC 
wheat closed down 4 1/2 cents, March Chicago wheat was up 3/4 cent and March 
Minneapolis wheat was down 1 3/4 cents. The December U.S. dollar index is 
trading up .31 at 97.68. The Dow Jones Industrial Average is up 331.21 points 
at 28,009.0. February gold is down $18.40 at $1,464.70, March silver is down 
$0.44 at $16.62 and March copper is up $0.0705. January crude oil is up $0.66 
at $59.09, January heating oil is up $0.0168, January RBOB gasoline is up 
$0.0234 and January natural gas is down $0.080.    

   For the week: 

   March corn closed down 4 1/2 cents and July 2020 corn was down 3 1/2 cents. 
January soybeans were up 12 3/4 cents and July 2020 soybeans were up 13 1/4 
cents. March Kansas City wheat was down 16 cents, March Chicago wheat was down 
17 1/4 cents, and March Minneapolis wheat was down 2 1/2 cents.         

   Corn: 

   March corn was unchanged Friday, ending the week at $3.76 3/4 with a 4 1/2 
cent loss from last Friday. Prices showed no significant concern this week 
about a smaller harvest or at least not enough concern to offset the bearish 
impact of low exports. Thursday's export sales report pegged total corn export 
commitments down 45% in 2019-20 from a year ago, a deep hole dug in the first 
quarter. One recent positive for corn exports is that Brazil's FOB price is now 
18 cents above the price at the U.S. Gulf. That likely played a part in Friday 
morning's USDA announcement of a sale of 9.7 million bushels (mb) or 245,872 
metric tons (mt), made to Mexico for 2019-20. Temperatures have been more 
moderate this week in the central U.S., but northern states remain cold and the 
snow cover has not receded much from where it was Monday. The seven-day 
forecast remains mostly dry, except for moderate precipitation in the 
southeastern Corn Belt. USDA's next WASDE report is on Tuesday and the crop 
estimate is not likely to change, but USDA's corn export estimate could see at 
least a 50 mb reduction. USDA's current ending stocks-to-use ratio suggests a 
national average cash corn price near $3.50, but questions remain about the 
size of the 2019 crop and corn demand for the next three quarters. Technically, 
the trend in corn remains down, but support should be near. Late Thursday, CME 
Group announced 66 deliveries in December corn. DTN's National Corn Index 
closed at $3.57 Thursday, up from its lowest prices in two months and 20 cents 
below the March contract. In outside markets, the December U.S. dollar index is 
up 0.31 and U.S. stocks are higher after the U.S. Labor Department reported a 
non-farm payroll increase of 266,000 in November, much more than expected. 
According to CNBC.com, OPEC and non-OPEC allies agreed to reduce total oil 
output by a total of 2.1 million barrels per day until March, a deeper cut than 
was expected. January crude oil is up 66 cents.  

   Soybeans: 

   January soybeans closed up 5 1/4 cents at $8.89 1/2 Friday, securing a 12 
3/4 cent gain on a week that started with a test of the September low. Friday's 
soybean prices were helped by news that the Chinese government is in the 
process of officially granting the tariff waivers on U.S. soybeans and pork for 
Chinese businesses that were promised in September. It is not a surprise that 
the waivers are being allowed, but some are taking it as a sign that a limited 
trade agreement with China is getting close. Needless to say, we have heard 
optimistic rumblings before and prefer to wait for more credible evidence. A 
0.72-cent gain in January soybean oil also helped Friday's soybean price with 
more encouragement from a new two-year high in palm oil futures. On a related 
note, Statistics Canada lowered its estimate of the 2019 canola crop from 19.36 
million metric tons (mmt) to 18.65 mmt. Meanwhile, the seven-day forecast 
continues to look promising for Brazil with broad rain coverage expected, but 
we do note that south-central and northeastern Brazil could use more rain. In 
Argentina, the forecast is drier and represents possible concern for crops. In 
addition, Argentina's new president will be watched for any new decision on 
export taxes as he takes office. Tuesday's WASDE report is not expected to show 
much change from November's 475 mb ending stocks estimate as exports have 
remained active. Technically, the trend in cash soybean prices remains down, 
but prices are well above their September lows. The CME said late Thursday 
there were 148 deliveries of December soybean meal and 711 deliveries of 
December soybean oil. DTN's National Soybean Index closed at $8.25 Thursday, 59 
cents below the January contract and up from its lowest price in two months.    
                         

   Wheat:   

   March KC wheat closed down 4 1/2 cents at $4.31 Friday, falling 16 cents on 
the week and finishing slightly below the 100-day average. As much as March KC 
wheat tried to mount a late-season rally on the back of Chicago wheat, it has 
been difficult for March KC prices to get past the October high near $4.50. On 
Friday morning, Statistics Canada issued production estimates for 2019 crops. 
The all wheat estimate was trimmed from 32.49 mmt to 32.35 mmt. Spring wheat 
production was also reduced slightly, from 25.75 mmt to 25.67 mmt. As in the 
northern U.S., there are still unharvested crops in Canada so Friday's numbers 
remain subject to future adjustment. While March KC wheat and Minneapolis wheat 
futures prices look quite depressed, near their lowest prices of the year, cash 
prices of HRW and HRS wheat are holding up better, 60 cents and 70 cents above 
their respective lows. Tuesday's WASDE report is not expected to show any 
significant change to USDA's November wheat estimates, but a few crop estimates 
may get tweaked. Technically, the trends remain up for cash SRW and HRW wheats 
and sideways for cash HRS wheat. Trading is almost over for December contracts 
of KC and Minneapolis wheat, while 937 contracts of Chicago wheat were still 
open early Friday. DTN's National HRW Index closed at $4.08 Thursday, near its 
four-month high and 27 cents below the March contract. DTN's National SRW Index 
closed at $5.15, down from its highest prices in four years.              

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

   Follow him on Twitter @ToddHultman1


(CZ)

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