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GRAIN MARKETS: Corn higher, soy lower as holiday week winds down

Higher wheat markets supported by lower dollar.

Corn closed about a penny higher, wheat 3-6 cents higher and soybeans lower on Thursday following a lightly traded session. More light trading can be expected on Friday ahead of the three-day weekend.

The dollar dropped to a one-week low to provide some support to the crops. The dollar's decline followed its run to nearly a 14-year high the previous day.

Other selling can be attributed to year-end positioning and the lessening of concerns about dry conditions in Argentina. Based on Thursday's closes, corn is about 9 cents/bu. lower for the year, soybeans $1.32/bu. higher and soft red winter wheat 65 cents/bu. lower.

Exports (according to the U.S. Department of Agriculture and Reuters) included:

- Jordan postponed a tender to buy 30,000 metric tons of milling wheat in separate tenders, but another tender for 25,000 mt remains valid, and results are awaited.

- Egypt bought 175,000 mt of wheat from Russia and 60,000 mt from the Ukraine in this week's tender. Prices ranged from $197.20 to $195.95 per ton (c&f) for Feb. 1-10 shipment.

- Morocco seeks to buy 363,636 mt of U.S. soft wheat and a similar amount of European Union soft wheat. It also seeks to buy 327,273 mt of U.S. durum. The deadline for the U.S. wheat is Jan. 17, with the soft wheat for arrival by April 30 and the durum by Dec. 31.

Outside markets were mixed. Equities were a little lower in the early afternoon, crude oil was down about 37 cents a barrel, the dollar was down and gold was higher.

Corn closed about a penny higher in light trading but remained under key moving averages and within the previous day's range.

Rain this week and next week in Argentina and Brazil may aid those crops, which will be harvested in February.

Weekly export sales due Friday morning are forecasted to be down from a week ago, with participants in a Reuters poll expecting 31.5 million to 47.2 million bu.

Corn had a weak close in China's Dalian market, with January at the equivalent of $5.56/bu. European corn for January was weak at $4.45/bu. The prices reflect conversions from local currencies and metric tons.

The Chicago Board of Trade (CBOT) estimated Thursday's corn volume at 123,545, compared with Wednesday's actual volume of 181,851. Open interest on Wednesday decreased by 1,123 in the lower market, with March down 1,826 and May up 926.

March corn closed 1.5 cents higher at $3.4975/bu., and May was up 1 cent to $3.5575/bu.

What to look for: Weather reports from South America continue to move the corn and soybean markets. Currently, Argentina should have beneficial rain this week and next week, but the breadth of coverage will be watched. USDA's next crop report on Jan. 12 will have the government's production estimates for 2016 crops.

 

Soybeans closed lower for the second day amid light trading, but contracts remain higher for the week, with one more trading day left. The entire soy complex was lower, and soybean oil and soybean meal were also down.

Funds have sold soybeans this week after entering the week net-long the market. Exports have been quiet this week, with no daily sales reported. The weekly sales on Friday are expected to be down from last week's business, with estimates in the Reuters poll ranging from 36.74 million to 55.1 million.

Malaysian palm oil was lower, with a lightly traded January contract down slightly to 32.34 cents/lb. and the more active February contract down a few cents to 31.90 cents/lb. U.S. soybean for January closed down 0.34 at 34.52 cents/lb.

CBOT estimated Thursday's volume at 153,716, compared with Wednesday's actual volume of 189,851. On Wednesday, open interest in the lower market was down 30,568 contracts, with January down 24,381 and March down 8,404.

January soybeans closed 3.5 cents lower at $10.0325/bu., and March was down 3.75 cents to $10.1275. New-crop November soybeans were off 2.5 cents to $9.935/bu.

What to look for: Soybean export sales should decrease early in the new year as global buyers shift their business to South America.

 

Wheat markets finished higher, with hard red winter wheat having the best gains in a lightly traded session.

Soft red winter wheat finished higher but was unable push to past chart resistance at the 20-day moving average near $4.0625/bu.

Egypt buying Black Sea wheat was consistent with its previous deals. Morocco is seeking U.S. soft wheat, but that deal will not conclude for about two weeks.

There have been recent sales to Algeria, Nigeria and Morocco, which have taken hard red winter, soft red winter, spring and durum wheat. Egypt bought about 45,000 mt of U.S. spring wheat earlier this month. Weekly export sales on Friday are expected to be on either side of the previous week's business.

Soft red winter wheat areas in the Southeast should have rain by this weekend, which may improve moisture conditions there.

CBOT estimated Thursday's soft red winter wheat volume at 45,433, compared with Wednesday's actual volume of 64,805. Open interest in Wednesday's higher market was up 300, with March down 461 and May up 313.

Chicago, Ill., March soft red winter wheat closed 3.25 cents higher at $4.0475/bu., and May was up 3.25 cents to $4.1775/bu. Kansas City, Mo., March hard red winter wheat was 5.75 cents higher at $4.1525/bu., and May was up 6 cents to $4.27/bu. Spring wheat for March rose 4.75 cents to $5.355/bu., and May was up 3.75 cents to $5.3175/bu.

What to look for — The dollar's recent run to nearly a 14-year high will make it hard for U.S. wheat to compete in export markets, where global buyers have plenty of supply to choose from.

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