DTN Before The Bell Grain Comments

Morning CME Globex Update:

March soybeans were up 4 3/4 cents early Tuesday, given a boost by a 2.9% overnight gain in palm oil futures that helped March soybean oil trade up 0.25 at the morning break. Corn and wheat prices are benefiting from light commercial buying after state crop ratings for winter wheat showed poorer conditions since November.

Other Markets:

Dow Jones:	Higher
U.S. Dollar Index:	Higher
Gold:	Higher
Crude Oil:	Higher

Corn:

March corn was up a half-cent early Wednesday with mostly dry conditions across the central U.S., except for patches of snow east of the Mississippi River. Morning temperatures are below zero north of Iowa and Nebraska and in single digits east of Indiana, but have turned milder for the rest of the Midwest. Farther south, rain is falling in central Brazil and southern Argentina with drier weather in between. Dry conditions remain a concern in Argentina with bouts of hot temperatures expected this week. There is no strong bullish argument for corn prices, but it does appear that demand is helping to improve prices. The attempt by March corn to make new lows in mid-December has been rejected and cash corn prices are now at their highest level in over four months, in line with their seasonal tendencies. The trend in March corn is still down as prices are below the December low of $3.60 1/2. However, the weekly stochastic has turned higher for spot corn prices, a possible early sign of new bullish momentum. DTN's National Corn Index closed at $3.19 Tuesday, priced 34 cents below the March contract and at its highest price in four months. In outside markets, the March U.S. dollar index is up 0.14, rebounding from Tuesday's new three month low while outside commodities are mixed.

Soybeans:

March soybeans was up 4 3/4 cents early Wednesday, helped by March soybean oil trading up 0.25 after March palm oil futures gained 2.9% overnight. Throughout much of December, palm oil prices were a bearish drag on bean oil prices, but that appears to have changed as prices rebounded and the weekly stochastic for palm oil turned higher shortly before the new year. South America's weather continues to be traders' primary concern and this week's forecast expects plenty of rain for Brazil's crops, but only lighter amounts for Argentina with periods of hot temperatures. So far, Argentina's crop concerns are not serious, but bear watching. The trend in March soybeans remains down, but it is also interesting that commercials increased net longs for a second week as of the day after Christmas. DTN's National Soybean Index closed at $8.91 Tuesday, priced 73 cents below the March contract and up from its lowest price in over two months. Among January contracts, delivery intentions totaled 2 for soybeans and 261 for soybean meal early Wednesday.

Wheat:

March Chicago wheat was up 2 cents Wednesday with futures spreads indicating early commercial buying. Late Tuesday, the state NASS office in Kansas showed 22% of winter wheat rated either poor or very poor, up from 14% in November and not yet taking into account the last few days of cold temperatures. Dry conditions also remain in the western Plains with little moisture expected in the seven-day forecast. We have to keep in perspective that U.S. wheat production is not as influential on world prices as it used to be, but of course, these hostile conditions do have potential to impact U.S. wheat prices this spring, should they still be in play. Much like corn, the trend in March wheat remains down with prices still below the December high of $4.43. However, momentum is changing as the weekly stochastic has turned bullish and cash SRW wheat prices reached a new two-month high on Tuesday. DTN's National SRW index closed at $3.99 Tuesday, priced 34 cents below the March contract and at its highest price in two months.

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

Follow Todd on Twitter @ToddHultman1

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