DTN Before The Bell Grain Comments

Grains Mixed, Warmer Temperatures on the Way

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

Row crops were starting a little lower while winter wheat was a little higher, another quiet start with warmer temperatures on the way. Thursday's U.S. Drought Monitor showed slightly drier conditions in the southwestern Plains and some moisture improvement in western South Dakota.

Other Markets:

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

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Corn:

March corn was down a half-cent early Thursday, staying close to its highest prices this month, even after USDA raised its corn crop estimate on Friday. Single digit temperatures are still hanging on in the eastern Midwest on Thursday morning with warmer readings pushing in from the West later in the day. The latest forecast for South America expects drier conditions this week with chances for moderate showers in southern Brazil and northern Argentina -- mostly favorable for row crops. With no follow-through after Friday's new contract low, the trend in March corn futures is sideways with cash corn prices making new highs. DTN's National Corn Index closed at $3.21 Wednesday, priced 32 cents below the March contract and at its highest price in five months. In outside markets, February gold is down $10.80 after the U.S. Labor Department said weekly jobless claims fell to 220,000, the lowest since 1973.

Soybeans:

March soybeans were down 3/4 cent early, pressured by another favorable forecast this week in South America. USDA and Brazil's government are both estimating Brazil's soybean crop near 110 mmt or slightly over 4.0 billion bushels and the approach of that crop is allowing China to keep its imports from the U.S. limited. While the fundamental outlook for soybeans continues to look bearish, bullish market clues include a recent jump in commercial net longs, a rebound in March soybean meal prices, and a crush incentive near its highest level in eleven years. The trend in March soybeans remains down, but prices are not behaving as bearish as we might expect in this environment. DTN's National Soybean Index closed at $9.00 Wednesday, near its highest in a month and priced 68 cents below the March contract.

Wheat:

March Chicago wheat was up 2 cents, helped by early commercial buying keeping prices above their December low. Temperatures are in the 20s in the southwestern U.S. Plains early Thursday, rising into the 40s and 50s later in the day. Thursday's U.S. Drought Monitor showed another week of expanding dry conditions in the southwestern Plains while western South Dakota saw a little moisture improvement. Overall, dry conditions remain a concern in the western and southern Plains this winter and that is likely giving winter wheat prices some support. For now, the trend remains sideways in winter wheat with commercials staying net long. DTN's National SRW index closed at $3.89 Wednesday, priced 33 cents below the March contract and down from its highest price in three months.

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

Follow Todd on Twitter @ToddHultman1

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Todd Hultman