DTN Before The Bell Grain Comments

Morning CME Globex Update:

March K.C. wheat was up 10 cents at the morning break as dry weather in the southwestern U.S. Plains continues to pressure the bearish side of the market. Row crops were starting a little higher with help from Argentina's dry forecast. At 8 a.m. CST, USDA announced 5.2 million bushels (132,000 mt) of U.S. corn were sold to Spain for 2017-18.

Other Markets:

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

Corn:

At 8 a.m. CST, USDA announced 5.2 million bushels (132,000 mt) of U.S. corn were sold to Spain for 2017-18. March corn was up 1 1/4 cents earlier Tuesday, challenging its December high of $3.60 1/2 with bullish influence from winter wheat prices. Tuesday's weather map is mostly dry across the central U.S. with patches of snow in the mid-Atlantic and northeastern U.S. The seasonal low in corn came in mid-November for cash corn prices, but not until Jan. 12 this year for the March corn futures. Now that corn is stored away and harvest is behind, March corn is slowly creeping higher with help from dry winter conditions and active domestic demand. The trend in March corn is up, in line with its seasonal tendencies as prices challenge resistance from the December high of $3.60 1/2. DTN's National Corn Index closed at $3.27 Monday, priced 32 cents below the March contract and at its highest price in five months. In outside markets, the March U.S. dollar index is down 0.28 and Dow Jones futures are lower as the Federal Reserve begins its two-day meeting.

Soybeans:

March soybeans were up a penny at the morning break, holding steady under the $10 mark while this week's forecast for Argentina remains mostly dry with temperatures in the 90s. Heavy rains are expected for central Brazil which are likely to interfere with harvest. However, with USDA and Conab both expecting a Brazil soybean crop slightly above 4.0 billion bushels, there has been no urgent demand for U.S. soybean exports, now down 14% in 2017-18 from a year ago. One bullish factor for soybean prices was how commercials turned net long when prices fell to the mid-$9s earlier this month. Futures spreads however, show no sign of increased demand for the front month while the overall trend remains sideways. DTN's National Soybean Index closed at $9.23 Monday, near its highest in a month and priced 68 cents below the March contract.

Wheat:

March Chicago wheat was up 4 cents early Tuesday while a bigger gain of 10 cents was taking place in March K.C. wheat, now at $4.63, its highest price in four months. Dry weather continues to take a toll on this year's crop and the state NASS office at Kansas said late Monday 44% of Kansas winter wheat crops are now either in poor or very poor condition. Red flag warnings were issued Tuesday morning for the Texas Panhandle, western Oklahoma, and south-central Kansas. This ratcheting up of weather concern is taking place after traders were settled in net short for the winter and are now having to cover their obligations. Given this year's abundance of wheat supplies, it is difficult to say how high this rally can go, but for now, the trend is up and shorts are under pressure to liquidate. DTN's National SRW index closed at $4.19 Monday, priced 30 cents below the March contract and at its highest price in five months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(BAS)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.