DTN Before The Bell Grain Comments

Morning CME Globex Update:

March soybeans and winter wheat were starting lower Thursday, even though the seven-day forecasts remain mostly dry for central Argentina and the southwestern U.S. Plains. USDA's weekly report of export sales was bearish for corn and soybeans, and wheat and showed a new marketing year low for soybean sales.

Other Markets:

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

Corn:

March corn was down 3/4 cent early Thursday, staying near the upper end of its three-month range, but not yet challenging the high while corn supplies remain plentiful and export sales are down from a year ago. Early Thursday, USDA said last week's export sales and shipments of corn totaled 72.9 and 41.2 million bushels respectively, higher sales than a week ago, thanks to unknown and Mexico. Corn's shipment pace however, remains bearish and is down 30% in 2017-18 from a year ago. Here in the U.S., the best chances for precipitation the next seven days are in the eastern third and Pacific Northwest while the central and western Corn Belt remain mostly dry. In South America, heavy rains are expected across central Brazil while the seven-day forecast for central Argentina is mostly dry. Corn continues to have a bearish fundamental outlook for early 2018 while prices are gradually trading higher in line with their seasonal tendencies. DTN's National Corn Index closed at $3.30 Wednesday, priced 31 cents below the March contract and at its highest price in five months. In outside markets, the March U.S. dollar index is down 0.15, not showing much response to Wednesday's decision from the Fed to keep interest rates unchanged.

Soybeans:

March soybeans were down 9 1/2 cents at the morning break, not showing any immediate concern of a seven-day forecast that remains mostly dry for central Argentina. Heavy rains are expected across central Brazil which will make harvest more difficult, but that is not motivating traders to buy either. Soybeans low pace of exports continues to be a bearish concern in early 2017-18 after USDA said last week's export sales totaled a marketing year low of 13.2 million bushels and shipments totaled 44.8 million bushels. Total soybean shipments in 2017-18 are down 14% from a year ago, hurt by expectations for another large crop of 4.0 billion bushels or more on the way in Brazil. March soybeans continue to chop sideways in a wide range and the short-term uptrend appears to be losing momentum. DTN's National Soybean Index closed at $9.27 Wednesday, down from its highest in over a month and priced 68 cents below the March contract.

Wheat:

March Chicago wheat was down 5 1/2 cents early, falling back from Tuesday's new three-month high with moderate precipitation in the forecast for the eastern Midwest. Meanwhile, March K.C. wheat is down 7 3/4 cents even though the southwestern U.S. Plains still has a dry seven-day forecast and Thursday's U.S. Drought Monitor showed slightly drier conditions in the southwestern U.S. Plains as of Tuesday. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 10.6 and 18.9 million bushels, a bearish combination for the week that has total wheat shipments down 4% in 2017-18 from last year's low pace. Fundamentally, the U.S. still has plenty of winter wheat available and, of the two winter wheats, March K.C. wheat has the stronger bullish case in the short term. However, it is still early in the season and may be difficult to push these uptrends much further until more is known about the next winter wheat crop. DTN's National SRW index closed at $4.23 Wednesday, priced 29 cents below the March contract and down from its highest price in five months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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