DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CST, USDA announced 4.7 million bushels (120,000 mt) of U.S. corn were sold to Japan and another 4.1 million bushels (105,000 mt) were sold to unknown destinations, both for 2017-18. Stock futures were trading lower again Tuesday morning, but grains were showing more independence with March soybeans up 5 1/2 cents and corn and winter wheat a little higher than steady.

Other Markets:

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

Corn:

At 8 a.m. CST, USDA announced 4.7 million bushels (120,000 mt) of U.S. corn were sold to Japan and another 4.1 million bushels (105,000 mt) were sold to unknown destinations, both for 2017-18. March corn was up a half-cent earlier, staying mostly steady as the 10-year T-note is trading higher for a second day, doing its part to ease this week's selling panic in stocks. Looking again at things that matter to corn, except for heavy rain expected around the Delta and southeastern U.S. and snow crossing the central Corn Belt on Wednesday, this week's forecast is mostly dry for the Corn Belt with cold temperatures prevailing. In South America, Tuesday's satellite map is mostly dry in Brazil and Argentina with hot temperatures continuing to stress row crops in Argentina. After a dry January and early February, Thursday's WASDE report is likely to show a smaller corn crop estimate for Argentina. Plentiful supplies are keeping spot corn prices cheap while the trend works slowly higher in March corn, in line with its seasonal tendency. DTN's National Corn Index closed at $3.28 Monday, priced 31 cents below the March contract and down from its highest price in five months. In outside markets, the March U.S. dollar index is up 0.38, a third day higher as investors are still leaning toward cash. Dow Jones futures are active, last seen down 120 points.

Soybeans:

March soybeans were up 5 1/2 cents early Tuesday, taking back part of Monday's loss with help from commercial buying in soybean meal and ongoing concerns about hot and dry weather in Argentina. Tuesday's satellite map is mostly clear for Argentina while crops continue to endure temperatures in the 90s, possibly into Thursday before a chance of light showers appears. Given Argentina's stretch of dry weather, USDA may reduce its crop estimate for Argentina in Thursday's WASDE report, but USDA's estimate for Brazil is likely to stay at 110.0 mt (4.04 bb) or even go a little higher. One of the bearish hurdles that prices have encountered early in 2018 is the lack of U.S. soybean exports, which may lead to a higher ending soybean stocks estimate in Thursday's report. For now, the trend in March soybeans remains broadly sideways while the short-term momentum is down. DTN's National Soybean Index closed at $9.01 Monday, back in its sideways range and priced 69 cents below the March contract.

Wheat:

March Chicago wheat was up 1 1/4 cents at the morning break, holding firm as grains start the day with more independence from this week's concerns in the financial markets. Tuesday morning's weather map shows snow in western Kansas, but conditions remain dry overall in the southwestern U.S. Plains. This week's forecast expects heavy rain around the Delta and lighter amounts in the eastern Midwest to benefit soft red winter wheat, but HRW wheat continues to be in need of moisture. In the bigger picture, of course, there is still plenty of wheat supply available around the world as Thursday's WASDE report will again remind us. For now, the trend in winter wheat is up as traders continue to monitor dry early conditions in the U.S. DTN's National SRW index closed at $4.11 Monday, 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

(KR)

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