DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was 2 cents lower, March soybeans were 4 cents lower, and July Kansas City (HRW) wheat was 4 cents lower.

CME Globex Recap:

The grains and oilseed complex was glowing a faint color of red early Friday as all markets but bean oil and Malaysian palm oil were lower. Other commodity sectors were also down with pressure seen in both energies and metals. Softs, including cotton, were showing small gains. The U.S. dollar was slightly stronger while a triple-digit rally in DJIA futures points to another volatile session ahead.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 1,032.89 points (4.2%) lower at 23,860.89, the NASDAQ Composite lost 274.83 points (3.9%) to 6,777.16, and the S&P 500 fell 100.66 points (3.8%) to 2,581.00 Thursday. DJIA futures were 130 points higher early Friday morning. Asian markets closed lower with Japan's Nikkei 225 down 508.24 points (2.3%), Hong Kong's Hang Seng dropping 943.85 points (3.1%), and China's Shanghai Composite off 132.20 points (4.1%). European markets were trading lower with London's FTSE 100 down 19.07 points (0.3%), Germany's DAX off 46.61 points (0.4 and France's CAC 40 losing 23.59 points (0.5%). The euro was 0.0009 higher at 1.2257 while the U.S. dollar index added 0.06 to 90.34. March 30-year T-Bonds were 12/32 lower at 143'23 while April gold lost $2.20 to $1,316.80. Crude oil was $0.67 lower at $60.48 and Brent crude dropped $0.51 to $64.30. China's Dalian soybean and Malaysian palm oil futures were both higher again overnight.

	BULL		BEAR
1)	Corn traders don't seem convinced about the size of South American corn production following Thursday's WASDE reports.	1)	Total marketing year corn shipments do not support the latest increase in USDA's projected demand.
2)	Similar to corn, soybean traders paid little attention to the latest WASDE report in regards to Argentine soybean production.	2)	Total marketing year soybean shipments continue to run well behind pace to meet USDA's projected demand.
3)	As expected, projected global ending stocks of wheat were lowered in Thursday's WASDE report.	3)	USDA's latest estimate on U.S. wheat ending stocks climbed back above 1.0 bb.

The weekly Newsom on the Market column can be found on subscription sites only. On DTN Pro it is in News/Town Hall and on MyDTN in News/Columns.

MORE COMMODITY-SPECIFIC COMMENTS

CORN Similar to Thursday, there isn't much fresh news to talk about in corn early Friday morning. Contracts were lower overnight, though selling wasn't overly enthusiastic. Probably the most interesting development following Thursday's USDA reports was the lack of interest in the numbers by traders, most notably computer algorithms. The decrease in U.S. ending stocks of corn due to a questionable increase in export demand went largely ignored, as the market stayed generally flat through the close. Thursday's other set of numbers, particularly weekly export shipments, continued to show total corn exports running on pace to hit a marketing year final number of 1.762 bb, 288 mb short of USDA's latest projection of 2.050 bb.

SOYBEANS The soybean market was lower early Friday though both old-crop March and new-crop November contracts remain a long way away from extending previously established short-term downtrends. To do so March would need to fall below $9.67 3/4 with November taking out $9.89 1/4. Neither are in position to do that Friday, unless recent commercial support breaks down and selling intensifies. In its February round of monthly reports, USDA decreased soybean export demand by 60 mb to 2.1 bb. This looks to be a step in the right direction following the latest weekly export shipment update, also released Thursday, that showed soybeans on pace to ship a marketing year total of 1.851 bb. Unless a major change is seen in U.S. exports, look for USDA to continue to trim its demand projection, setting the stage for what should be an interesting Quarterly Stocks report at the end of March.

WHEAT No Virginia, it hasn't rained or snowed across the U.S. Southern Plains. That's not why the Kansas City wheat market has been under pressure the latter part of this week. No, the problem is as it has been for quite some time: Bearish global wheat supplies. Thursday WASDE report from USDA did nothing to change that perception, putting world wheat ending stocks at 266.1 mmt. This was actually below the average pre-report estimate of 267.8 mmt and January's estimate of 268 mmt. However, U.S. wheat ending stocks were increased to 1.009 bb, a 20 mb increase from January created by a 25 mb decrease in expected exports to 950 mb. Based on the latest total export shipment number of 578 mb, all wheat exports at the end of the marketing year would project to 889 mb.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.35	$0.00	-$0.31	Mar	-$0.005
Soybeans:	$9.19	$0.04	-$0.69	Mar	-$0.009
SRW Wheat:	$4.28	-$0.03	-$0.29	Mar	$0.013
HRW Wheat:	$4.33	-$0.06	-$0.41	Mar	$0.002
HRS Wheat:	$5.97	$0.00	-$0.16	Mar	-$0.012

Darin Newsom can be reached at darin.newsom@dtn.com

Darin can be followed throughout the day at www.twitter.com\DarinNewsom

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