DTN Before The Bell Grain Comments

Morning CME Globex Update:

Corn, soybeans, and all three wheats were lower early Friday with bearish influence coming once again from investors nervous about Thursday's big drop in stock prices.

Other Markets:

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

Corn:

March corn was down 1 1/4 cents early Friday, showing slight bearish influence from the ripple effects of Thursday's sell-off in the stock market, but still staying near its highest prices in three months. Friday's weather map shows patches of light snow scattered across the central Midwest. The seven-day forecast remains mostly dry for the Corn Belt, except for moderate precipitation in the eastern Midwest and heavy precipitation for the southeastern U.S. Theoretically, USDA's lower ending stocks estimate of 2.35 billion bushels should lend prices some extra support, but the trend in March corn was already up, helped by active domestic demand and concerns of dry weather in Argentina. DTN's National Corn Index closed at $3.35 Thursday, priced 31 cents below the March contract and near its highest price in six months. In outside markets, Dow Jones futures are up 60 points in active trading while the March U.S. dollar index is up 0.06.

Soybeans:

March soybeans were down 4 1/4 cents early Friday, giving back most of Thursday's gain, but still not showing much bearish impact from USDA's new ending stocks estimate of 530 million bushels for the U.S. in 2017-18. If true, that is the highest U.S. ending stocks in eleven years at the same time that Brazil just ended its crop season on Jan. 31 with a mere 59 million bushels, says USDA. Prices in Brazil are not racing higher however, as USDA expects the next crop currently being harvested to total 112.0 mmt (4.1 bb) and offer the U.S. more export competition for the next several months. As bearish as all that sounds for U.S. soybean prices, they have yet to take a direction, thanks in part to hot and dry conditions in Argentina. The Buenos Aires Grain Exchange estimated Argentina's soybean crop at 50.0 mmt on Thursday, even less than USDA's new 54.0 mmt estimate. Argentine crops have a chance for showers Friday, but then not again until late next week. So far, market factors are mixed in March soybeans while the trend remains sideways. DTN's National Soybean Index closed at $9.19 Thursday, holding in its sideways range and priced 69 cents below the March contract.

Wheat:

March Chicago wheat was down 4 3/4 cents and March K.C. wheat was down 5 1/2 cents at the morning break, pulling back from their recent highs with bearish influence from this week's higher U.S. dollar index and a slight improvement of moisture chances in the seven-day forecast for the southwestern U.S. Plains. The forecast is not a drought-buster, but could be the start of a gradual change that deserves monitoring. Thursday's increase in USDA's estimate of U.S. ending wheat stocks to 1.009 billion bushels did not help the case for wheat prices either, but to be fair, the notion that the U.S. has a lot of excess wheat is old news and tells us nothing about how world crops will do in 2018. For now, the trend in winter wheat remains up with ongoing concerns of dry conditions in the southwestern U.S. Plains. DTN's National SRW index closed at $4.28 Thursday, priced 29 cents below the March contract and near its highest price in six months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(KR)

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