DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CST, USDA announced China cancelled a previous purchase of 16.7 million bushels (mb) (455,000 metric tons) of U.S. soybeans for 2017-18. USDA also said 11.5 mb (314,000 mt) of U.S. soybeans were sold to unknown destinations, 7.3 mb (198,000 mt) of which were for 2017-18.

March soybean meal was up $8.30 early Monday at its highest spot price in over a year with a boost from another dry weekend in Argentina. Corn, soybeans and all three wheats are starting the week higher.

Other Markets:

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

Corn:

March corn was up 3 cents early Monday and unlike a week ago, the Dow Jones futures are higher, and so are most other commodities. In the case of row crops, Argentina is the bullish concern of the moment after Friday's helpful, but limited rains were followed by another dry weekend and mostly dry seven-day forecast. Here in the U.S., the central and Western Corn Belt are expected to remain dry this week with warmer temperatures on the way, while the Eastern Corn Belt will receive rain, with heavier amounts along the Ohio River. Friday's CFTC data showed noncommercials turning a little more bullish in corn, increasing net longs from 13,754 to 48,070. In spite of last week's bearish influence from the volatile stock market, the trend in March corn remains up, in line with its season tendency. The DTN National Corn Index closed at $3.32 Friday, priced 30 cents below the March contract and down from its highest price in six months. In outside markets, Dow Jones futures are up 214 points in active trading and the March U.S. dollar index is down 0.06 while most other commodities are higher. March crude oil is up $1.03.

Soybeans:

At 8 a.m. CST, USDA announced China cancelled a previous purchase of 16.7 mb (455,000 mt) of U.S. soybeans for 2017-18. USDA also said 11.5 mb (314,000 mt) of U.S. soybeans were sold to unknown destinations, 7.3 mb (198,000 mt) of which were for 2017-18. March soybeans were up 13 3/4 cents at the morning break, approaching the $10 mark once again after Friday's limited rains in Argentina were followed by another dry weekend. The seven-day forecast continues to look dry and encouraged a $8.30 morning push in March soybean meal to a new contract high of $352.10. Even before the dry weekend, Friday's CFTC data showed noncommercials switched to slightly bullish with net-long positions of 1,893 contracts. Commercials reduced net longs from 59,188 to 42,036, still finding attractive value in soybeans' prices. The fundamental outlook for soybeans is difficult to sort out with the anticipation of a big soybean crop in Brazil competing against the anticipation of a shrinking crop in Argentina. Technically, however, the trend in March soybeans remains sideways while the trend in March soybean meal is clearly up. The DTN National Soybean Index closed at $9.14 Friday, holding in its sideways range and priced 69 cents below the March contract.

Wheat:

March Chicago wheat was up 6 1/4 cents early Monday, showing its own bullish start to the week with help from commercial buying while the seven-day forecast expects only light or no precipitation up and down the western U.S. Plains. The soft red winter wheat crop is expecting beneficial rains in the eastern Midwest this week, possibly too much in some areas along the Ohio River Valley. Friday's CFTC data showed little change last week as noncommercials in Chicago wheat were still moderately bearish with 48,708 net shorts. Commercials in Chicago wheat continue to offer support with 48,300 net longs. While winter wheat supplies remain plentiful, winter wheat prices continue to trend higher in the off season, helped by dry weather in the southwestern U.S. Plains, active domestic demand, and gradually rising cash prices. The DTN National SRW index closed at $4.19 Friday, priced 30 cents below the March contract and down from its highest price in six months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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