DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CST, USDA announced China bought 4.85 million bushels (132,000 mt) of U.S. soybeans for 2017-18. 4.9 million bushels (125,000 mt) of U.S. corn were sold to unknown destinations for 2017-18. May contracts of corn, soybeans, and all three wheats were higher at the morning break and the longer list includes oats, palm oil, canola, soybean oil and meal.

Other Markets:

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

Corn:

At 8 a.m. CST, USDA announced 4.9 million bushels (125,000 mt) of U.S. corn were sold to unknown destinations for 2017-18. Earlier Monday, May corn was up 1 3/4 cents, riding the bullish start of a new contract high in May soybeans after Argentina experienced another dry weekend and is once again facing a mostly dry seven-day forecast. Here in the U.S., flooding remains a problem in parts of the southeastern Midwest with more rain expected this week in the eastern Midwest after Tuesday. Trader interest in the long side of corn has picked up the past few weeks, likely related to concerns about Argentina. Friday's CFTC data showed noncommercials increased net longs in corn from 133,972 to 165,932 as of Feb. 20, the most bullish position since late July. There is plenty of U.S. corn in storage and that is a bearish concern, but prices have not reached enticing levels yet. For now, the trends remain up in both May and cash corn. DTN's National Corn Index closed at $3.37 Friday, priced 29 cents below the March contract and near its highest price in seven months. In outside markets, the March U.S. dollar index is down 0.17 and most other commodities are starting higher.

Soybeans:

At 8 a.m. CST, USDA announced China bought 4.85 million bushels (132,000 mt) of U.S. soybeans for 2017-18. May soybeans were up 7 1/2 cents earlier Monday, trading at new contract highs out of the gate after Argentina experienced another dry weekend and still doesn't show much rain in the seven-day forecast. Argentina's bullish situation stands in contrast to Brazil's bearish situation as their 4.1 billion bushel soybean harvest continues with more favorable conditions expected this week. While Argentina's dry problems persist, traders are gradually turning more bullish in soybeans. Friday's CFTC data showed noncommercials increased net longs from 51,163 to 106,866 as of Feb. 20. With spot soybeans near their highest prices in six months, commercials gave up the last of their net longs and turned net short for the first time since early December. Fundamentally, the outlook for soybeans remains confusing with a lot riding on how the South American harvest goes and with bullish market clues suggesting stronger-than-expected demand. Technically, the trends in May soybeans and May soybean meal are clearly up. DTN's National Soybean Index closed at $9.67 Friday, at its highest price in nearly a year and priced 70 cents below the March contract.

Wheat:

May Chicago wheat was up 5 cents and May K.C. wheat was up 5 1/4 cents early, each contending with different weather concerns to start the week. Some of the SRW wheat crop is likely under water with parts of the southeastern Midwest experiencing flooding after last week's rains and more precipitation is expected in the region this week after Tuesday. The HRW wheat crop is waking up to red flag warnings around the Texas Panhandle and western Kansas early Monday and is not finding much help in the forecast the next five days. Friday's CFTC data showed noncommercials a little more bearish in Chicago wheat, as net shorts increased from 16,435 to 27,458 on Feb. 20. Even so, this is still far less than the bearish levels seen in January and don't hold the same short-covering potential. Commercials increased net longs to 35,415. An early Monday tweet from the International Grains Council said they expect world wheat production to be down 2% in 2018-19, possible help to trim the global surplus, if true. For now, the trends in winter wheat remain up with ongoing weather concerns in the U.S. DTN's National SRW index closed at $4.25 Friday, down from its highest price in six months and priced 28 cents below the March contract.

Todd Hultmancan be reached at todd.hultman@dtn.com

FollowTodd on Twitter @ToddHultman1

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