DTN Early Word Grains

Most Commodities Starting Lower in March

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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6:00 a.m. CME Globex:

May corn was unchanged, May soybeans were 4 1/4 cents higher, and July Kansas City (HRW) wheat was 3/4 cent lower.

CME Globex Recap:

May soybeans are modestly higher while corn and wheat take a moment after this week's gains to pause in anticipation of more bearish news from USDA's report of export sales. Nearly all commodities are trading lower early Thursday while the March U.S. dollar index is up 0.14.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 380.83 points (-1.5%) lower at 25,029.20, the NASDAQ Composite fell 57.34 points (-0.8%) to 7,273.01, and the S&P 500 dropped 30.45 points (-1.1%) to 2,713.83 Wednesday. DJIA futures were 12 points higher early Thursday morning. Asian markets were mixed with Japan's Nikkei 225 down 343.77 points (-1.6%), Hong Kong's Hang Seng up 199.53 points (0.6%), and China's Shanghai Composite up 14.35 points (0.4%). European markets were lower with London's FTSE 100 down 41.10 points (-0.6%), Germany's DAX down 179.14 points (-1.4%), and France's CAC 40 down 52.45 points (-1.0%). The euro was 0.0020 lower at 1.2197 while the U.S. dollar index gained 0.10 to 90.75. March 30-year T-Bonds were 13/32 higher at 144'27 while April gold was down $6.40 at $1,311.50. Crude oil was $0.44 lower at $61.20 and Brent crude was down $0.50 at $64.23. China's Dalian soybean were higher and Malaysian palm oil futures were down 0.4% overnight.

BULL BEAR
1) Corn prices are now getting support from droughts in both, Argentina and the western U.S. Plains. 1) River closures due to flooding are making it difficult to move grain to New Orleans.
2) May soybeans posted a new contract high close Wednesday, along with another new high in May soybean meal. 2) Thursday's export sales report is apt to show U.S. shipments of corn, soybeans, and wheat all still down from a year ago.
3) Commercial buying returned a second day Wednesday to bolster the uptrend in K.C. wheat. 3) The U.S. dollar index traded at a new one-month high on Wednesday

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 May corn is steady early Thursday, staying near its highest prices in five months as USDA gets ready to release its weekly report of export sales. Giving this week's flooding along the Ohio and Illinois rivers, it doesn't seem likely that corn or soybean shipments will show very well in Thursday's report. What has shown well this week is soybean meal and winter wheat prices, thanks to ongoing droughts in the southwestern U.S. Plains and Argentina that show no sign of ending yet. Corn has received some bullish influence from both situations and that has helped keep the trend in May corn pointed up while exports have struggled in 2017-18.

SOYBEANS May soybeans are up 4 1/4 cents early with dry conditions showing in Thursday morning's satellite map and the latest seven-day forecast still looking mostly dry for Argentina. DTN Senior Ag Meteorologist Mike Palmerino wrote late Wednesday, "We do not see any sign of this dry pattern ending with losses to filling corn and soybeans expected to continue" (see Wednesday's "Growing Season is one of Driest in Decades in Argentina"). If there is a short-term catch it is that northern Argentina is expecting rain the next seven days and May soybean meal is down $2.40, but the main crop areas are expected to stay mostly dry. As mentioned above, soybean shipments may be down in Thursday's report, but export sales are likely to rebound from last week's negative showing. For now, the trends are clearly up in May soybeans and meal.

WHEAT July K.C. wheat is down 3/4 cent as an overnight show of commercial buying retreated, even though both, the seven-day and extended forecasts continue to look dry for the western U.S. Plains and especially the southwestern Plains. Before this week, the rally in winter wheat was largely fueled by short-covering on the prospects of drought. This week however, the rally shifted into a higher gear as commercial buyers began to recognize the seriousness of the situation, possibly enhanced by Monday's lower crop ratings for Kansas winter wheat. Even though the world has plenty of winter wheat, this winter's rally has become a bullish surprise with legitimate drought concerns keeping potential sellers at bay. The trends in winter wheat contracts remain up.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.45 $0.04 -$0.37 May $0.008
Soybeans: $9.76 $0.07 -$0.79 May $0.007
SRW Wheat: $4.58 $0.21 -$0.37 May $0.031
HRW Wheat: $4.69 $0.20 -$0.53 May $0.026
HRS Wheat: $5.99 $0.13 -$0.23 May $0.002

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

Toddcan be followed throughout the day on Twitter @ToddHultman1

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Todd Hultman