DTN Before The Bell Grain Comments

Morning CME Globex Update:

May contracts of soybeans and winter wheat were a little higher early Monday with ongoing concerns of drought in Argentina and the southwestern U.S. Plains still active.

Other Markets:

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

Corn:

May corn was starting steady early Monday, staying close to its seven-month high while this week's forecast remains mostly dry for Argentina. Monday's satellite map shows light showers over Argentina's crop areas and another chance is expected next weekend, but not enough to significantly relieve the stress crops are under. Here in the U.S., the northwestern Plains are getting snow and rain is falling from Iowa to Alabama. The week is expected to be fairly dry otherwise until more rain comes to the eastern U.S. next weekend. May corn has rebounded more than 30 cents from its January low with help from droughts in Argentina and the southwestern U.S. Plains. Plenty of corn stored in bins remains a potential bearish concern, but for now, the seasonal tendency is intact with traders adding to long positions. Friday's CFTC data showed noncommercials more bullish in corn, increasing net longs from 165,932 to 214,492 as of Feb. 27. DTN's National Corn Index closed at $3.49 Friday, priced 37 cents below the May contract and near its highest price in seven months. There were 525 delivery intentions for March corn early Monday. In outside markets, the March U.S. dollar index is up 0.14 and outside commodities are mixed with traders showing caution about last week's announced tariffs adding to a long list of trade concerns.

Soybeans:

May soybeans were up 3/4 cent early, still finding support from Argentina's dry weather while Brazil's soybean harvest continues to make progress. Drier weather is expected in Brazil this week, which will be favorable for harvest and planting of the second corn crop. Friday's CFTC data showed noncommercials more bullish in soybeans, increasing net longs from 106,866 to 155,357 as of Feb. 27, just as prices were making new highs. It seems a bit odd to say that spot soybeans are at their highest prices in over a year and continue to trend higher while Brazil is harvesting a near-record soybean crop and U.S. soybean exports remain sluggish. Thursday's WASDE report will likely show a lower soybean crop estimate for Argentina, but could also see an increase for Brazil. For now, the fundamental outlook for soybeans remains confusing while the trends are up in May soybeans and meal. DTN's National Soybean Index closed at $9.92 Friday, at its highest price in over a year and priced 79 cents below the May contract. Among March contracts, there were 530 delivery intentions for soybeans, 150 for meal, and 402 for bean oil early Monday.

Wheat:

May Chicago wheat was up 3 cents and May K.C. wheat was up 3 1/4 cents early Monday, having gotten through the weekend without a major wildfire in the southwestern U.S. Plains, but still not finding much hope for rain in Monday's new seven-day forecast. Red flag warnings are posted throughout Kansas and Oklahoma Monday with high wind warnings not helping matters. The eastern Midwest on the other hand, has had plenty of rain and the SRW wheat crop should see more toward the end of this week. Friday's CFTC data showed noncommercials a little less bearish in Chicago wheat, now holding 15,940 net shorts. Commercials took advantage of prices near their four-month highs and reduced net longs from 35,415 to 23,386. For now, Chicago and K.C. wheat prices continue to trend higher, largely supported by concerns of drought in the southwestern U.S. Plains against a bearish fundamental backdrop that includes plentiful global wheat supplies and a slow pace of U.S. exports. DTN's National SRW index closed at $4.63 Friday, down from its highest price in seven months and priced 37 cents below the May contract. Early Monday, there were 33 delivery intentions for K.C. wheat.

Todd Hultman can be reachedat todd.hultman@dtn.com

FollowTodd on Twitter @ToddHultman1

(KR)

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