DTN Closing Grain Comments

General Comments:

Corn was down 1 cent in the May contract and down 1/4 cent in the December. Soybeans were down 9 1/2 cents in the May contract and down 1 cent in the November. Wheat closed down 9 3/4 cents in the May Chicago contract, down 7 1/4 cents in the May Kansas City, and down 9 3/4 cents in the May Minneapolis contract. The March U.S. dollar index is up 0.02 at 89.61. April gold is down $9.40 at $1,325.80 while May silver is down 30 cents and May copper is down $0.0250. The Dow Jones Industrial Average is down 199 points at 24,685. April crude oil is down $1.27 at $61.33. April heating oil is down $0.0243 while April RBOB gasoline is down $0.0206 and April natural gas is up $0.035.

CORN:

May corn ended down a penny Wednesday, keeping a low profile near its highest prices in seven months with many expecting USDA to reduce its corn-crop estimates for South America in Thursday's WASDE report. Dow Jones' survey of analysts expects Brazil's crop estimate to come down from 95.0 million metric tons to 91.8 mmt (3.6 billion bushels) and Argentina's corn estimate to fall from 39.0 mmt to 36.3 mmt (1.4 bb). There is also small chance USDA's estimate of corn exports could come down, but USDA is more likely to stand pat until after the Grain Stocks report on March 29. The main bullish influence for corn prices lately has been Argentina's dry weather and, on that count, the seven-day forecast remains mostly dry just as it has been for several weeks. To the north, planting of the second corn crop seems to be going well as the soybean harvest is staying close to its usual pace. U.S. corn supplies remain a concern as prices get higher, but so far, the trend is up in May corn. DTN's National Corn Index closed at $3.52 Tuesday, priced 36 cents below the May contract and at its highest price in seven months. There were 67 delivery intentions for March corn early Wednesday. In outside markets, the March U.S. dollar index is quiet, down 0.02 after RTTNews.com reported ADP payrolls up 235,000 in February, more than was expected. The U.S. Labor Department reports on unemployment on Friday.

SOYBEANS:

May soybeans fell 9 1/2 cents Wednesday, pulling back from Friday's new contract high in front of Thursday's WASDE report. According to Dow Jones' survey, analysts are not expecting much change in USDA's estimate of U.S. ending soybean stocks, but the crop estimate for Brazil is expected to increase from 112.0 mmt to 114.0 mmt (4.2 bb) and the estimate for Argentina is expected to drop, from 54.0 mmt to 48.1 mmt (1.8 bb). One might normally think Brazil having a near-record soybean harvest would be bearish for prices, but because the big crop was anticipated early and Argentina's drought has been a more-recent surprise, it is Argentina's dry weather that has had the more-recent bullish influence in soybean prices. Fundamentally, the outlook for soybeans is difficult to call and there is plenty of uncertainty as to how the U.S. crop will fare in 2018. In spite of Wednesday's sell-off, the trends remain up in May soybeans and meal while Argentina's seven-day forecast remains mostly dry. DTN's National Soybean Index closed at $9.96 Tuesday, near its highest price in over a year and priced 79 cents below the May contract. Early Wednesday, there were no delivery intentions for March contracts of soybeans, 135 for meal, and 35 for bean oil. Open interest in March soybean oil was 220 early Wednesday.

WHEAT:

May Chicago wheat closed down 9 3/4 cents and May K.C. wheat was down 7 1/4 cents Wednesday, also showing reluctance among traders ahead of Thursday's WASDE report, even though USDA's March estimates for wheat are not likely to change much. The risk of wildfires in the southwestern U.S. Plains eased Wednesday as wind speeds came down, but the seven-day forecast remains mostly dry for the central and western Plains, keeping pressure on bearish traders caught short in this winter's unexpected drought. If we zoom out to a wider perspective, there is still plenty of wheat available in the world and it is far too early in 2018 to know much about how this year's world crop will fare. For now, the trends remain up in both, Chicago and K.C. wheat, while May Minneapolis wheat appears to be finding support after eight months of grinding lower. DTN's National SRW Index closed at $4.71 Tuesday, near its highest price in seven months and priced 36 cents below the May contract. DTN's National HRW Index closed at $4.94, near its highest price in over two years. Early Wednesday, there were seven delivery intentions for March K.C. wheat and open interest is dangerously low for all three March wheat contracts.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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