DTN Before The Bell Grain Comments

Morning CME Globex Update:

May contracts of grains were mixed and not far from Wednesday's closes as traders anticipate USDA's next round of estimates, due out at 11 a.m. CST. Thursday's weekly export sales were higher than a week ago for corn, soybeans, and wheat, but shipment paces for all three remain bearish overall. At 8 a.m. CST, USDA said 4.3 million bushels (110,000 mt) of U.S. corn were sold to Japan for 2017-18.

Other Markets:

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

Corn:

At 8 a.m. CST, USDA said 4.3 million bushels (110,000 mt) of U.S. corn were sold to Japan for 2017-18. May corn was steady earlier Thursday in a two-cent overnight range, staying near its highest prices in seven months with support from Argentina's ongoing drought. Thursday morning's satellite map shows another day of dry weather over Argentina and southern Brazil while light showers cross central Brazil. The seven-day forecast continues to show the same pattern of rain for central Brazil, but only light amounts for Argentina. Early Thursday, Brazil's government estimated the corn crop at 87.3 mmt. Here in the central U.S., the weather has turned drier with warmer temperatures on the way the next few days. That should help flooded areas along the lower Mississippi River and encourage better grain movement. Early Thursday, USDA said last week's export sales and shipments of corn totaled 73.1 and 42.4 million bushels respectively, higher sales than the previous week, but a bearish combination overall with total corn shipments down 28% from a year ago. So far, the trend in May corn remains up with many expecting to see USDA lower its corn crop estimates for Brazil and Argentina at 11 a.m. CST. DTN's National Corn Index closed at $3.51 Wednesday, priced 36 cents below the May contract and near its highest price in seven months. There were 178 delivery intentions for March corn early Thursday. In outside markets, the March U.S. dollar index is up 0.06 while commodities are starting the day mixed.

Soybeans:

May soybeans were down 1 3/4 cents early Thursday, continuing to fall back from Friday's new contract high with USDA's next WASDE report due out at 11 a.m. CST. It is no surprise that many are expecting USDA to reduce its outdated soybean crop estimate of 54.0 mmt (2.0 bb) for Argentina, but it may not drop as low as the 44.0 mmt (1.6 bb) estimated last week by the Buenos Aires Grain Exchange. Brazil's crop estimate is expected to be increased and there is a chance that USDA will project a new record high, beating out last year's 114.1 mmt (4.2 bb). Early Thursday, Brazil's government pegged its soybean crop at 113.0 mmt. With Brazil anticipating another big crop, U.S. soybean exports have dragged. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 92.2 and 36.7 million bushels respectively. China and Mexico provided a sales boost over the previous week, but the overall shipment pace remains bearish with total soybean shipments down 13% in 2017-18 from a year ago. Fundamentally, there is plenty of bearish risk for soybean prices in 2018, including another big planting in the U.S. Technically however, the trends remain up in May soybeans and meal. DTN's National Soybean Index closed at $9.86 Wednesday, near its highest price in over a year and priced 79 cents below the May contract. Early Thursday, there were no delivery intentions for March contracts of soybeans, 135 for meal, and 85 for bean oil.

Wheat:

May Chicago wheat was up 1 1/2 cents and May K.C. wheat was steady, still finding support at some of its highest prices since last summer while drought remains a serious concern in the southwestern U.S. Plains. Thursday's weather map is mostly dry around the central U.S. and is expected to stay that way the next seven days or more. Thursday's U.S. Drought monitor drier conditions in western Kansas, but moisture improvement in eastern Oklahoma and South Dakota. With U.S. wheat prices trading higher and plenty of wheat available around the world, U.S. wheat exports continue to struggle. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 14.4 and 13.3 million bushels respectively, another bearish week that has total wheat shipments down 6% from a year ago. Fundamentally, global wheat supplies are plentiful and little is known yet about how world production will go in 2018. Technically, the trends in May Chicago and K.C. wheat remain up with shorts pressured by drought in the U.S. Plains. DTN's National SRW index closed at $4.62 Wednesday, near its highest price in seven months and priced 35 cents below the May contract. Early Thursday, there were 4 delivery intentions for March K.C. wheat.

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

FollowTodd on Twitter @ToddHultman1

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