DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

May corn was 1 cent lower, May soybeans were 7 cents lower, and July Kansas City (HRW) wheat was 3 cents lower.

CME Globex Recap:

The grain and oilseed complex is lower early Thursday morning, ahead of USDA's weekly export sales and shipment update and monthly Supply and Demand reports. Some of the action was follow-through from Wednesday's sell-off, while the U.S. dollar continues to firm and DJIA futures were under pressure once again. Metals and energies were lower with the hardest hit being platinum. The headline Thursday morning is that President Trump is set to sign his proposed tariffs into action despite dissent from Republican lawmakers.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 82.76 points (0.3%) lower at 24,801.36, the NASDAQ Composite gained 24.64 points (0.3%) to 7,396.65, and the S&P 500 dipped 1.32 points to 2,726.80 Wednesday. DJIA futures were 28 points lower early Thursday morning. Asian markets closed mostly higher with Japan's Nikkei 225 up 115.35 points (0.5%), Hong Kong's Hang Seng gaining 457.60 points (1.5%), and China's Shanghai Composite adding 16.74 points (0.5%). European markets were trading mixed with London's FTSE 100 off 3.11 points, Germany's DAX down 56.76 points (0.5%), and France's CAC 40 up 11.03 points (0.2%). The euro was 0.0036 lower at 1.2374 while the U.S. dollar index gained 0.21 to 89.80. March 30-year T-Bonds were unchanged at 144'04 while April gold lost $1.20 to $1,326.40. Crude oil was $0.07 lower at $61.09 as Brent crude fell $0.17 to $64.17. China's Dalian soybean futures were mostly higher and Malaysian palm oil futures were lower again overnight.

	BULL		BEAR
1)	Corn production for Argentina and Brazil, as well as world ending stocks, are expected to be trimmed in the March WASDE report.	1)	Total marketing year export shipments of corn are expected to remain well behind projected pace in the weekly demand update.
2)	The soybean market is anticipating a larger than projected cut in Argentine soybean production.	2)	Similar to corn, total marketing year export shipments for U.S. soybeans are expected to be bearish again this week.
3)	New-crop winter wheat, particularly HRW, remains in a bullish weather situation.	3)	U.S. ending stocks of wheat are expected to increase slightly in the March round of Supply and Demand reports.

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 You may have read this somewhere in the past, but corn was a little lower following a quiet overnight session. Both old-crop May and new-crop December were down about a penny as traders await the release of weekly export sales and shipment data and USDA's monthly set of Supply and Demand reports. According to pre-report estimates, U.S. ending stocks of corn are expected to be trimmed to roughly 2.3 bb from last month's 2.352 bb. How USDA gets there, if it does, promises to be fun. The most likely path is an increase in both feed and export demand, though Thursday morning's total export shipments for the marketing year is expected to project total demand less than USDA's current estimate of 2.05 bb. On the other hand, a connection could be made to possible decrease in both Argentina's and Brazil's production estimates in this month's WASDE report. As for feed demand, monthly Cattle-on-Feed reports continue to show an increase of roughly 8% on feed compared to last year. In USDA's February Supply and Demand report feed demand was projected only 1.5% above last marketing year. Delivery of 178 contracts was reported against the March issue, putting the total at 1,058 contracts.

SOYBEANS Let's get this out of the way early: May soybeans (as well as new-crop November) have rolled over into a minor (short-term) downtrend on its daily chart. What does this mean? Most likely nothing, particularly if USDA's estimate on South American soybean production in its monthly WASDE report Thursday comes in lower than expected. But from a technical point of view, soybean contacts do look to be in minor downtrends, at least up until the release of this month's reports. There, expectations are for a sharp decrease in Argentina's possible production and an increase in Brazil. How large, either way, remains to be seen. The market could quickly discount any of the numbers if not deemed a realistic change. Also, keep an eye on soybean meal where recent commercial selling has reestablished a carry in the May-to-July futures spread. There were no deliveries reported against the March soybean issue, leaving its total at 821 contracts. March soybean meal saw another 135 contracts delivered (total of 812 contracts) while March soybean oil came in at 85 contracts (total of 5,092 contracts).

WHEAT Winter wheat markets were lower again early Thursday, pressured by light follow-through selling from the last couple of days. The March round of Supply and Demand reports from USDA aren't expected to hold many surprises for the wheat complex in general, with all U.S. wheat ending stocks expected to come in above 1.0 bb, and slightly above last month's government estimate of 1.009 bb. Meanwhile, world ending stocks are also expected to show a slight increase to 266.2 mmt. Neither of these are particularly bullish, and could likely add a little pressure to old-crop futures. However, time is running out on old-crop interest, possibly lasting through the quarterly stocks number at the end of this month, with attention turning to the distressed HRW crop in the field.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.51	-$0.01	-$0.36	May	$0.002
Soybeans:	$9.86	-$0.09	-$0.79	May	$0.003
SRW Wheat:	$4.62	-$0.09	-$0.35	May	$0.007
HRW Wheat:	$4.87	-$0.07	-$0.47	May	$0.002
HRS Wheat:	$5.99	-$0.09	-$0.21	May	$0.005

Darin Newsom can be reached at darin.newsom@dtn.com

Darin can be followed throughout the day at www.twitter.com\DarinNewsom

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