DTN Early Word Grains

Soybeans and Meal Show Shamrock Green

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

May corn was 1/4 cent lower, May soybeans were 5 cents higher, and July Kansas City (HRW) wheat was 4 1/4 cents lower.

CME Globex Recap:

One day before St. Patrick's Day, soybeans and meal were trading higher as the seven-day forecast for Argentina remains dry and stressful to row-crop conditions. Corn and winter wheat were a little lower despite red flag warnings throughout the southwestern U.S. Plains. Overnight commodities were mixed with Asian stock markets lower and European stocks a little higher.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 115.54 points (0.5%) higher at 24,873.66, the Nasdaq Composite was 15.07 points (-0.2%) lower to 7,496.81, and the S&P 500 dropped 2.15 points (-0.1%) to 2,747.33 Thursday. DJIA futures were 26 points lower early Friday morning. Asian markets were lower with Japan's Nikkei 225 down 127.44 points (-0.6%), Hong Kong's Hang Seng down 39.13 points (-0.1%), and China's Shanghai Composite off 21.23 points (-.6%). European markets were trading mostly higher with London's FTSE 100 up 15.19 points (0.2%), Germany's DAX adding 50.92 points (0.4%), and France's CAC 40 gaining 5.16 points (0.1%). The euro was 0.0026 higher at 1.2410 while the U.S. dollar index slipped 0.21 to 89.92. March 30-year T-Bonds were 2/32 higher at 145'28 while April gold was up $2.30 at $1,320.00. Crude oil was $0.21 higher at $61.40 as Brent crude was up $0.17 at $65.29. China's Dalian soybeans were steady to higher and Malaysian palm oil futures were down 0.5% overnight.

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BULL BEAR
1) Weekly export sales of corn hit a new marketing year high last week, keeping hope alive for USDA's new and higher export estimate. 1) There is plenty of U.S. old-crop corn in storage, waiting for a higher price.
2) Despite bearish changes in momentum, five-week trends remains up in May soybeans and meal. 2) Noncommercial positions in corn and soybeans are extremely bullish, vulnerable to disappointment.
3) Thursday's U.S. Drought Monitor continues to show extreme drought conditions around the Texas Panhandle and southwestern Kansas. 3) Recent gains in U.S. wheat prices have made it even more difficult to compete with record world supplies for export sales.

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 down a quarter-cent early, having pulled back from its recent high the past two days, but still near its highest prices in six months. Argentina's dry weather has been a bullish surprise in early 2018, and the seven-day forecast remains mostly dry with the best rain chances in the region near Uruguay. Central Brazil continues to have the better rain chances, but not enough to slow the soybean harvest or second planting of corn. Fundamentally, cash corn prices near their highest levels in six months are probably enticing corn movement in the Eastern Corn Belt, but Western Corn Belt prices remain lower and not as attractive. Technically, the trend remains up in May corn, in line with its seasonal tendency.

SOYBEANS May soybeans are up 5 cents early Friday with a mix of commercial and noncommercial buying evident. May soybean meal is trading up $3.30, also providing support to soybeans while Argentina's forecast remains dry and commercial buying persists. Thursday's crush report from NOPA showing 153.7 million bushels (mb) crushed was a new record high in February and a bullish factor for soybean prices. Surprisingly, the report did not slow the advance in meal, being directly related to Argentina's problems in 2018. U.S. soybean exports, on the other hand, remain in the dumps with Brazil's big harvest allowing China to cut back on their U.S. purchases. So far in 2018, soybean and meal prices have been able to ignore obvious bearish risks and are maintaining their uptrends.

WHEAT July Kansas City wheat is down 4 1/4 cents early Friday, sliding to its lowest level in March as holders of short positions in wheat show less urgency about needing to buy back their commitments while drought remains a serious concern in the southwestern U.S. Plains. At the same time the National Weather Service has posted red flag warnings throughout the southwestern Plains, the northwestern Plains have winter storm warnings with moderate precipitation on the way from Nebraska and South Dakota to Missouri and the southeastern Midwest. Some winter wheat areas will see increased flooding, but most will benefit from the moisture. Meanwhile, we have yet to hear from the world's major wheat producers in 2018 and that remains a bearish risk to prices. For now however, the trends remain up in Chicago and K.C. wheat.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.49 -$0.02 -$0.38 May -$0.002
Soybeans: $9.62 $0.08 -$0.79 May -$0.003
SRW Wheat: $4.45 -$0.09 -$0.34 May $0.010
HRW Wheat: $4.70 -$0.11 -$0.43 May $0.007
HRS Wheat: $5.96 -$0.06 -$0.19 May $0.001

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

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Todd Hultman