DTN Before The Bell Grain Comments

Morning CME Globex Update:

After the week began with heavy volumes of selling and sharp losses in a litany of markets, the second trading session appears like it will be a little quieter. Soybean meal, a leader of the grain and oilseed sector's day-to-day direction, is 11 percent off its early March high.

Other Markets:

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

Corn:

Happy National Agriculture Day! Corn prices have traded both sides of unchanged during Tuesday's early trade -- a small demonstration of the overall uncertainty investors feel about interest rates and global trade this week. Next week, we'll see the results of USDA's Prospective Plantings survey, which is widely expected to show an expansion of soybean acres at the expense of less-profitable corn in 2018. With 2.1 billion bushels of ending stocks on the corn supply & demand table, however, it will be hard for the market to work up much bullish fervor due to any mild loss of acreage. New crop December futures remained under the $4 level all throughout the overnight session and continued lower early Tuesday morning. Meanwhile, in the old crop cash market, the DTN National Corn Index, an average of cash bids around the country, was $3.38 Monday, showing the national average basis level stronger at 37 cents under the May futures contract. At 8 a.m USDA reported 110,000 mt of corn sold to Peru for delivery in 2017-2018.

Soybeans:

After a stunning 27-cent loss in the soybean market Monday, the direction of trade has turned around Tuesday morning, but not at the same scale. Daily trading volumes have been relatively light while the soybean chart has been pulling back off its early March high. The U.S. Dollar Index is higher Tuesday morning while traders wait for a Federal Reserve announcement of a higher target interest rate. A stronger dollar would make it even more difficult for U.S. soybeans and soybean meal to be attractive to export buyers, who these days may be shopping not just on price but on geopolitical concerns, too. The DTN National Soybean Index was $9.44 Monday, showing the national average basis bid steady at 78 cents under the May futures contract.

Wheat:

Wheat futures are lightly higher Tuesday morning but nowhere near correcting the gap left at $5.12 on the July KC wheat chart when this week began with a massive sell-off. In the weekly statewide Crop Progress reports, a majority of the observed HRW fields coming out of dormancy in Texas and Kansas are rated either 'very poor' or 'poor,' and that proportion is growing week by week (now 60 percent in Texas). Some wheat fields in the U.S. Southern Plains received some precipitation recently (and could still use more), but some of the driest fields in the Texas and Oklahoma panhandles missed the last rain event and don't see much projected until far out in the forecast (and they would need a lot more to pull out of Exceptional Drought). On Monday, the SRW Index was $4.18 or 32 cents under the May Chicago contract. Old crop Hard Red Winter wheat's cash bids averaged $4.28 or 42 cents under the May KC contract. Hard Red Spring wheat's cash index was at $5.77 and its average basis bid was 19 cents under the May Minneapolis contract.

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

Follow Elaine Kub on Twitter @elainekub

(KR)

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