DTN Closing Grain Comments

General Comments:

Corn was up 1/2 cent in the May contract and down 1/2 cent in the December. Soybeans were up 1 1/2 cents in the May contract and up 1 1/4 cents in the November. Wheat closed up 1/2 cent in the May Chicago contract, down 4 1/2 cents in the May Kansas City, and down 4 cents in the May Minneapolis contract. The June U.S. dollar index is down 0.40 at 89.55. April gold is up $14.00 at $1,325.90 while May silver is up 30 cents and May copper is up $0.0295. The Dow Jones Industrial Average is up 158 points at 24,885. May crude oil is up $1.60 at $65.14. May heating oil is up $0.0550 while May RBOB gasoline is up $0.0485 and May natural gas is down $0.037.

Corn:

May corn closed up a half-cent at $3.75 Wednesday, another day of low-volume trade that saw little interest from the buy side of the market while K.C. wheat added to its losses in March. The only significant bullish factor for corn so far this year has been Argentina's drought and that continues with another mostly dry seven-day forecast. However, the bullish impact of Argentina's news is likely fading while Brazil's planting of its second corn crop appears to be going well. On the demand side, corn exports continue to trickle in as USDA said early Wednesday that 5.4 million bushels (138,000 metric tons) of U.S. corn were sold to South Korea for 2017-18. Later, the U.S. Department of Energy said ethanol production increased from 1.025 million to 1.049 million barrels a day last week, maintaining a high level of production. Ethanol inventory dropped from 24.3 million to 23.8 million barrels, a sign of slightly better demand, which continues to offer corn prices a consistent source of support. Technically, corn's weekly momentum has turned bearish in front of USDA's Grain Stocks and Prospective Plantings reports, both due out on Mar. 29. DTN's National Corn Index closed at $3.37 Tuesday, the lowest close in three weeks and priced 37 cents below the May contract. In outside markets, the June U.S. dollar index is down 0.40, an unexpected drop after the Federal Reserve increased the target for the federal funds rate by a quarter-percent to a target of 1.50% to 1.75%, as was expected. The Fed said it expects "further gradual adjustments in the stance of monetary policy..."

Soybeans:

May soybeans closed up 1 1/2 cents, a small gain after failed attempts to trade higher earlier Wednesday. Soy products on the other hand, fared well on the day with May meal up $2.80 and May soybean oil up 0.63. Meal prices continue to find intermittent support from dry conditions in Argentina that are showing no significant sign of getting better yet. After being pressured near their one-year lows in early March by a rising pace of soybean crush, May soybean oil prices are now showing signs of support, likely helped by India's recent increase in the import tax on palm oil and by the rising price of crude oil. Fundamentally, soybeans have plenty of bearish concerns ahead in 2018, ranging from Brazil's big harvest to prospects for another big planting season in the U.S. and ongoing trade tensions with China. Technically, weekly price momentum has turned bearish for both soybeans and meal and prices are near one-month lows. DTN's National Soybean Index closed at $9.50 Tuesday, near its lowest close in a month and priced 78 cents below the May contract.

Wheat:

May Chicago wheat ended up a half-cent and May K.C. wheat was down 4 1/2 cents to $4.65 1/2, its lowest close in seven weeks. While drought remains a serious concern in the southwestern U.S. Plains and warnings of wildfire danger are still active in the region, winter wheat prices have fallen lower in March, trapping bullish traders in an awkward predicament. Wednesday's new seven-day forecast also added some bearishness, anticipating moderate to heavy rains on the eastern side of the southwestern Plains where some wheat can still benefit. On the other hand, the forecast is still mostly dry for the Texas Panhandle with temperatures in the 90s expected Friday. The SRW wheat crop in the southeastern Midwest has an opposite problem of too much rain in the forecast, adding to areas of flooding. The third wheat, May Minneapolis, fell 4 cents to its lowest spot close in nine months, pressured by rain in the forecast for the northwestern U.S. Plains. There hasn't been much talk yet of world wheat production in 2018, but late Tuesday, USDA said in its Weekly Weather and Crop Bulletin that Europe had "good to excellent prospects for greening winter crops." Technically, the trend for all three wheats is down. DTN's National SRW Index closed at $4.21 Tuesday, 10 cents above its February low and 35 cents below the May contract. DTN's HRW Index closed at $4.28 Monday, 8 cents above its February low.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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