DTN Before The Bell Grain Comments

Wheat Finds Early Support Thursday

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

May contracts of all three wheats were higher early Thursday with ongoing weather challenges for the next U.S. winter wheat crop. USDA's weekly export sales report will be released Friday, due to Wednesday's winter storm in the eastern U.S.

Other Markets:

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

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Corn:

May corn was up 1 1/2 cents early Thursday, finally showing a little buying interest after five consecutive days of selling that ended on Tuesday. Since federal offices were closed Wednesday due to a winter storm, USDA announced early Thursday that the weekly export sales report will be released Friday morning. If corn's early higher start on Thursday was related to bullish expectations for export sales, they will have to wait one more day and that may help corn hold its gain on Thursday. Thursday's satellite maps find mostly clear weather across Brazil, Argentina, and the central U.S. Argentina's seven-day forecast remains mostly dry, but here in the U.S., the central Midwest is expecting a mix of snow and rain the next five days, followed by heavy rains in the southeastern Plains early next week. With cold and wet weather around much of the Corn Belt, planting is not likely to have an early start in 2018. For now, the trend remains down in May corn with two important USDA reports waiting on Mar. 29. DTN's National Corn Index closed at $3.38 Wednesday, the lowest close in three weeks and priced 37 cents below the May contract. In outside markets, the June U.S. dollar index is up 0.01, staying mostly sideways in March after the Fed raised the federal funds target by a quarter-percent Wednesday.

Soybeans:

May soybeans were up 3/4 cent, starting Thursday with a small gain and support coming once again from commercial buying in soybean meal, which is related to another mostly dry seven-day forecast for Argentina. While Argentina's situation has been helpful to soybean prices in early 2018, soybean prices in March are lower as bullish enthusiasm among noncommercial traders got carried away and encountered selling as commercials responded to the highest spot soybean prices in over a year. Now, in addition to Argentina's dry weather, traders are looking at a near-record soybean harvest in Brazil and the possibility of another year of record U.S. soybean plantings in USDA's Prospective Plantings report on Mar. 29. Trade tensions with China are also not helping with U.S. soybean exports are down 12% from a year ago. Technically, weekly momentum has turned bearish for soybeans and meal, but Argentina's situation continues to provide intermittent support. DTN's National Soybean Index closed at $9.51 Wednesday, near its lowest close in a month and priced 79 cents below the May contract.

Wheat:

May Chicago wheat was up 4 3/4 cents and May K.C. wheat was up 6 1/2 cents at the morning break, making their first attempts at real gains this week while Thursday's seven-day forecast tortures the Texas Panhandle with only light amounts of moisture while heavy rains are anticipated in central and eastern Texas. Similarly, western Kansas and Oklahoma are not expecting much rain while the eastern ends of those states will see more early next week. Meanwhile, the SRW wheat crop is looking soggy in the eastern Midwest with more heavy rains anticipated in the week ahead. This year's U.S. winter wheat crop is facing a wide range of conditions and will likely be down on the year, but a billion bushels of old-crop carry will help fill any gaps. Technically, the trends have turned down in both, Chicago and K.C. wheat. DTN's National SRW index closed at $4.20 Wednesday, near its lowest close in a month and 33 cents below the May contract.

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

Follow Todd on Twitter @ToddHultman1

(KR)

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Todd Hultman