DTN Before The Bell Grain Comments

Morning CME Globex Update:

May contracts of corn soybeans and all three wheats were steady to lower early Wednesday, along with nearly every other commodity after the stock market fell late Tuesday. USDA's Grain Stocks and Prospective Plantings reports are due out Thursday morning.

Other Markets:

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

Corn:

May corn was unchanged early Wednesday as bullish noncommercials continue to experience stress while holding a heavy amount of net long positions. Wednesday morning's weather may has moderate to heavy rains from eastern Texas to Kentucky with flood watches posted while more is falling on the Mississippi Delta. Central and southern Brazil have areas of light rain early Wednesday while Argentina remains dry. USDA's Grain Stocks and Prospective Plantings reports are set to be released at 11 a.m. CDT on Thursday and a surprise is possible. Dow Jones' survey expects 8.71 billion bushels of U.S. corn on hand as of Mar. 1 and 89.3 million acres of corn to be planted this spring. Looking ahead, it is difficult to see a bullish argument for corn prices while soil moisture is mostly favorable across the Midwest. However, there is a whole new season ahead and plenty of time for conditions to change. For now, the trend in May corn is down. DTN's National Corn Index closed at $3.38 Tuesday, near its lowest close in a month and priced 36 cents below the May contract. In outside markets, the June U.S. dollar index is up 0.12 and nearly all commodities are starting lower after the Dow Jones fell 345 points late Tuesday. Early Wednesday, the Commerce Department said U.S. GDP was up 2.6% in the fourth quarter from a year ago, a slight increase from last month's estimate.

Soybeans:

May soybeans were down a half-cent early Wednesday, a quiet start to the day with prices at their lowest level in over a month. A flash flood watch from eastern Texas to southern Ohio is making it difficult for early fieldwork to begin, but there is still plenty of time for soybeans. Wednesday's satellite map shows light rain in central and southern Brazil, but not enough to stop the final stages of harvest. In Argentina, conditions remain dry late in the season and that is the one factor helping soybean prices trade higher in early 2018. Dow Jones' survey expects USDA to find 2.04 billion bushels of soybeans on hand Mar. 1 and estimate soybean plantings at a new record high of 90.9 million acres. Anything close to those numbers will be considered potentially bearish as long as U.S. weather remains cooperative this summer. So far, the U.S. season is looking favorable for soybean crops in 2018, but there is a whole season of unanswered questions still ahead. For now, old-crop soybeans are in a downtrend while new-crop soybeans are in an uptrend. DTN's National Soybean Index closed at $9.42 Tuesday, near its lowest close in a month and priced 78 cents below the May contract.

Wheat:

May Chicago wheat was down 1 1/4 cents and May K.C. wheat was down 1 cent early with scattered showers in Oklahoma while conditions remain drier on the western side of the southwestern U.S. Plains. Wednesday's seven-day forecast expects more heavy rain from eastern Texas to Ohio with the heaviest amounts following the Mississippi and Ohio Rivers while the southwestern Plains only receive light amounts. Winter wheat prices had a nice rally until early March, helped by this year's drought concerns in the southwestern U.S. Plains. Even though the drought persists, prices have fallen lower as a new season gets ready to begin and we have not heard much yet from wheat's major producers. For now, the fundamental outlook for wheat remains bearish while the price trends are down in all three wheats. DTN's National SRW index closed at $4.16 Tuesday, 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

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