DTN Closing Grain Comments

General Comments:

Corn was down 1/2 cent in the May contract and down 1/4 cent in the December. Soybeans were down 9 1/4 cents in the May contract and down 7 3/4 cents in the November. Wheat closed down 4 3/4 cents in the May Chicago contract, up 1/4 cent in the May Kansas City, and down 5 cents in the May Minneapolis contract. The June U.S. dollar index is down 0.14 at 89.67. June gold is up $20.40 at $1,347.70 while May silver is up 36 cents and May copper is up $0.0145. The Dow Jones Industrial Average is down 636 points at 23,467. May crude oil is down $1.77 at $63.17. May heating oil is down $0.0379 while May RBOB gasoline is down $0.0530 and May natural gas is down $0.056.

Corn:

May corn started the session higher with more buying related to USDA's lower-than-expected planting estimate of 88.0 million acres from Thursday, but settled for a half-cent loss Monday as more took a look at what corn's numbers might actually mean, including USDA's bearish corn stock total of 8.89 billion bushels. Monday's weekly inspections report also may have tempered the enthusiasm for corn as USDA said last week's inspections totaled 53.1 million bushels and put the 2017-18 total down 27% from a year ago with five months remaining. On the other hand, speculators remain bullish about corn as Friday's CFTC data showed noncommercials in corn with 301,735 net longs as of March 27. That was down 113,715 contracts from where they were two weeks earlier, but the number likely jumped higher Thursday after USDA estimated a smaller planting. USDA's first Crop Progress report of the season will be released Monday afternoon, but not much is likely to be learned as most of the Corn Belt is too wet and or cold for planting, conditions that are expected to persist in early April. Fundamentally, the outlook for corn prices looks neutral, using USDA's new planting estimate. Technically, the trend in May corn turned up again after Thursday's report. DTN's National Corn Index closed at $3.51 Thursday, back near its highest prices since June 2016 and priced 37 cents below the May contract. In outside markets, June lean hogs closed down their daily 3-cent limit after China enacted a second group of tariffs proposed earlier, including a 25% tariff on U.S. pork.

Soybeans:

May soybeans started higher early Monday, but finished down 9 1/4 cents at $10.35 1/2, reining back some of Thursday's 26-3/4 cent gain. Thursday's gain was somewhat understandable as there were unofficial concerns that soybean acres could have been 92 million or more. Even with an 89.0 million acre estimate however, this fall's level could still reach a bearish 4.6 billion bushels with help from good weather and there is a possibility that soybean acres will increase if this spring's cold, wet start pushes corn planting past its comfortable dates. At the same time, Thursday's March 1 soybean stocks of 2.11 billion bushels meant demand was down 165 million bushels in the first half of 2017-18 and, given rising trade tensions with China and Mexico, the outlook for U.S. soybean demand is bearish. USDA added to that perception Monday, reporting 19.9 million bushels of soybean export inspections for last week, keeping the 2017-18 total down 12% from a year ago. In spite of soybeans' bearish concerns, Friday's CFTC data showed noncommercials holding 192,800 net longs in soybeans as of March 27, still near their most since July 2016. Technically, the weekly trend is sideways in May soybeans, but has remained up in November soybeans. DTN's National Soybean Index closed at $9.67 Thursday, near its highest price in a year and 78 cents below the May contract.

Wheat:

Like soybeans, May Chicago wheat also gave up a gain early Monday and closed down 4 3/4 cents at $4.46 1/4. May K.C. wheat closed up a quarter-cent at $4.67 1/2, faring a little better while the seven-day forecast remains mostly dry for the southwestern U.S. Plains. This winter's drought in the southwestern Plains has been the only significant bullish factor for wheat prices this year and, in the larger picture, has not been enough by itself to sustain higher wheat prices. In the meantime, U.S. wheat demand is down 163 million bushels in the first three quarters of 2017-18 from a year ago and faces stiff competition overseas. USDA had more bearish news Monday, saying 13.3 million bushels of wheat were inspected for export last week, keeping total inspections down 9% in 2017-18 from a year ago. As the trend in Chicago wheat turned bearish, so has noncommercial sentiment. Friday's CFTC data showed noncommercials with 15,216 net shorts of Chicago wheat as of March 27. Commercials on the other hand, increased net longs to 26,227, once again finding good value among wheat's cheaper prices. Lacking bullish arguments, the trends remain down for all three wheats. DTN's National SRW Index closed at $4.21 Thursday, up from its lowest in over a month and 30 cents below the May contract. DTN's HRW Index closed at $4.26, up from its lowest price in over a month.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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