DTN Before The Bell Grain Comments

Morning CME Globex Update:

July contracts of corn, soybeans, and all three wheats were higher early Monday after a weekend of warm and windy conditions in the western Plains. U.S. officials visit China this week in an effort to resolve trade differences. At 8 a.m. CDT, USDA announced 4.4 million bushels (120,000 mt) of U.S. soybeans were sold to Argentina for 2018-19.

Other Markets:

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

Corn:

July corn was up 3 cents early Monday, pressing close to its highest prices in eight months after a weekend of warm and windy conditions visited the western Plains, throwing topsoil into the air as planting efforts were underway. Monday's Corn Belt temperatures are expected in the 70s and 80s with cooler temperatures staying to the east and rain expected across much of the central Midwest the next few days. Friday's CFTC data showed noncommercials still bullish in corn with 333,416 net longs as of Apr. 24. The most obvious bullish factor for corn at this time is Brazil's dry weather and so far, this week's forecast remains dry again. Technically, the trend remains sideways in May corn, but a close above $4.03 would turn the trend up, as it already is in new-crop corn. CME Group reported 10 delivery intentions in May corn early Monday. DTN's National Corn Index closed at $3.60 Friday, its highest price in 22 months and priced 39 cents below the July contract. In outside markets, the June U.S. dollar index is up 0.27, near its highest level in over three months, even though the yield on the 10-year T-note is below 3%, starting lower for a second day.

Soybeans:

At 8 a.m. CDT, USDA announced 4.4 million bushels (120,000 mt) of U.S. soybeans were sold to Argentina for 2018-19. Earlier, July soybeans were up 5 1/4 cents Monday, finding early support once again from commercial buying in soybean meal, related to this year's drought in Argentina. Monday's Crop Progress report will likely show some planting progress for corn, but efforts will be hindered this week by areas that are still cool and by rains expected across the central Midwest. Overall however, row crop planting appears to have time to finish. This week, U.S. officials will visit China in an effort to resolve trade issues. China's proposed 25% tariff on soybeans is still on the table and, while no one can say yet how the talks will go, the consequences could have a big impact on soybean prices. Friday's CFTC data showed noncommercials still bullish in soybeans, trimming net longs from 224,357 to 193,022 as of Apr. 24. For now, the trend is sideways in old-crop soybeans and up in new-crop soybeans with prices close to their highs. For May contracts, the CME Group reported 415 delivery intentions for soybeans, 52 for meal, and 638 for soybean oil early Monday. DTN's National Soybean Index closed at $9.78 Friday, near its highest price in over a year and priced 79 cents below the July contract.

Wheat:

July Chicago wheat was up 8 1/2 cents and July K.C. wheat was up 5 3/4 cents early Monday, helped by signs of early commercial buying in both. Futures spreads still show bearish levels of carry in both contracts, but the commercial distaste for front month contracts has backed off a little bit in April, allowing winter wheat prices to hold firm in their sideways ranges. This year's Wheat Quality Council 2018 HRW wheat tour starts Tuesday, May 1 and DTN's Mary Kennedy will be on hand to give us daily updates. Obviously with drought in the southwestern U.S. Plains, expectations for crops are low this year and that has given winter wheat prices support in early 2018. On the other hand, early reports are mostly favorable for wheat's major regions outside North America and, unless that changes, it is likely to keep a bearish lid on this year's wheat prices. Friday's CFTC data showed noncommercials a little more bullish in K.C. wheat, having increased net longs from 48,887 to 54,253 as of Apr. 24. Technically, the trends remain sideways for all three wheats, continuing to show support from the anticipation of lower production in the U.S. For May contracts, the CME Group reported 327 delivery intentions for K.C. wheat and MGEX reported 876 for Minneapolis wheat early Monday. DTN's National SRW index closed at $4.64 Friday, back near this year's high and 34 cents below the July contract.

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

FollowTodd on Twitter @ToddHultman1

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