DTN Before The Bell Grains

Morning CME Globex Update:

May contracts of corn, soybeans and all three wheats showed small gains early Wednesday, helped by a lower U.S. dollar and an ability to find support at recent lows.

Other Markets:

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

Corn:

May corn is up 2 1/2 cents early Wednesday, finding more support in the aftermath of Friday's USDA reports and 17-cent sell-off. It remains difficult to tell how corn planting will go this spring with flood warnings currently in North Dakota and moderate to heavy rains expected across much of the Midwest and southern U.S. Plains the next seven days. The six-to-ten day forecast also expects above-average precipitation for most of the U.S. Meanwhile, crop conditions remain favorable for Brazil's second corn crop and Argentina's harvest is going well with unconfirmed talk of higher-than-expected yields. Fundamentally, the outlook for corn prices is neutral with seasonal highs typically seen by early June. Technically, cash corn has not followed through on Friday's new low and may be working back into a sideways trading range. DTN's National Corn Index closed at $3.36 Tuesday, priced 25 cents below the May contract. In outside markets, the June U.S. dollar index is down 0.31, falling back from the dollar's highest spot prices in nearly two years. Most commodities are trading higher early Wednesday.

Soybeans:

May soybeans are up 2 1/2 cents early, supported by small accompanying gains in meal and bean oil. Technically, it is impressive for soybean prices that the new four-month low on Friday has not been able to follow through lower and prices are back to trading within their sideways range. Fundamentally, soybean prices remain plagued by bearish concerns, starting with the expectation for record high U.S. ending stocks in 2018-19. Trade talks with China pick up again this week in Washington D.C. and, while official statement remain hopeful for progress, the sticking point of protecting intellectual property rights continues to stand in the way of an actual agreement. China has made limited soybean purchases recently, but U.S. exports remain in a hole from last year, down 29% according to the most recent weekly report. Both, cash and future soybean prices remain in a sideways trading range while trade talks continue. DTN's National Soybean Index closed at $8.14 Tuesday, chopping sideways and priced 86 cents below the May contract.

Wheat:

May K.C. wheat is up 1 1/4 cents early, finding support in the low $4s. USDA's first assessment of winter wheat crops in 2019 was favorable with 56% rated good-to-excellent, but two states where crops are not doing so well are in Ohio and Michigan where wet conditions are expected to get wetter. The seven-day forecast expects moderate to heavy rain across the eastern half of the U.S., affecting primarily the SRW wheat crop. May Chicago wheat is up 4 1/2 cents early. It is also of interest that May Minneapolis wheat is up 2 3/4 cents Wednesday morning, getting a quick bounce after sliding to a new contract low Tuesday. Spot spring wheat futures are at their lowest prices in nearly two years while cash prices are holding above support at $5.00. Technically, this is a possible area of support for spring wheat. Fundamentally, there are concerns of dryness in the Canadian Prairies and in southern Europe, but no serious production problems yet. For now, the trends in cash HRW and SRW wheat remain down, while the trend in cash HRS wheat is holding sideways. DTN's National HRW index closed at $4.19 Tuesday, 14 cents under the May contract and up from its lowest prices in a year. DTN's National SRW index closed at $4.39, also up from its lowest prices in a year.

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

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