DTN Before The Bell Grain Comments

Morning CME Globex Update:

March corn was down 1/2 cent, March soybeans were down 2 3/4 cents, and March Chicago wheat was down 2 1/2 cents. At 8 a.m., USDA announced that Costa Rica bought 106,162 metric tons (4.2 mb) of U.S. corn for 2015-16. Before the announcement, all three grains were lower early Thursday, still not willing to trade outside their sideways ranges.

Other Markets:

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

Corn:

At 8 a.m., USDA announced that Costa Rica bought 106,162 metric tons (4.2 mb) of U.S. corn for 2015-16. Before the announcement, March corn was slightly lower after showing another narrow overnight range. As quiet as corn prices have been in 2016, it seems fair to say that the market is well-balanced between supply and demand for now, but that is not good news for producers wanting more out of their corn. Crop conditions remain generally favorable in South America although this week's forecast is drier for Brazil with highs in the mid-90s. With more corn on its way from South America, commercials have been able to limit their U.S. purchases so far and that is keeping a lid on U.S. prices. March corn continues to trade within a sideways range with no strong influence in either direction. DTN's National Corn Index closed at $3.44 Wednesday, below the 200-day average and priced 23 cents below the March contract. In outside markets, April crude oil is up roughly a dollar, getting more play from the latest plan to hold production levels steady.

Soybeans:

March soybeans were moderately lower early within a narrow overnight range. That should come as no surprise by now as March soybeans have held within a tight, 38-cent range in 2016, never straying too far from the mid-point of $8.71. The only surprise about all of this is that there have been plenty of bearish reasons for soybeans to trade lower, the anticipation of a big harvest from Brazil being the main one. Because recent rains have delayed the loading of grain ships at Brazil's ports, the day of bearish reckoning has been pushed forward, but still seems inevitable. In the meantime, March soybeans continue to trade within their sideways range, thanks to active commercial demand at the lower end of the range. DTN's National Soybean Index closed at $8.35 Wednesday, still below the 200-day average and priced 48 cents below the March contract. USDA's weekly export sales report will be released early Friday due to Presidents Day.

Wheat:

March Chicago wheat is lower early Thursday in spite of an unusual weather day expected. High wind warnings are posted for states in the western Plains with red flag warnings covering most of the HRW wheat area. Highs in the 80s will be seen around the Texas Panhandle, some 20 degrees or more above normal for mid-February. This hit of early spring-like weather will either set winter crops up for a later freeze or be the start of an early growing season -- only time will tell. It is, however, the first significant risk that the U.S. wheat crop has seen since December's flooding and may be enough to spark some short-covering. March Chicago wheat continues to trade sideways near their lowest spot prices in over five years. DTN's National SRW Wheat Index contract closed at $4.27 Wednesday, below the 200-day average and 42 cents below the March contract.

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

Follow Toddon Twitter: @ToddHultman1

(KA)

Copyright 2016 DTN/The Progressive Farmer. All rights reserved.