DTN Before The Bell Grain Comments

Morning CME Globex Update:

March corn was up 1 3/4 cents, January soybeans were up 5 cents, and March Chicago wheat was down 1/2 cent. At 8 a.m., USDA announced 4.85 million bushels (132,000 mt) of U.S. soybeans were sold to unknown destinations for 2016-17. Before the announcement, row crops are a little higher and wheat slightly lower with USDA's next WASDE report due out at 11 a.m. CST.

Other Markets:

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

Corn:

March corn was 1 3/4 cents higher early with sub-freezing temperatures as far south as central Texas, single digit temperatures in Nebraska and Iowa, and readings below zero in the Dakotas -- all stressful to livestock and transportation efforts. The northern Plains also saw scattered patches of snow associated with Friday's cold and many around the Great Lakes. In South America, more beneficial rains are in store for Brazil this week while the forecast for Argentina is drier, but not yet serious. USDA's WASDE report will have updated crop estimates for both at 11 a.m. CST Friday and an increase for Brazil may be in the cards. March corn continues to trade sideways, between $3.42 and $3.69. DTN's National Corn Index closed at $3.11 Thursday, priced 42 cents below the March contract and down from its highest prices in three months. 4,375 contracts of December corn remain open as of Friday morning and there have still been no deliveries, a potentially bullish situation with four trading sessions remaining. In outside markets, the U.S. dollar index is up 0.35, back near its November high with many expecting a rate hike later this month.

Soybeans:

At 8 a.m., USDA announced 4.85 million bushels (132,000 mt) of U.S. soybeans were sold to unknown destinations for 2016-17, the fifth consecutive day we have seen a soybean sale reported. Before the announcement, January soybeans were a nickel higher, helped by early commercial buying in soybean meal. February palm oil was down for a third consecutive session with Malaysia expected to be within days of releasing its next update of monthly inventory. So far, growing conditions in Brazil have been favorable for soybeans and Friday's WASDE report may show a small increase in USDA's 3.75 billion bushel (102.0 mmt) crop estimate. The other factor influencing prices is exports and so far, USDA's export estimate of a record high 2.05 billion bushels looks low for 2016-17 -- if trade with China is not disrupted. December WASDE reports are generally uneventful, but USDA's estimate of U.S. ending soybean stocks could see a modest reduction. January soybeans face a wide margin of uncertainty in the year ahead, but so far, prices remain in an uptrend. DTN's National Soybean Index closed at $9.56 Thursday, priced 71 cents below the January contract and down from its highest price in four months. There were 606 deliveries of December soybean oil and 3 deliveries of December meal early Friday.

Wheat:

March Chicago wheat was slightly lower early with traders well aware that Kansas temperatures are in the teens Friday morning, but also realize that USDA may have another increase in its estimate of world ending wheat stocks waiting in Friday's WASDE report. With world wheat production setting a new record in 2016 and Australia also expecting a record harvest, the bearish argument for wheat prices is strong heading into winter and more than sufficient to keep Chicago's wheat prices near their lowest level in ten years. DTN's National SRW index closed at $3.57 Thursday, priced 51 cents below the March contract and near its lowest price in seven years. In December wheat contracts, there were 36 deliveries of K.C. early Friday. December grain futures are set to expire by December 14 and less than 100 contracts of each are still trading.

Todd Hultmancan be reached at todd.hultman@dtn.com

FollowToddon Twitter @ToddHultman1

(KA)

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