DTN Early Word Grains

6:00 a.m. CME Globex:

March corn was down 1 cent, March soybeans were down 5 1/4 cents, and July Chicago wheat was down 3 cents.

CME Globex Recap:

All three grains were starting lower Wednesday, falling back from recent highs with no production threats imminent and ag groups understandably nervous about changes in the direction of U.S. trade policy. The U.S. dollar index is down 0.20, but most other commodities are also lower.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed up 112.86 points at 19,912.71. The NASDAQ Composite was up 48.02 points at 5,600.96 and the S&P 500 was up 14.87 points at 2,280.07 Tuesday. DJIA futures were up 61 points early Wednesday morning. Asian markets were higher with Japan's Nikkei up 269.51 points (1.4%), Hong Kong's Hang Seng up 99.26 points (0.4%), and China's Shanghai Composite up 7.00 points (0.4%). European markets were also higher Wednesday with London's FTSE 100 up 19.16 points (0.3%), Germany's DAX up 141.32 points (1.2%), and France's CAC 40 up 48.12 points (1.0%). The U.S. dollar index was down 0.20 at 100.01 while the euro was up 0.30500 at 1.07735. March 30-year T-Bonds were down 4/32nds at 150'15 while February gold was down $7.60 at $1,203.20. March crude oil was down $0.59 at $52.59 while Brent crude was down $0.64 at $54.80. Dalian soybean futures were lower and Malaysian palm oil futures were down 0.7%.

	BULL		BEAR
1)	In spite of Tuesday's sell-off, March corn is still near the upper end of its six-month range.	1)	Record fall corn and soybean harvests started 2016-17 with plenty of supply.
2)	Argentina has suffered production loss from adverse weather, possibly as much as 5% to 10%.	2)	U.S. soybean exports remain above a year ago, but a possible trade conflict is brewing with China and Brazil's harvest has begun.
3)	The U.S. dollar index is staying down from the 14-year high made in December after President Trump said he supports a weaker dollar.	3)	U.S. wheat supplies remain burdensome and drought conditions are expected to ease the next three months.

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MORE COMMODITY-SPECIFIC COMMENTS

CORN March corn was down a penny early Wednesday, adding to Tuesday's sell-off while little is happening to drive corn prices very far in either direction. Crop conditions remain generally favorable in Brazil where DTN's seven-day forecast expects more rain in the central growing regions. Argentina is expecting only light amounts this week, but bears watching with more rain chances expected in the wetter north-central areas in early February. Overall, March corn is maintaining a steady to higher trend with resistance at Tuesday's high of $3.71.

SOYBEANS March soybeans were down 5 3/4 cents early, still pressured by light commercial selling after coming down from last week's new six-month high. The rain that created flooding concerns in north-central Argentina two weekends ago has since backed off and this week's forecast is also mostly dry, but the extended forecast shows a chance for more to return in the north-central crop areas in early February. Crop conditions in Brazil however, remain favorable overall and their harvest is just weeks away from showing up at ports. From a fundamental view, soybean supplies are adequate and Brazil appears able to keep exports flowing through summer. Many are anticipating increased U.S. soybean acres in the spring, but weather will have the final say. There is also plenty of uncertainty about trade ahead as soybean groups have expressed concern about the cancellation of TPP and the re-negotiation of NAFTA. So far, March soybeans remain in an uptrend.

WHEAT March Chicago wheat was down 3 cents early Wednesday, taking its cue from row crops while not much is happening in the world of wheat. The seven-day forecast remains mostly dry for the southwestern Plains with temperatures slightly above normal the next five days. This winter's back and forth temperature swings may show up as problems for winter wheat in the spring, but it is too early for traders to be concerned. Both winter wheat contracts have rebounded from multi-year lows in January, but it is K.C. wheat that is showing the more bullish response. With the U.S. showing the smallest planting of winter wheat since 1909, March K.C. wheat remains in an uptrend.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.28	-$0.06	-$0.36	Mar	$0.001
Soybeans:	$9.82	$0.01	-$0.76	Mar	$0.003
SRW Wheat:	$3.87	-$0.07	-$0.39	Mar	$0.000
HRW Wheat:	$3.48	-$0.03	-$0.93	Mar	$0.004
HRS Wheat:	$5.20	-$0.02	-$0.40	Mar	$0.019

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

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(BAS)

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