DTN Early Word Grains

6:00 a.m. CME Globex:

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

CME Globex Recap:

Grains were a little lower early as has been the pattern this week while China begins the week-long celebration of its New Year. After White House spokesman Sean Spicer voiced support for an import tax Thursday, many are wondering about the ramifications on U.S. ag trade.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed up 32.40 points at 20,100.91. The NASDAQ Composite was down 1.16 points at 5,655.18 and the S&P 500 was down 1.69 points at 2,296.68 Thursday. DJIA futures were up 2 points early Friday morning. Asian markets were mixed with Japan's Nikkei up 65.01 points (.3%), Hong Kong's Hang Seng down 13.39 points (-0.1%), and China's Shanghai Composite up 9.61 points (0.3%). European markets were mostly lower Friday with London's FTSE 100 down 0.92 points (-0.0%), Germany's DAX down 33.88 points (-0.3%), and France's CAC 40 down 32.77 points (-0.7%). The U.S. dollar index was up 0.03 at 100.56 while the euro was down 0.00185 at 1.06990. March 30-year T-Bonds were unchanged at 149'25 while February gold was down $7.10 at $1,182.70. March crude oil was down $0.50 at $53.28 while Brent crude was down $0.68 at $55.56. Malaysian palm oil futures were down 0.4%.

	BULL		BEAR
1)	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)	With possible trade conflicts brewing and Brazil's harvest underway, China takes a week off to celebrate its New Year.
3)	Wheat export sales reached a new marketing year high in Thursday's weekly report.	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 Friday as seems to be the standard theme this week. Thursday morning's export sales report showed another decent week of sales and the forecast in South America has been fairly consistent lately -- moderate rain expected in central Brazil with lighter amounts in southern Brazil and Argentina. Northeastern Brazil and southern Argentina remain dry spots which will help keep production somewhat limited this season, but corn and soybeans harvests are still expected to be up from a year ago. March corn continues to trade sideways to gradually higher with resistance encountered at this week's high of $3.71.

SOYBEANS March soybeans were down 4 1/4 cents early, on track to post a lower trading range for the seventh consecutive day. Argentina's drier weather since its rains of mid-January have helped to contain flooding concerns and has allowed attention to come back to Brazil's harvest. This has also been a tough week for those concerned about the future of grain trade to watch the U.S. withdraw from TPP and wonder how a new tax on U.S. imports might affect ag trade. Thursday's weekly report of soybean export sales showed another drop on the week which seems to be right on cue as Brazil gets ready to export its soybean harvest. March soybeans remain in an uptrend, but continue to correct lower with China taking a week off to celebrate its New Year.

WHEAT March Chicago wheat was down a penny early, trimming back Thursday's late buying spurt. The U.S. dollar is quiet early Friday, but most other commodities are also starting lower. Hopeful bulls can cheer that export sales of wheat achieved a new marketing year high in Thursday's weekly report, but the bigger picture shows that total exports are still slightly below USDA's estimated pace for 2016-17. And even if that pace was met, there will still be well over a billion bushels of surplus wheat at the end of the marketing year. DTN's seven-day forecast for the southwestern Plains remains dry, but not enough of a concern yet to push March Chicago wheat above its three-month high at $4.37 1/2. March K.C. wheat, on the other hand, remains in an uptrend.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.28	-$0.03	-$0.36	Mar	-$0.002
Soybeans:	$9.73	-$0.06	-$0.77	Mar	-$0.003
SRW Wheat:	$3.89	$0.03	-$0.39	Mar	$0.006
HRW Wheat:	$3.47	$0.03	-$0.93	Mar	$0.001
HRS Wheat:	$5.22	$0.06	-$0.36	May	$0.004

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

Toddcan be followed throughout the day at www.twitter.com\ToddHultman1

(BAS)

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