DTN Before The Bell Grain Comments

Morning CME Globex Update:

Corn 1/4 higher. Soybeans 1/4 lower. Wheat 1/2 lower. Trade was lightly mixed through the morning, including in the U.S. Dollar Index, which remains above 100.00. The grain and oilseed markets seem mostly untouched by the direction of the outside markets this week, preferring instead to wait inside previously-tested price ranges until fresh news appears.

Other Markets:

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

Corn:

Once again, the corn market appears to be stuck in a range-bound limbo, with no fundamental concern bullish enough to kick the front-month chart above $3.71 and yet strong enough demand to prevent drastic price reductions. Friday morning started with mixed prices stuck inside a 3-cent trading range. December 2017 futures remain within a dime of the $4.00 level, and some university Extension estimates can pencil out some optimistic profitability from 2017 corn fields, assuming farmers were able to negotiate land rent prices downward from last year. Looking at old crop cash bids around the country, the DTN National Corn Index came to $3.28 Thursday, and the national average basis level remained steady at 36 cents under the March futures contract.

Soybeans:

The rally in global oilseed prices seems to have stalled this week, with Malaysian palm oil flat on Friday, at the equivalent of $0.33 per pound, and still near its recent four-year high. Soybean oil futures, which traditionally trade at a premium to palm oil, have fallen to 34 cents per pound this week, and soybeans themselves have dropped almost 20 cents. Funds were sellers of soybeans and soybean oil futures on Thursday, but given the ongoing risk for potential weather concerns in South America, most are still holding their long positions. The longer this market seems to go without some fresh bullish concern, the lower the cash price selling opportunities seem to sink -- the DTN National Soybean Index came to $9.73 Thursday. Basis levels will be in danger of further weakness if winter transportation costs remain challenging and if export shippers at the ports try to stay competitive with cheaper soybeans from Brazil's 2017 harvest. Already the national average basis level has weakened to 77 cents under the March futures contract.

Wheat:

Markets that indicate an eager outlook for American spending, like crude oil futures and the stock market, have posted a higher trend this week, but wheat hasn't been favored by the funds in that way. In fact, total open interest in Chicago wheat futures fell this week and the continuous chart seems to have plateaued below this month's high of $4.37 1/2. A recovering U.S. Dollar Index chart would traditionally be considered bearish to grains during Friday's trading session, but futures prices were mixed through the morning, and bullish enthusiasm from the Minneapolis spring wheat market may eventually spill over into the winter wheat markets, too. Basis bids remained steady for the winter wheat varieties Thursday, with the SRW Index at $3.89 or 39 cents under the March Chicago contract and the HRW Index at $3.47 or 93 cents under the March Kansas City contract. The Spring Wheat Index, now calculated off the May contract due to the volatile inversion between the nearby contracts, came to $5.22 or 36 cents under the May Minneapolis futures contract.

ElaineKubcan be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @ElaineKub

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