DTN Before The Bell Grain Comments

Morning CME Globex Update:

March corn was up 3/4 cent, March soybeans were up 2 1/4 cents, and March Chicago wheat was down 1/4 cent. Tuesday morning's net changes are small, but the numbers are shaded green for row crops with encouraging support from outside commodities. Weather continues to be more cooperative in South America, one source of bearish pressure on prices.

Other Markets:

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

Corn:

March corn was up 3/4 cent early, trading in a narrow overnight range with little happening to push prices in either direction. In the southeastern U.S., soil moisture is improving with more chances for rain in this week's forecast while the Midwest remains mostly dry. Crop conditions remain generally favorable in Brazil outside the northeastern region and have turned less threatening for Argentina since mid-January. That leaves demand as the main source of support for corn prices and so far, it has been good enough to hold prices sideways. DTN's National Corn Index closed at $3.22 Monday, priced 36 cents below the March contract and down from its highest price in six months. In outside markets, the U.S. dollar index is down 0.38 with many expecting the Federal Reserve to keep rates unchanged after Wednesday's meeting. Also, Eurostat reported the Eurozone's unemployment rate improved from 9.7% to 9.6% in December, the lowest in over seven years.

Soybeans:

March soybeans were up 2 1/4 cents early, a small rebound after Monday's 26 1/2 cent drop. Apparently, emotions have calmed since Argentina's flooding rains in mid-January and traders have turned their attention back to Brazil where harvest is taking place and crops have done much better overall. Prices are on track to finish the month of January with about a 20-cent gain, but the mood is feeling more bearish after this most recent drop of the roller coaster. The bearish concerns for soybeans are well-known by now: Brazil's advancing harvest and potential changes in U.S. trade relations. Also, don't expect to see many soybean sales this week while China celebrates its New Year. Even so, March soybean prices are trading within a sideways range which is still up from their harvest lows of last fall. DTN's National Soybean Index closed at $9.46 Monday, priced 76 cents below the March contract and down over 50 cents from its highest price in six months.

Wheat:

March Chicago wheat was down a quarter-cent early Tuesday, still looking for support after falling to its lowest prices in three weeks. Much like corn and soybeans, wheat is also on track to finish the month of January a little higher than it started, but it doesn't feel very bullish after the latest two-week decline. DTN's seven-day forecast remains mostly dry for the southwestern Plains while SRW wheat country has chances for light precipitation. This time of year is notoriously quiet for wheat prices and that is one reason why this month's attempt at new highs did not get very far, but the rebounds in cash wheat prices have been helpful for producers and a good sign that wheat's excessive bearishness has eased, at least temporarily. March Chicago wheat successfully expanded its sideways trading range this month, but it is still trading sideways, nonetheless. DTN's National SRW index closed at $3.77 Monday, priced 37 cents below the March contract and down from its highest price in five months.

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

FollowTodd on Twitter@ToddHultman1

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