DTN Before The Bell Grain Comments

Morning CME Globex Update:

March corn was down 1 cent, March soybeans were up 3 1/4 cents, and March Chicago wheat was unchanged. After 8 a.m. CST, USDA announced 4.3 million bushels (110,000 mt) of U.S. corn sold to Japan and another 5.5 million bushels (140,000 mt) to unknown, both for 2016-17. Grains were starting mixed after Wednesday's rally and are still maintaining the higher overall tone that has marked the start of 2017. Punxsutawney Phil saw his shadow, prompting a chorus of boos, but we can't argue with science.

Other Markets:

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

Corn:

After 8 a.m. CST, USDA announced 4.3 million bushels (110,000 mt) of U.S. corn sold to Japan and another 5.5 million bushels (140,000 mt) to unknown, both for 2016-17. Before the announcements, March corn was a penny lower, holding most of Wednesday's 8 1/2-cent gain with little new happening outside of Gobblers Knob. Punxsutawney Phil saw his shadow, setting up a showdown with the Climate Prediction Center's forecast for a warmer-than-normal February. The central U.S. will remain dry through the weekend with the next chances for precipitation showing up east of the Mississippi River, early next week. USDA said early Thursday that last week's corn export sales and shipments totaled 45.0 and 30.1 million bushels respectively, neutral amounts for the week. Conditions in Brazil remain generally favorable for row crops, but corn prices don't seem concerned and are again within striking distance of the six-month high at $3.71, thanks to support from active exports and record high ethanol production. DTN's National Corn Index closed at $3.32 Wednesday, priced 36 cents below the March contract and near its highest price in seven months. In outside markets, the March U.S. dollar index is down 0.30 after CNN reported National Security Adviser Michael Flynn as saying "we are officially putting Iran on notice."

Soybeans:

March soybeans were up 3 1/4 cents early, still near the middle of their sideways trading range of the past two months. March soybean meal is down slightly, back near the old breakout level at $332.00 after seeing prices rise and fall on Argentina's flooding concerns. There is a moderate amount of rain forecast for central Argentina this week, but concerns have eased as traders seem to have adjusted to the idea that Argentina will produce a few mmts less than USDA's estimate of 57.0 mmt this spring. Brazil continues to be the more bearish concern with an estimated 104.0 mmt of new soybeans currently being harvested. On Wednesday, USDA surprised us with a nearly 9 million bushel soybean sale while China was supposed to be celebrating its New Year. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 22.9 and 56.0 million bushels respectively, a bullish combination for the week. The level of demand in 2016-17 remains one of the big unknowns, making it difficult to predict prices in 2017. So far, March soybeans continue to trade within the confines of their two-month range with support at the January low of $9.93. DTN's National Soybean Index closed at $9.60 Wednesday, priced 77 cents below the March contract and down 40 cents from its highest price in six months.

Wheat:

March Chicago wheat was steady early, holding on to Wednesday's 13-cent gain as prices make another bid to trend higher. Concerns about cold temperatures in southern Russia, renewed fighting in Ukraine, and another dry forecast for the southern Plains with yo-yo temperatures this winter all conspired to motivate more short-covering among noncommercial traders Wednesday. The weather concerns are difficult to assess, but wheat's strengthening basis is an encouraging sign of demand at work and adds credibility to the current up-trend. USDA said last week's export sales and shipments of wheat totaled 16.6 and 11.9 million bushels respectively, a neutral showing for the week. With wheat's bearish mood easing, March Chicago wheat has a chance to break above its three-month high at $4.38. DTN's National SRW index closed at $3.96 Wednesday, priced 37 cents below the March contract and at its highest price in six months.

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

FollowTodd on Twitter@ToddHultman1

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