DTN Before The Bell Grain Comments

Morning CME Globex Update:

March corn was down 1 cent, March soybeans were up 2 1/2 cents, and March Chicago wheat was down 2 1/4 cents. Grains were quietly mixed early and it's fair to wonder if many will treat Friday as the start of an unofficial three-day weekend. The U.S. dollar is a little higher after the U.S. Labor Department reported non-farm payrolls increased 227,000 in January, more than expected.

Other Markets:

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

Corn:

March corn was down a penny early Friday, staying just shy of its highest prices in six months while bettors lay down serious money on the Falcons and Patriots -- $4.7 billion, reports Yahoo Finance. While many traders may be thinking more about Sunday's upcoming game, corn basis remains weaker than normal after last fall's record harvest. Thanks to good demand however, cash corn prices have climbed gradually higher and are now near their highest level in seven months. Even these prices however, are not high enough to motivate producer-selling so it seems likely that corn will continue to gradually work higher, knowing that Brazil's corn exports don't normally pick up until June or July. With ethanol production maintaining a record pace and U.S. corn exports up 65% from a year ago, March corn continues to trend gradually higher. DTN's National Corn Index closed at $3.32 Thursday, 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 up 0.10 after the U.S. Labor Department said non-farm payrolls increased 227,000 in January, more than expected.

Soybeans:

March soybeans were up 2 1/2 cents early, staying in the middle of their two-month trading range with plenty of bearish anxiety still hanging over prices in 2017. Crop conditions in Brazil remain generally favorable for row crops and harvest should have seen more good progress this week. In Argentina, chances for light to moderate showers in the week ahead do not appear threatening and the market seems to have gotten use to the idea that production will be down roughly 6% from USDA's earlier 57.0 mmt estimate. Soybeans' export pace remains active at up 21% from a year ago, but we are also approaching the time of year when U.S. sales typically bow to Brazil's new crop. The widespread expectation for increased U.S. soybean plantings this spring is also a bearish concern that is not showing up in prices yet, but may get more play when USDA holds its annual forum near the end of February. So far, March soybeans continue to trend gradually higher with resistance at the January high of $10.80. DTN's National Soybean Index closed at $9.61 Thursday, priced 76 cents below the March contract and down 40 cents from its highest price in six months.

Wheat:

March Chicago wheat was down 2 1/4 cents, staying shy of its three-month high in early trading. Friday morning temperatures are below freezing as far south as the Texas Panhandle, but will be back in the 60s in western Kansas by Sunday. DTN's seven-day forecast remains dry for the southwestern Plains and with above-normal temperatures expected in February, we may see an early return of winter wheat crops. This week's concerns of cold in southern Russia and renewed fighting in Ukraine were good for short-covering, but the return of cash SRW wheat prices to their highest level in seven months is the more credible bullish influence -- a sign of improved demand. March Chicago wheat continues to trend gradually higher with a chance to eventually break above its three-month high at $4.38. DTN's National SRW index closed at $3.96 Thursday, priced 38 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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