DTN Before The Bell Grain Comments

Morning CME Globex Update:

March corn was unchanged, March soybeans were up 9 cents, and March Chicago wheat was unchanged. March soybeans were off to a higher start Wednesday with early support from commercial buying in both, meal and oil. Corn and wheat prices were quietly steady, still holding near the upper end of their recent trading ranges.

Other Markets:

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

Corn:

March corn was unchanged early with another narrow trading range overnight and not going along with Wednesday's soybean rally. Corn's narrow and choppy trading range continues to be a fair reflection of its market situation with prices squeezed between big supplies and a wide basis on one hand and active, consistent demand on the other. That good demand may lead USDA to reduce its U.S. corn ending stocks estimate on Thursday, but it also comes with a time limit as Brazil's corn crop is on track for a new record high and will offer competition this summer. So far, March corn continues to trend gradually higher, wrestling with resistance at $3.71 ahead of Thursday's WASDE report. DTN's National Corn Index closed at $3.32 Tuesday, priced 37 cents below the March contract and near its highest price in seven months. In outside markets, the March U.S. dollar index is up 0.11 and March crude oil is down 54 cents.

Soybeans:

March soybeans were up 9 cents early with support from commercial buying in both, soybean meal and oil. The combination suggests increased demand for soy products is also fueling commercial and noncommercial buying in soybeans, all of which is happening at a time when South America's weather is showing no significant threat and Brazil's harvest is making steady progress. Thursday's WASDE report may show a modest reduction in U.S. soybean ending stocks, thanks to an active pace of exports, but traders are likely to be more interested in USDA's crop estimates for Brazil and Argentina with Dow Jones' survey expecting to see a net decline of 2.6 mmt. Fundamentally, it is difficult to look beyond the bearishness of what will likely be a record harvest for Brazil, but technically, the uptrend in strengthening for March soybeans and shorts are being punished. DTN's National Soybean Index closed at $9.67 Tuesday, priced 76 cents below the March contract and down from its highest price in six months.

Wheat:

March Chicago wheat was steady early, finding little reason to trade overnight. DTN's seven-day forecast is mostly dry for the southwestern Plains with a chance for rain in Texas and Oklahoma early next week. In the Black Sea region, temperatures remain below average the next six days, but Dow Jones describes snow cover as "mostly adequate." There is still no strong bullish fundamental argument for higher wheat prices and Thursday's WASDE report won't change that. However, March Chicago wheat continues to trend gradually higher and has a chance to break above last week's high of $4.36 as cash prices continue to correct back from the bearish excesses of 2016. DTN's National SRW index closed at $3.93 Tuesday, priced 38 cents below the March contract and near its highest price in six months.

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

FollowTodd on Twitter@ToddHultman1

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