DTN Before The Bell Grain Comments

Morning CME Globex Update:

March corn was up 1 1/2 cents, March soybeans were up 8 1/4 cents, and March Chicago wheat was down 1 cent. At 8 a.m. CST, USDA announced 5.1 million bushels of U.S. soybeans were sold to unknown destinations for 2016-17. Before the announcement, March soybeans were already higher with a bit of hope that trade tensions with China were easing after President Trump reportedly told China's President he would accept the one-China policy.

Other Markets:

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

Corn:

March corn was up 1 1/2 cents early, showing little excitement after Thursday's WASDE report took the U.S. ending corn stocks estimate modestly lower, to 2.32 billion bushels. A 4 mmt increase in China's demand estimate helped bring down USDA's estimate of world ending corn stocks, but traders are already looking past Thursday's report and see more time for corn demand to work its magic before South America's harvests appear. U.S. domestic corn supplies remain plentiful, but are mostly tucked away in storage, daring commercials to offer higher prices to bring the corn out. In the meantime, March corn continues to trend gradually higher and is still wrestling with the January high of $3.71. DTN's National Corn Index closed at $3.33 Thursday, 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 0.24 and March crude oil is up 91 cents a barrel after the International Energy Agency said OPEC delivered 90% of its promised cuts in January, reported Bloomberg news.

Soybeans:

At 8 a.m. CST, USDA announced 5.1 million bushels of U.S. soybeans were sold to unknown destinations for 2016-17. Before the announcement, March soybeans were up 8 1/4 cents at the 7:45 a.m. pause, helped by expectations for heavy rain in northern Argentina in the next five days which should stay mostly north of the major soybean crop areas. Soybean prices may also be benefitting from widely reported news that President Trump told Chinese President Xi Jinping he would respect the one-China policy in a Thursday evening phone call -- a possible step toward easing tensions before trade negotiations begin. Of course, no one knows yet what plans the new administration has in store for China and the uncertainty continues to hang over soybean prices as Brazil's harvest gets closer to ports. In spite of these fundamental concerns, March soybeans continue to trend gradually higher within a wide trading range, thanks to active demand for U.S. soybeans. DTN's National Soybean Index closed at $9.75 Thursday, priced 76 cents below the March contract and down from its highest price in six months.

Wheat:

March Chicago wheat was down a penny early Friday, but is staying near its highest prices in five months after Thursday's WASDE report showed some bullish adjustments to its assessment of world wheat supplies. DTN's forecast expects the southwestern Plains to remain dry through the weekend with temperatures in the 80s Friday in western Kansas, possibly hitting new records for February. Beneficial rains are expected in Texas early next week, but will not reach Kansas or Nebraska. The early return of warm temperatures in February may cause problems later for winter wheat and there will be a lot to assess this spring. In the meantime, demand for cash wheat is doing better in this off-production time of year and that is helping March Chicago wheat maintain it uptrend. DTN's National SRW index closed at $4.06 Thursday, priced 37 cents below the March contract and at its highest price in seven months.

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

FollowTodd on Twitter@ToddHultman1

(KA)

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