DTN Before The Bell Grain Comments

Morning CME Globex Update:

March corn was down 1 cent, March soybeans were down 6 cents, and March Chicago wheat was down 3 3/4 cents. At 8 a.m. CST, USDA announced 4.0 million bushels (101,600 mt) of U.S. corn were sold to unknown destinations for 2016-17. All three grains were lower early Monday with bullish soybean traders feeling the strain of Brazil's advancing soybean harvest. Corn and wheat were quietly lower, showing early hesitation after Friday's new highs.

Other Markets:

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

Corn:

At 8 a.m. CST, USDA announced 4.0 million bushels (101,600 mt) of U.S. corn were sold to unknown destinations for 2016-17. Before the announcement, March corn was down a penny at the morning break, not showing much movement overnight and staying close to Friday's new six-month high. Friday's CFTC data showed noncommercial traders still moderately bullish in corn as with 117,182 contracts net long of Feb. 7, up 20,159 from the previous week. The main bearish threat for corn prices continues to be South America's next crops and so far, conditions have been generally favorable with some trouble in Argentina. So far, March corn continues to trend gradually higher with South America's next corn exports still several months away. DTN's National Corn Index closed at $3.37 Friday, priced 37 cents below the March contract and at its highest price in seven months. In outside markets, the March U.S. dollar index is up 0.09 and April gold is down $8.60 after North Korea test-fired a missile into the sea early Sunday.

Soybeans:

March soybeans were down 6 cents early Monday with traders keenly aware that Brazil's soybean harvest continues to make progress under mostly favorable conditions. In spite of the progress, Friday's CFTC data showed noncommercial traders in soybeans still bullish as of Feb. 7 with 160,533 contracts net long, down 7,916 from the previous week. It is difficult to explain why noncommercials have stayed bullish in soybeans through a record U.S. harvest and what is looking like a record Brazilian harvest, but part of the answer has to be the strong pace of soybean demand which has not allowed Brazil to develop a surplus of soybeans for several years. Even in the face of several bearish concerns, March soybeans continue to trend gradually higher so far. DTN's National Soybean Index closed at $9.83 Thursday, priced 76 cents below the March contract and down from its highest price in six months.

Wheat:

March Chicago wheat was down 3 3/4 cents early Monday with rain expected to help winter wheat conditions in Texas and Oklahoma early this week. After Wednesday though, a return to warmer weather will once again be coaxing the crop out of dormancy. Friday's CFTC data showed noncommercial traders in Chicago wheat still bearish with 51,899 contracts net short as of Feb. 7. Commercials were net long 47,607 contracts, still providing support to prices. Bearish Chicago wheat traders have not been doing so well lately and Friday's new five-month high likely brought about more short-covering. In Kansas City wheat, traders have been net long for two months and are doing a better job of riding the up-trend. In spite of plentiful U.S. supplies, March Chicago wheat continues to trend higher early in 2017. DTN's National SRW index closed at $4.12 Friday, 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

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