DTN Before The Bell Grain Comments

Morning CME Globex Update:

March corn was up 1 1/2 cents, March soybeans were up 3 3/4 cents, and March Chicago wheat was down 2 1/4 cents. At 8 a.m. CST, USDA announced 10.6 million bushels (269,296 mt) of U.S. corn were sold to Japan, 4.1 million bushels (104,704 mt) of which were for 2016-17. 4.4 million bushels (111,200 mt) of U.S. corn were sold to unknown for 2016-17. 5.1 million bushels (138,650 mt) of U.S. wheat were sold to unknown, 3.4 million bushels (92,650 mt) of which were for 2016-17. After a three-day weekend that saw little change in conditions, grain prices are starting the week not too far from where they left off on Friday.

Other Markets:

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

Corn:

At 8 a.m. CST, USDA announced 10.6 million bushels (269,296 mt) of U.S. corn were sold to Japan, 4.1 million bushels (104,704 mt) of which were for 2016-17. 4.4 million bushels (111,200 mt) of U.S. corn were sold to unknown for 2016-17. Before the announcements, March corn was up 1 1/2 cents early, within its usual narrow overnight range to start the week. Argentina received some rain over the weekend and flooding may have occurred in local areas, but no significant problems were seen. This week's forecast is mostly dry for crop areas in both, Argentina and Brazil. Friday's CFTC data showed a big jump in noncommercial net longs, going from 117,182 to 170,416 on Feb. 14 as prices reached their highest level in over six months. March corn continues to trend gradually higher with South American crops still considered generally favorable. DTN's National Corn Index closed at $3.32 Friday, priced 36 cents below the March contract and down from its highest price in seven months. In outside markets, the March U.S. dollar index is up 0.58 after two Federal Reserve presidents indicated they were open to a rate hike in March, reported Bloomberg.com and CNBC.com.

Soybeans:

March soybeans were up 3 3/4 cents early Tuesday, taking back part of Friday's loss as the market continues to assess this year's level of soybean demand. DTN's seven-day forecast is mostly dry for crop areas in Brazil and Argentina with hot temperatures adding to stress in southern Argentina. Friday's CFTC data showed noncommercial traders still bullish in soybeans with 176,321 contracts net long on Feb. 14, up 15,788 from the previous week. It is unusual that noncommercials have been net long for 11 straight months, but as long as March soybeans continue to hold above support at $10.17, there is no pressure to liquidate. DTN's National Soybean Index closed at $9.59 Friday, priced 73 cents below the March contract and down from its highest price in six months.

Wheat:

At 8 a.m. CST, USDA announced 5.1 million bushels (138,650 mt) of U.S. wheat were sold to unknown, 3.4 million bushels (92,650 mt) of which were for 2016-17. March Chicago wheat was down 2 1/4 cents earlier, still pulling back from last week's new five-month high without a strong argument for prices to keep going higher. Texas and Oklahoma received beneficial rain in the past week, but the rest of the southwestern Plains was mostly dry and will be again in the week ahead. Rain is falling in the eastern Midwest Tuesday morning and will benefit soft winter wheat areas this week with warm temperatures enticing winter crops out of dormancy. Friday's CFTC data showed noncommercials less bearish than usual in Chicago wheat, holding the smallest net short position since August 2015. Commercials took advantage of spot prices near $4.50 and pared down their net longs to just 21,553 contracts. There still is no strong bullish argument for wheat prices, but March Chicago wheat remains in an uptrend. DTN's National SRW index closed at $4.05 Friday, priced 36 cents below the March contract and down from its highest price in seven months.

Todd Hultmancan be reached at todd.hultman@dtn.com

FollowTodd on Twitter@ToddHultman1

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