DTN Before The Bell Grain Comments

Morning CME Globex Update:

May corn was down 1/4 cent, May soybeans were down 4 3/4 cents, and May Chicago wheat was up 1 1/2 cents. May soybeans were down almost a nickel at the morning break while USDA kicked off its annual forum with a $9.60 soybean price estimate for 2017. Corn was slightly lower and wheat a little higher with concerns about this weekend's colder temperatures.

Other Markets:

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

Corn:

May corn was down a quarter-cent early Thursday, holding quietly above $3.75 as USDA begins its annual two-day forum in Arlington, Virginia. USDA's early outlook for corn expects an average price of $3.50 a bushel in 2017 and 90.0 million planted acres. Friday's details are likely to show another bearish surplus expected in 2017-18 with trend-line yields assumed, but corn prices are not reacting yet as there are far too many unknown variables this early in the season. The more immediate bearish threat to corn is being grown down south and so far, crops are doing well overall with this week's forecast expecting no major threats. In spite of the anticipation of South America's increased supplies, May corn continues to trend gradually higher, thanks to this year's increased demand. USDA's weekly export sales report will be released Friday morning due to Presidents Day. DTN's National Corn Index closed at $3.35 Wednesday, 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 down 0.06 while metals and energies are mostly higher.

Soybeans:

May soybeans were down 4 3/4 cents early Thursday, close to testing their five-week low at $10.27 as Brazil's harvest makes steady progress, now near 30% complete. DTN's seven-day forecast expects light to moderate rain amounts throughout Brazil this week, favorable for further soybean harvest progress so there seems to be no obstacle in the way of sending more supplies to market. As pointed out in Tuesday's article, "Soybeans May Still Have Time," soybean prices tend to hold up early in the year, even when Brazil has a record harvest so we wonder if that will be true again in 2017. Technically, May soybeans are barely holding above support at $10.27 and the short-term trend has turned lower. Early Thursday, USDA estimated 88.0 million acres of soybean plantings and an average soybean price of $9.60 for 2017. Friday's details from USDA will likely estimate a bearish surplus, but we still don't know soybean demand in 2016-17 so little price impact is expected. DTN's National Soybean Index closed at $9.49 Wednesday, priced 74 cents below the March contract and down from its highest price in six months.

Wheat:

May Chicago wheat was up 1 1/2 cents early Thursday with the market more concerned about this weekend's weather than USDA's early estimate that wheat prices will average $4.30 a bushel in Thursday's ag forum. After several days of warm temperatures in the southwestern Plains, winter wheat crops are more vulnerable to cold weather damage than they usually would be in February and temperatures are expected to dip well below freezing this weekend as far south as the Texas Panhandle. Knowing wheat's history however, it is difficult to be too concerned as wheat has proven its durability many times in the past. Technically, May Chicago wheat remains in an uptrend in spite of its lack of fundamental reasons. DTN's National SRW index closed at $4.05 Wednesday, 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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