DTN Before The Bell Grain Comments

Morning CME Globex Update:

After selling down to its lowest price in six months, May soybean oil is attracting commercial buying Tuesday morning and leading grains in an early rally higher. This end-of-month buying was also accompanied by widespread deliveries, which missed corn and Minneapolis wheat.

Other Markets:

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

Corn:

May corn was up 2 1/2 cents early Tuesday, possibly finding traders relieved to see no deliveries were announced in corn on first notice day. The eastern Midwest is getting rain early Tuesday while the western Plains are expected to stay mostly dry this week. In South America, the seven-day forecast expects light to moderate showers over Brazil and Argentina with no major threats expected. This will be helpful to corn's second planting in Brazil and supports bearish concerns of increased supplies this summer. In the meantime, corn exports remain active and May corn remains in a gradual uptrend with support at the six-week low of $3.63. DTN's National Corn Index closed at $3.25 Monday, priced 44 cents below the May contract and down from its highest price in seven months. In outside markets, the March U.S. dollar index is down 0.08 after the U.S. Commerce Department said real GDP was up 1.9% in the fourth quarter from a year ago, less than was expected.

Soybeans:

May soybeans were up 9 1/4 cents early, supported by an unexpected bounce in May soybean oil prices, trading up 0.55. Commercial buying in soybean oil is unusual in the face of heavy deliveries, but suggests that prices may have found support near their lowest level in six months. The main bearish influence on soybeans at this time is Brazil's record harvest and on that front; all is going well with 34% of harvest complete and forecasts looking favorable up to two weeks out. We are also seeing the usual seasonal decline in U.S. soybean export activity and Brazil's FOB soybean price has slipped 8 cents below its U.S. counterpart. Last week's new six-week low in May soybeans turned the trend lower, but the outlook for soybeans is still muddled as soybean prices have not followed through much and the trend in soybean meal remains higher. DTN's National Soybean Index closed at $9.39 Monday, priced 83 cents below the May contract and near its six-week low. First notice day saw 1,059 delivery intentions for March soybean oil, 249 for March meal and 500 for March soybeans.

Wheat:

May Chicago wheat was up 4 cents, supported by early commercial buying in response to prices near their lowest level in three weeks. This week's DTN forecast is mostly dry for the southwestern Plains with mild temperatures that turn warmer again by the weekend. Winter wheat crops have seen up and down temperatures this winter, and the way things are going, we may be assessing crops in March this year. Elsewhere, no major concerns are being reported for winter crops, but it is still too early to make serious judgments for 2017. May Chicago wheat has pulled back from its early uptrend and will probably be chopping sideways until more is known about this year's new waves of amber grain. DTN's National SRW index closed at $3.87 Monday, priced 52 cents below the May contract and down from its highest price in seven months. Early Tuesday, CME Group announced 145 deliveries of March K.C. wheat and 958 in March Chicago wheat.

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

FollowTodd on Twitter@ToddHultman1

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