DTN Before The Bell Grain Comments

Morning CME Globex Update:

Winter wheat contracts were leading grains higher early Monday with red flag warnings in the southwestern Plains and a continuation of early, spring-like weather in 2017. Soybeans were also starting higher with rain in southern Brazil expected to slow this week's harvest activity.

Other Markets:

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

Corn:

May corn was up 1 1/2 cents early Monday, willing to hold on to last week's gains with support from active demand. This week's weather will bring rain and storm activity to the southeastern U.S., near the Ohio River Valley, and will likely interrupt field work. Friday's CFTC data showed noncommercials bullish with 194,447 contracts net long on Feb. 28, the largest gathering of net longs held since July 2015. While corn's increased popularity among traders offers bullish support to prices, there is also a potentially bearish concern that these longs will eventually become a source of bearish selling pressure when South America's crops show up this summer. For now, May corn remains in a gradual uptrend. There were 219 contracts of March corn and 20 contracts of March ethanol delivered early Monday. DTN's National Corn Index closed at $3.39 Friday, priced 42 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 0.07 and April gold is up $7.00 after the Washington Post reported that North Korea fired four missiles into the sea between Korea and Japan on Monday morning.

Soybeans:

May soybeans were up 6 1/2 cents early, still holding roughly sideways while Brazil's soybean harvest continues to make progress. The private firm, Safras & Mercado, pegged Mato Grosso's harvest at 78% complete on Friday. DTN's forecast expects moderate to heavy rains in southern Brazil this week which could slow harvest activity and add to transportation difficulties. Even so, private estimates continue to support record harvest numbers for Brazil and that continues to keep prices under pressure. Friday's CFTC data showed noncommercial traders staying bullish with 148,192 contracts net long as of Feb. 28. Net longs have come down the past couple weeks, but are still higher than they started the year with and longs represent 74% of all noncommercial positions. May soybeans continue to hold a sideways range with support at last week's low of $10.17. DTN's National Soybean Index closed at $9.57 Friday, priced 81 cents below the May contract and near its six-week low. Among March contracts, there were 506 soybeans, 253 meal, and 444 bean oil delivered early Monday.

Wheat:

May Chicago wheat was up 7 3/4 cents with early commercial buying going along with windy weather in the southwestern Plains raising red flag warnings in what continues to be an unusually early and warm spring in 2017. Also, Friday's CFTC data showed noncommercials slightly bearish again with 23,516 contracts net short on Feb. 28, up 15,189 from the previous week. It is not a large position, but is likely under pressure to cover shorts again as prices continue to push higher. Once again, we see winter wheat prices trending higher in defiance of heavy supplies with concerns about 2017's unusual spring weather. DTN's National SRW index closed at $4.06 Friday, priced 47 cents below the May contract and down from its highest price in seven months. Early Monday, March wheat deliveries totaled 395 in Chicago and 121 in Minneapolis. All three March wheats have 475 contracts or less still open.

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

Follow Todd Hultman on Twitter @ToddHultman1

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