DTN Before The Bell Grain Comments

Morning CME Globex Update:

May corn was down 1/4 cent, May soybeans were down 5 1/2 cents, and May Chicago wheat was down 1 3/4 cents. At 8 a.m. CST, USDA announced 4.7 million bushels (120,000 mt) of U.S. corn were sold to Japan for 2016-17. Row crops are lower early after Brazil's government increased its crop estimates for corn and soybeans, citing good weather. USDA's next round of monthly estimates are due out at 11 a.m. CST.

Other Markets:

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

Corn:

At 8 a.m. CST, USDA announced 4.7 million bushels (120,000 mt) of U.S. corn were sold to Japan for 2016-17. May corn was down a quarter-cent early Thursday, bracing for a WASDE report that is expected to show higher corn crop estimates from Brazil and Argentina. Brazil's government (CONAB) increased its estimate of Brazil's corn crop to 89.0 mmt early Thursday, higher than the 87.6 mmt that Dow Jones said analysts expect in Thursday's USDA report. On the demand side of the ledger, USDA said last week's export sales and shipments of corn totaled 29.2 and 57.2 million bushels respectively, bullish amounts that have total exports up 66% in 2016-17 from a year ago. That is a good argument for a higher export estimate in Thursday's WASDE report, but USDA has ignored the higher trend so far. Technically, May corn remains in a gradual uptrend, but is falling back from February's high as South America's crop estimates continue to climb higher. There were 10 deliveries of March corn early Thursday. DTN's National Corn Index closed at $3.31 Wednesday, priced 41 cents below the May contract and near its highest price in eight months. In outside markets, the March U.S. dollar index is down 0.18 and most other commodities are lower.

Soybeans:

May soybeans were starting lower again Thursday, trading at their lowest prices in eight weeks as high crop estimates for Brazil continue to roll in. Brazil's government (CONAB) increased its soybean crop estimate Thursday to 107.6 mmt, in line with other private estimates, but higher than the 106.1 mmt that Dow Jones' survey expects in Thursday morning's WASDE report. Whatever the source, there seems to be no disagreement that Brazil is harvesting a record crop that will be near 4 billion bushels in early 2017 and is already competing with U.S. supplies. USDA said early Thursday that last week's export sales and shipments of soybeans totaled 17.8 and 36.1 million bushels respectively, a bullish combination for the week. May soybeans remain under bearish pressure and are at risk of breaking a new low for the third time this year. DTN's National Soybean Index closed at $9.42 Wednesday, priced 80 cents below the May contract and also within a sideways range. Among March contracts, there were 254 soybeans, 228 meal, and 720 bean oil delivered early Thursday.

Wheat:

May Chicago wheat was down 1 3/4 cents early Thursday, a quiet start to the day in front of USDA's 11 a.m. WASDE report. Expectations are low (bearish) for Thursday's report and we may see an increase in the crop estimate for Australia. However, the report is backward-looking and the market is currently concerned about dry conditions for the new winter wheat crop with temperatures in the 80s expected in the Texas Panhandle Thursday. USDA said last week's export sales and shipments of wheat totaled 14.4 and 16.6 million bushels respectively, a neutral-to-bearish combination that is failing to put a dent in the U.S. surplus. May Chicago wheat remains in an uptrend, but sideways trading seems more likely until more is known about the new winter wheat crop. DTN's National SRW index closed at $4.02 Wednesday, priced 45 cents below the May contract and near its highest price in eight months. Among March contracts, there were 134 deliveries of Chicago and 3 deliveries of Minneapolis wheat early Thursday.

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

Follow Todd Hultman on Twitter @ToddHultman1

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