DTN Before The Bell Grain Comments

Morning CME Globex Update:

May corn was down 1 1/4 cents, May soybeans were down 5 1/4 cents, and May Chicago wheat was down 1 cent. Corn, soybeans, and wheat are all lower early Friday, extending this week's slide as the anticipation of Brazil's next crops continue to exert bearish pressure. The U.S. dollar index is lower even though nonfarm payrolls increased more than expected in February.

Other Markets:

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

Corn:

May corn was down 1 1/4 cents early Friday, another quiet start, but also threatening a fifth consecutive lower close to end the week. Thursday's higher USDA crop estimates for Brazil and Argentina were bearish reminders that corn exports are expected to have more competition this summer, if the favorable weather holds on down south and so far, it is. DTN's seven-day forecast continues to expect mostly dry weather across central Brazil with the best chances for rain in the southern end and in northeastern Argentina. Even so, FOB corn prices remain significantly cheaper in the U.S. vs. Brazil so U.S. corn exports should continue to be active and offer support to prices. May corn has lost its upward momentum and is close to challenging support at $3.63. DTN's National Corn Index closed at $3.26 Thursday, priced 41 cents below the May contract and down from its highest price in eight months. In outside markets, the March U.S. dollar index is down 0.35, even after the U.S. Labor Department said nonfarm payrolls increased 235,000 in February, more than expected.

Soybeans:

May soybeans were down 5 1/4 cents early, continuing this week's bearish slide after USDA lifted its crop estimate for Brazil to 108.0 mmt on Thursday. This week's weather remains near ideal in Brazil for further soybean harvest progress with the best rain chances confined to the south. USDA's estimate that Brazil's soybean exports will total 2.24 billion bushels in 2016-17 is a formidable challenge to U.S. business, but so far, FOB prices for the two countries remain unusually close for this time of year. May soybeans are trending lower with the 2017 low of $10.01 offering a chance for support. DTN's National Soybean Index closed at $9.32 Thursday, priced 79 cents below the May contract and at a new 8-week low. Among March contracts, there were 258 soybeans, 235 meal, and 91 bean oil delivered early Friday.

Wheat:

May Chicago wheat was down a penny early, threatening to end the week with a fourth consecutive day lower. The risk of wildfire in the southwestern Plains has eased for now, but the five-day forecast remains mostly dry for the region. The next several days will also see a return of winter weather with sub-freezing temperatures as far south as Kansas. On Thursday, USDA increased crop estimates for Australia and Argentina, another reminder that world supplies are plentiful and continue to make it tough for the U.S. to export its surplus. Technically, May Chicago wheat remains in an uptrend, but there is currently no strong argument for higher prices until more is known about the next winter wheat crops. DTN's National SRW index closed at $3.99 Thursday, priced 45 cents below the May contract and down from its highest price in eight months. Among March contracts, there were 24 deliveries of Chicago and 2 deliveries of K.C. wheat early Friday.

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

Follow Todd Hultman on Twitter @ToddHultman1

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