DTN Before The Bell Grain Comments

Morning CME Globex Update:

Corn 1/4 lower. Soybeans 3 3/4 lower. Wheat 1/4 higher. Investors remain jittery about stocks and about commodity demand. Weekly export sales numbers were supportive for corn and soybeans. Prior to that report, trading volume was light Thursday morning while traders waited anxiously to see if the outside markets will throw another temper tantrum.

Other Markets:

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

Corn:

Corn futures were lightly lower through most of the morning, but the export sales report confirmed that the U.S. is still pulling in lots of business while South America waits for its second crop to make it through the growing season. The numbers showed 1.3 million metric tons sold for the current marketing year, up week over week and maintaining South Korea, Japan, and Mexico as good customers. Sorghum export sales numbers also got a good boost from China. Fed cattle futures prices have broken through previous highs and adopted a distinctly higher trend, but with feeder cattle prices also rising (up 13 percent since the start of March), cattle feedlots won't be suddenly richer and more willing to pay for feed. Meanwhile ethanol, corn's other major demand industry, is currently stable but traders will be wary of weakness in the overall energy sector. Crude oil futures are trading below $48 again Thursday. The DTN National Corn Index, an average of cash bids around the country, came to $3.19 Wednesday, and the national average basis level strengthened to 39 cents under the May futures contract.

Soybeans:

The weekly export sales report showed 738 thousand metric tons of soybean business in the current marketing year, and the shipment pace was also good, all of which could be bullish to prices as the Thursday trading session goes on. The Malaysian palm oil market has shuffled through the month of March in a sideways trend, but its day-to-day direction tends to influence futures trade in the soy complex, and through the overnight session, that was a lower direction. Long-term, concerns about El Nino formulating sometime this summer could justify some risk premium in the global oilseed markets, but that's far from certain. And in the meantime, the soybean market will be more interested in next week's Quarterly Stocks numbers and acreage intention numbers from the USDA -- two influential reports that could knock the chart out of its sideways trench in one direction or another. Futures that are hovering below $10.00 per bushel mean that cash prices aren't so far from losing their $9 handle. The average new crop soybean bid collected by DTN Wednesday was $9.28 while the spot DTN National Soybean Index was $9.22, with average soybean basis strengthening to 77 cents under the May futures contract.

Wheat:

Feed wheat prices, already historically cheap compared to corn prices, don't necessarily need to follow the day-to-day direction of the row crop markets, and on Thursday morning, wheat futures appeared to be holding on to some small, independent, overnight gains. The export sales report showed 568 thousand metric tons of total wheat business, which probably won't get the market too excited either way. Trading just above $4.20 per bushel, the front-month Chicago wheat chart seems to be treading water near the midpoint of a very long-term sideways trading range that has persisted since last summer. As springtime weather becomes more influential to Northern Hemisphere wheat crops, the market may start to adopt a more certain direction. In the U.S. cash market Wednesday, the national average SRW basis strengthened to 42 cents under the May Chicago contract (SRW Index at $3.80) and the HRW Index remained steady at 92 cents under the May Kansas City contract (HRW Index at $3.40). Spring wheat bids also remained steady, with the national average basis bid at 41 cents under the May Minneapolis futures contract and the national average price at $4.96.

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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