DTN Before The Bell Grain Comments

Grain Markets Still Unmoved by Weather

Elaine Kub
By  Elaine Kub , Contributing Analyst
(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

Corn 2 lower. Soybeans 4 1/2 lower. Chicago Wheat 2 1/4 lower. Futures for the hard wheat varieties are stronger. A surging Euro and higher stock markets continue to dominate the outside markets' attention Tuesday morning, but grain and oilseed futures have not experienced similar momentum. Soybean meal is holding on to Monday's gains, which should lend support to the complex.

Other Markets:

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

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Corn:

Overnight, corn futures never ventured more than 1/4 cent into higher territory and instead seem poised to spend another session in an extremely narrow -- but lower -- trading range. Not even the U.S. Dollar Index's 2 percent drop over the past two weeks has been able to guide the corn chart out of its rut, although it's worth noting that the Euro is within a few ticks of breaking through to a fresh five month high, and if that happens, the dollar could quickly fall past support on its chart and finally trigger a positive response from commodities. The weekly Crop Progress report showed corn was 17 percent planted and sorghum was 24 percent planted -- both roughly in line with their five-year average pace. The sudden catch-up over the past week demonstrates how quickly row crops can be planted in the U.S. when given any window of clear weather, and emphasizes how little trading concern there needs to be about the yield effects of "late" planting when it's still only April. The DTN National Corn Index, an average of cash bids around the country, came to $3.22 Monday, with the national average basis level steady at 36 cents under the May futures contract.

Soybeans:

Soybean meal was the leader of the soy complex's gains on Monday, and the front-month meal contract continues to trade above $316 per ton on Tuesday morning. So far, that strength has not been reflected in the soybean futures contracts, which are 4 to 5 cents lower. The weekly Crop Progress report showed 6 percent of soybean fields have already been planted, with the most notable progress in Mississippi (60 percent), Louisiana (59 percent), and Arkansas (39 percent). An earlier-than-usual soybean crop in the Delta, if supported by fair weather through the next several months, will have implications for the September soybean futures contract. In the near term, some wetter weather may slow down the last half of the Delta's planting season. The DTN National Soybean Index was $8.75 Monday, with average soybean basis remaining steady at 70 cents under the May futures contract.

Wheat:

Chicago wheat futures were lower alongside corn and soybeans Tuesday morning, but the hard wheat varieties did relatively more bouncing around as traders expressed some tentative concerns about Ukraine's non-ideal cold and dry forecast, and how that may affect global milling wheat supplies. In the U.S. Crop Progress report, the proportion of winter wheat rated either 'good' or 'excellent' was still 54 percent. Spring wheat planting was shown to be slower than normal, especially in Minnesota and North Dakota. In the cash wheat markets, the SRW Index came to $3.63 Monday, with national average SRW basis steady at 39 cents under the May Chicago contract. Basis bids strengthened for the hard wheat varieties Monday, with the HRW Index at $3.14 per bushel or 87 cents under the May Kansas City contract, and the Spring Wheat Index at $4.84 per bushel or 37 cents under the May Minneapolis contract.

Elaine Kubcan be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

(BAS)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Elaine Kub