DTN Before The Bell Grain Comments

Snoozing Into Wednesday

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

July corn was down 1/2 cent, July soybeans were down 2 1/4 cents, and July Chicago wheat was up 1 cent. Taking the baton from Early Word Grains, early trading in grains is still quiet with prices staying close to Tuesday's closes. Rain remains on the weather map, making planting difficult.

Other Markets:

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

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Corn:

July corn was down a half-cent early Wednesday, holding Tuesday's gain so far with a band of rain, stretching from Oklahoma and Arkansas up to Minnesota and Wisconsin where it looks more like ice and snow. Sub-freezing temperatures across the Dakotas and northern Minnesota will continue to be a threat into May and will slow planting progress. Other parts of the Midwest should be able to find planting opportunities in between storms, except for Arkansas and southern Missouri where 7 to 12 inches of rain are expected the next five days. December corn prices are not showing much reaction to this year's planting problems, but they are holding above support at $3.61 3/4, keeping a sideways range. DTN's National Corn Index closed at $3.30 Wednesday, priced 35 cents below the May contract and within a sideways range. In outside markets, the June U.S. dollar index is up 0.37, rebounding from Tuesday's new five-month low with U.S. stocks back near their record highs.

Soybeans:

July soybeans were down 2 1/4 cents early in spite of a 1.1% overnight gain in Malaysian palm oil prices. This year's early planting difficulties are no problem for soybeans and may even result in more soybean acres later. Fundamentally speaking, the outlook for prices remains bearish with increased soybean supplies expected in 2017 and Argentina's harvest should be making better progress with a dry seven-day forecast ahead. The unknown factor in the equation is demand and on that front, we see commercials have turned net long already. Their early appearance is a surprise and creates doubt as to how much bearish potential is left in the current downtrend. DTN's National Soybean Index closed at $8.85 Wednesday, priced 70 cents below the May contract and up from its lowest prices in a year.

Wheat:

July Chicago wheat was up a penny early, holding Tuesday's gain even though more rain fell in Kansas and Oklahoma overnight. While we still cannot point to a bullish argument for wheat prices, there are more emerging concerns as we get deeper into the season. Heavy rains are expected to damage winter wheat crops from Arkansas into southern Illinois this week while cold temperatures continues to slow spring wheat planting progress in Canada and the northern U.S. Plains. There is also a concern of dry weather over western Europe. So far, July Chicago wheat remains in a downtrend, but prices remain at risk of a short-covering rally while noncommercials are heavily bearish. DTN's National SRW index closed at $3.70 Wednesday, priced 39 cents below the May contract and up from its lowest price in 2017.

Todd Hultmancan be reached at todd.hultman@dtn.com

FollowTodd on Twitter @ToddHultman1

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Todd Hultman