DTN Before The Bell Grain Comments

Grains, Oils Find Early Support

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

Morning CME Globex Update:

At 8 a.m. CDT, USDA announced 4.85 million bushels (132,000 metric tons) of U.S. soybeans were sold to unknown destinations for 2016-17. Corn, soybeans, and wheat were all starting modestly higher Friday, finding early support after Thursday's sell-off. Soybean oil, palm oil, and canola were all higher early after Canada's March 31 canola stocks were reported slightly less than expected.

Other Markets:

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

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Corn:

July corn was up 2 1/2 cents early with rain from Indiana to the northeastern U.S., but dry weather over the rest of the Corn Belt with temperatures in the 70s or higher expected west of the Mississippi River. Temperatures in the eastern Midwest will stay cool the next five days with more chances for light to moderate showers on top of fields that are already too wet. In South America, Brazil's second corn crop remains in good condition while Argentina's corn harvest will be interrupted by rain in the next seven days. So far, July corn continues to trade within its sideways range, holding above support at $3.61 3/4. DTN's National Corn Index closed at $3.26 Thursday, priced 40 cents below the July contract and still in a sideways range. There were 471 contracts of May corn delivered early Friday. In outside markets, the June U.S. dollar index is down 0.04, staying cautiously quiet ahead of Sunday's election in France.

Soybeans:

At 8 a.m. CDT, USDA announced 4.85 mb (132,000 mt) of U.S. soybeans were sold to unknown destinations for 2016-17. Earlier, July soybeans were up 2 cents with July soybean oil up 0.23 after Malaysian palm oil futures ended up 1.7% overnight. Statistics Canada said early Friday that canola stocks totaled 6.6 million metric tons on March 31, down 23% from a year ago and slightly less than was expected. DTN's warmer seven-day forecast will help planting progress in the western Midwest, but wet conditions in the eastern Midwest will be hampered by cooler temperatures and chances for more rain. Argentina's soybean harvest will also encounter interruption the next seven days due to rain. Overall, nothing drastic enough has happened yet to counter the notion that soybean supplies will be higher in 2017. July soybeans remains in a downtrend with prices holding above support at $9.41 1/4. DTN's National Soybean Index closed at $9.01 Thursday, priced 74 cents below the July contract and near its highest price in five weeks. Among May contracts, there were 277 deliveries in soybean oil, and 177 deliveries of soybean meal early Friday.

Wheat:

July Chicago wheat was up 2 1/2 cents and July Kansas City wheat was up 2 3/4 cents with Thursday's sell-off tempered by the U.S. Wheat Quality Council's crop tour estimate that Kansas wheat production will total 282 million bushels in 2017, down from 467.4 million bushels a year ago. Last weekend's snow and the presence of Wheat Streak Mosaic Virus were cited as the two leading causes of abandoned acres. As far as snow-covered wheat goes, there is still a chance that some fields will recover where stems aren't broken and this weekend's warmer temperatures will help. Statistics Canada said all wheat stocks totaled 16.6 mmt on March 31, up 15% from a year ago, but less than expected. July Chicago wheat remains in a shaky uptrend after last weekend's adverse weather with plenty of unanswered questions about the new wheat crop. DTN's National SRW index closed at $3.95 Thursday, priced 43 cents below the July contract and near its highest price in seven weeks. Among May contracts, there were 38 deliveries of Chicago wheat and 41 deliveries of K.C. wheat early Friday.

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

FollowTodd on Twitter @ToddHultman1

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Todd Hultman