DTN Before The Bell Grain Comments

Morning CME Globex Update:

January soybeans were down 4 1/4 cents at the morning break, pressured by a beneficial forecast for Argentina and another week of low export activity. All three wheats were a little higher, helped by commercial buying in K.C. and Minneapolis contracts.

Other Markets:

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

Corn:

March corn was up a half-cent early Thursday, staying close to its lows for the year while the market's focus remains on corn's heavy supplies and slow export pace. Early Thursday, USDA reinforced the bearish view, reporting last week's export sales and shipments of corn at 34.1 and 27.2 million bushels respectively, putting total corn shipments down 37% in 2017-18 from a year ago. One of corn's bullish hopes would be that a weather problem develops in South America, but so far, that is not happening. This week's forecast expects more rain across central Brazil and light to moderate amounts for southern Brazil and Argentina. Until some surprise emerges, March corn remains under bearish pressure near its lowest spot prices in eleven years. DTN's National Corn Index closed at $3.10 Wednesday, priced 39 cents below the March contract and down from its highest price in two months. Early Thursday, there were 137 delivery intentions in December corn, the final day of trading for December grain contracts. In outside markets, February gold is up $7.30 after Wednesday's Fed decision showed two "no" votes -- a sign that further rate hikes will continue to happen gradually. RTTNews.com reported the European Central Bank increased its GDP growth estimates while inflation expectations stayed low.

Soybeans:

January soybeans were down 4 1/4 cents, at their lowest prices in nearly a month as South America continues to show no serious problems for crops this season. This week's forecast expects more rain across central Brazil and also has light to moderate amounts for southern Brazil and Argentina. On Wednesday, USDA reduced the soybean stocks estimate for Brazil to just 145 million bushels when the end of the current season hits on Jan. 31, but so far, it looks like they will have another big crop in early 2018 to keep supplies flowing and that is having a depressing effect on U.S. exports. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 53.4 and 46.3 million bushels respectively, a bearish combination for the week that has total soybean shipments down 13% in 2017-18 from a year ago. Technically, the trend in January soybeans remains sideways, but prices are nearing important support at the November low of $9.67. DTN's National Soybean Index closed at $9.08 Wednesday, priced 72 cents below the January contract and down from its highest price in four months. Thursday's delivery intentions for December contracts totaled 123 for soybean meal and 7 for soybean oil.

Wheat:

March Chicago wheat was up 2 cents early Thursday, still floundering near its lowest spot prices in eleven years while everything about the grain looks bearish -- namely, a heavy load of excess wheat supplies in the U.S. and around the world, which is making it difficult for the U.S. to export wheat. Early Thursday, USDA said last week's export sales and shipment of wheat totaled 21.6 and 11.1 million bushels, higher sales than what we've seen. Total wheat shipments however, are still down 8% in 2017-18 from a year ago -- a bearish pace that is not threatening U.S. wheat supplies. The most positive thing that can be said for Chicago wheat (and corn) prices at this time is that commercials are net long, which means that they are finding attractive value in these cheap prices. As long as there is no threat to supplies however, noncommercial traders feel safe in their short positions and the trend remains down. DTN's National SRW index closed at $3.79 Wednesday, priced 38 cents below the March contract and up from its lowest price in seven months. Among December contracts, there were 20 delivery intentions for Chicago wheat and 97 for K.C. wheat early Thursday, a short final day of trading.

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

FollowTodd on Twitter @ToddHultman1

(BAS)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.