DTN Before The Bell Grain Comments

Morning CME Globex Update:

The final morning of trading in 2017 is looking a lot like any other morning the past three months with corn and wheat under pressure and none of the top three showing much change. March soybean meal is up $2.30 early, still holding above the support of its November low.

Other Markets:

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

Corn:

March corn was down a penny early on another cold December morning across the Corn Belt with even colder temperatures expected over the weekend and on Monday. The seven-day forecast is mostly dry, so travel is possible but not pleasant, with patches of snow falling from Iowa to Montana. Corn prices remain plagued by heavy supplies and slow U.S. exports and even though U.S. corn prices are now cheaper than Brazil's, the export pace remains bearish. Early Friday, USDA said last week's export sales and shipments of corn totaled 49.0 million bushels (mb) and 20.5 mb respectively, bearish amounts that have total shipments down 36% in 2017-18 from a year ago. Corn has fallen to a cheap enough prices that commercials are willing to offer support, but the trend remains down with noncommercial traders clinging to a bearish outlook. DTN's National Corn Index closed at $3.17 Thursday, priced 35 cents below the March contract and near its highest price in four months. In outside markets, the March U.S. dollar index is trading down 0.29 at its lowest prices in three months as Europe has shown better signs of growth toward the end of 2017.

Soybeans:

March soybeans were up 1 3/4 cents at the start of the final trading day of 2017 but also near its lowest prices in four months as favorable weather in South America is supporting estimates for another big soybean harvest in early 2018. The latest seven-day forecast expects more rain for major crop areas in Brazil and Argentina. U.S. soybean exports have been disappointing in 2017-18 and that bearish trend continues. Early Friday, USDA said export sales and shipments of U.S. soybeans totaled 35.8 mb and 51.8 mb respectively, a bearish combination for the week that has total shipments down 14% in 2017-18 from a year ago. One of the factors for this year's lower export pace is the lower protein content in the U.S. mentioned by Bloomberg news on Wednesday. According to Bloomberg, 34% protein in the U.S. does not compete well against 37% protein in Brazil and explains part of the reason U.S. exports are dragging even though FOB prices are 37 cents a bushel cheaper at the U.S. Gulf. Technically, the trend in March soybeans is down with good crop conditions supporting a bearish fundamental outlook in early 2018. March soybean meal is the final sliver of bullish hope in 2017, still holding above the support of its November low. DTN's National Soybean Index closed at $8.80 Thursday, priced 77 cents below the March contract and near its lowest price in over two months.

Wheat:

March Chicago wheat was down 3/4 cent early Friday, ready to finish the year near its lowest spot price in eleven years. Wheat prices have inched higher the past couple weeks with help from dry conditions in the western Plains and subfreezing temperatures reaching into northern Texas. However, these threats only have minimal price impact at this time of year with noncommercials staying heavily bearish and unconvinced that anything significant has changed. Early Friday, USDA said last week's export sales and shipments of wheat totaled 17.6 and 19.3 million bushels respectively, a bearish combination for the week that has total shipments down 6% in 2017-18 from a year ago. Even though it is slightly better than USDA's estimated pace, it still does nothing significant to reduce wheat's great surplus. Technically, the trend remains down in winter wheat and prices remain historically cheap. DTN's National SRW index closed at $3.94 Thursday, priced 34 cents below the March contract and near its highest price in three months.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd on Twitter @ToddHultman1

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