DTN Before The Bell Grain Comments

Grains, Commodities Mostly Lower

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

Morning CME Globex Update:

Corn, soybeans, and all three wheats were starting quietly lower Thursday, not finding much to trade on in these first few days of 2018. The March U.S. dollar index is down 0.25 even though ADP reported higher private sector job growth in December than was expected.

Other Markets:

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

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Corn:

March corn was down a half-cent early Thursday, staying near the middle of its narrow, 14-cent trading range of the past month. There is not a lot happening to change perceptions that U.S. corn supplies are abundant and between the frigid temperatures across the Corn Belt and slow pace of U.S. exports, it seems likely that not much corn is moving out of the country. Fortunately for producers, feed and ethanol demand remain supportive factors through these winter months and commercials see enough demand to be net long at these lower prices. One source of uncertainty continues to be Argentina where conditions have been drier and this week's forecast remains mostly dry with periods of hot temperatures. For now, the trend in March corn is sideways, at a stalemate. DTN's National Corn Index closed at $3.19 Wednesday, priced 34 cents below the March contract and at its highest price in four months. In outside markets, the March U.S. dollar index is down 0.25 after this week's manufacturing reports showed increased growth around the globe. According to RTTNews.com, ADP said 250,000 new private sector jobs were added in December, more than expected ahead of Friday's monthly unemployment report. Outside commodities are mostly lower.

Soybeans:

March soybeans were down 3 1/4 cents early Thursday with small losses in both, soybean meal and soybean oil. While Brazil's crops have had plenty of rain the past month and have more expected in this week's forecast, Argentina has been on the opposite end of the spectrum with light rain totals and only light amounts expected in the week ahead with hot temperatures adding to the mix. The situation in Argentina is not considered serious, but remains enough of a threat to yields that soybean prices have not yet followed through yet on the new three-month low that March soybeans made in mid-December. So far, the trend remains down in March soybeans with commercial net longs suggesting that soybean demand may be better than expected. USDA's weekly report of export sales will be released Friday morning, due to the holiday schedule. DTN's National Soybean Index closed at $8.97 Wednesday, priced 72 cents below the March contract and up from its lowest price in over two months. Among January contracts, delivery intentions totaled 21 for soybeans and 300 for soybean meal early Thursday.

Wheat:

March Chicago wheat was down 2 1/2 cents early, showing reluctance near its highest prices in four weeks, even though sub-freezing temperatures were back in the southwestern U.S. Plains again on Thursday morning. Winter wheat prices have gotten modest benefit from the recent stretch of cold weather and dry conditions, but as has been said numerous times, it is just too early for traders to show any concern outside of lifting some of their short positions as a cautionary measure. While the U.S. has experienced an arctic blast, wheat crops in the Black Sea region have had unusually warm conditions and are at risk from not having gone dormant yet. So here at the start of 2018, there are potential risks to the next wheat crops, but we are still months away from knowing how serious they might be. For now, the trend in winter wheat is sideways with bullish changes in momentum showing up in the weekly and monthly stochastic indicators. DTN's National SRW index closed at $4.03 Wednesday, priced 33 cents below the March contract and at its highest price in over two months.

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

Follow Todd on Twitter @ToddHultman1

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Todd Hultman