DTN Before The Bell Grain Comments

Morning CME Globex Update:

All three grains backed down from earlier prices after USDA's weekly report of export sales showed new marketing year lows for corn, soybeans, wheat, and pork -- poor weekly showings even for Christmas.

Other Markets:

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

Corn:

March corn was down a quarter-cent early Friday, staying with its sideways winter path while little is happening to persuade traders out of their bearish positions. Here in the U.S., temperatures are expected to warm gradually this weekend while conditions stay mostly dry around the Corn Belt, favorable for moving grain in the new calendar year even though prices are not offering much incentive. In South America, the same pattern of rain across Brazil while Argentina gets lighter amounts is still intact with hot temperatures this week in Argentina. Even though U.S. corn prices are currently cheaper than Brazil's, exports are showing no signs of picking up yet. USDA said early Friday that last week's export sales and shipments of corn totaled 4.0 and 25.9 million bushels respectively, a bearish combination for the holiday week that has total corn shipments down 35% from a year ago. The scant amount of corn sales represented a new marketing year low and was pathetic, even for Christmas week. For now, the trend in March corn futures remains down while cash corn prices continue to firm. DTN's National Corn Index closed at $3.17 Thursday, priced 34 cents below the March contract and near its highest price in four months. In outside markets, the March U.S. dollar index is up 0.06 after the U.S. Labor Department said nonfarm payrolls increased 148,000, less than was expected.

Soybeans:

March soybeans were up 2 3/4 cents early Friday, boosted by a $1.20 gain in March soybean meal with signs of earlier commercial buying. Buying in meal is typically linked to crop concerns in Argentina and this week's hot temperatures may prove stressful to crops with only light rain amounts expected. For now, Argentina's situation is providing just enough concern to stop the December slide in soybean prices, but it will take more time to see how this turns out. Early Friday, USDA said last week's export sales and shipments of soybeans totaled 20.4 and 42.2 million bushels respectively, a bearish combination with a new marketing year low for sales. Total soybean shipments are now down 14% in 2017-18 from a year ago. The trend in March soybeans remains down with commercials willing to stay net long, offering dissent while crop size is still uncertain down south. DTN's National Soybean Index closed at $8.96 Thursday, 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 298 for soybean meal early Friday.

Wheat:

March Chicago wheat was down 3 1/4 cents early, falling back from its four-week high with temperatures gradually warming across the southern U.S. Plains. That doesn't mean crops escaped damage last week as we won't know that answer for a few months, but there are limits as to how bullish this whole scenario of winter threat is to a market that is already well-supplied with wheat. Early Friday, USDA said last week's export sales and shipments of wheat totaled, 4.8 and 8.4 million bushels respectively, a new marketing year low for wheat sales and barely enough to talk about. Total wheat shipments are now down 8% in 2017-18 from a year ago. Technically, the trend in March Chicago wheat remains sideways while cash prices have shown steady improvement since early December. The improvement in cash prices goes along with commercials being net long and are good signs of support for prices at the cheaper levels. DTN's National SRW index closed at $4.02 Thursday, priced 32 cents below the March contract and near 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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