DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CST, USDA announced 4.4 million bushels (120,000 mt) of U.S. soybeans were sold to Egypt and another 4.85 million bushels (132,000 mt) of soybeans were sold to unknown, both for 2017-18. 3.75 million bushels (102,100 mt) of U.S. corn were sold to Mexico for 2017-18. Earlier, corn was holding steady, but soybeans, and all three wheats were starting modestly lower while the March U.S. dollar index was higher, helped by expectations for more rate hikes in 2018.

Other Markets:

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

Corn:

At 8 a.m. CST, USDA announced 3.75 million bushels (102,100 mt) of U.S. corn were sold to Mexico for 2017-18. Earlier, March corn was unchanged, staying within its narrow, sideways range ahead of Friday's WASDE and Grain Stocks reports. Friday is apt to be another reminder of how much surplus corn is available and the new season's slow pace of exports won't be any help in making USDA's estimates look less bearish. Friday's CFTC data showed noncommercials still bearish in corn with 69,731 net shorts as of Jan. 2. Commercials reduced net longs from 57,446 to 51,199 and remain corn's primary source of support at these low prices. Trading is apt to continue to be restrained this week ahead of Friday's report. For now, the trend in March corn is sideways while cash prices show steady improvement. DTN's National Corn Index closed at $3.17 Friday, 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 0.37 with many expecting more interest rate increases in 2018.

Soybeans:

At 8 a.m. CST, USDA announced 4.4 million bushels (120,000 mt) of U.S. soybeans were sold to Egypt and another 4.85 million bushels (132,000 mt) of soybeans were sold to unknown, both for 2017-18. Before the announcements, March soybeans were down 3 cents, but still holding sideways the past couple of weeks while Monday's higher U.S. dollar index puts early bearish pressure on several commodities. Like corn, soybeans are also facing a new round of monthly estimates from USDA, which may show bearish adjustments for this season's slower-than-expected export pace. Friday's report of new marketing year low export sales for corn, soybeans, and wheat did not help the case for grain prices either. This week's forecast continues to look favorable for Brazil with more rain expected while Argentina stays drier. Friday's CFTC data showed noncommercials added to net shorts in soybeans, going from 23,331 to 44,754 as of Jan. 2. Commercials added to net longs for a third week and are now holding 77,954, the most since July. Fundamentally, it is difficult to find anything bullish for soybeans unless Argentina's situation grows worse. Technically, the trend remains down in March soybeans with commercials offering dissent on the long side. DTN's National Soybean Index closed at $8.99 Friday, 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 226 for soybean meal early Monday.

Wheat:

March Chicago wheat was down 3 1/2 cents early Monday, pressured by commercial selling while the southern Plains enjoys a few days of warmer weather before sub-freezing temperatures return to the region on Thursday. It is difficult to guess just how much damage the past couple of weeks of cold and dry weather has caused winter wheat crops and to traders' credit, they have not over-reacted to the situation other than to cover some of their shorts. Friday's CFTC data showed noncommercials a little less bearish in Chicago wheat with 83,238 net shorts as of Jan. 2. Commercials reduced net longs to 84,887, but remain the main source of support for prices. Overall, winter wheat prices are likely to keep trading sideways with another round of bearish estimates expected in Friday's reports from USDA. DTN's National SRW index closed at $3.99 Friday, 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

(BAS)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.