DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CST, USDA announced 9.6 million bushels (260,000 mt) of U.S. soybeans were sold to unknown, 2.4 million bushels (65,000 mt) of which were for 2017-18 and the rest for 2018-19. Earlier Wednesday, most commodities were higher, but grains were mixed and traders cautious, facing three USDA reports on Friday and hearing news that China may slow purchases of U.S. Treasuries.

Other Markets:

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

Corn:

March corn was up 3/4 cent early Wednesday, staying quietly sideways in the midst of modest turmoil in financial markets. The March U.S. dollar index is down 0.43 and March U.S. T-bonds are down over a full point after Bloomberg news reported Chinese officials recommended their country either halt or slow purchases of U.S. Treasury securities. Most commodities are trading higher early Wednesday, but grains are quietly mixed with traders understandably wondering if this is another sign of growing hostility toward the U.S. from the world's largest soybean buyer. So far, corn is playing the role of innocent bystander and continues to hold above the December low of $3.46 1/2 by a slim margin. DTN's National Corn Index closed at $3.16 Tuesday, priced 33 cents below the March contract and near its highest price in four months. In outside markets, February gold is up $6.00 and February crude oil is up 48 cents at its highest spot price in three years.

Soybeans:

At 8 a.m. CST, USDA announced 9.6 million bushels (260,000 mt) of U.S. soybeans were sold to unknown, 2.4 million bushels (65,000 mt) of which were for 2017-18 and the rest for 2018-19. At the morning break, March soybeans were down 2 1/4 cents and March soybean meal was down $1.20, pressured by rain in this week's forecast for Argentina and news explained above that China may stop buying U.S. Treasury securities. The news comes at a time when U.S. soybean exports have been down from a year ago and one month after USDA negotiated stricter soybean shipment standards on cargoes headed to China. As one-half of U.S. soybeans are dependent on exports and China is the world's largest buyer, Wednesday morning's news adds to bearish concerns about the future of U.S. trade relations with China and how they might impact soybean prices. For now, the trend remains down in March soybeans while March soybean meal is still holding sideways, above support at $314.80. DTN's National Soybean Index closed at $8.93 Tuesday, priced 71 cents below the March contract and up from its lowest price in three months. Among January contracts, delivery intentions totaled 21 for soybeans, 99 for soybean meal, and 140 for soybean oil early Wednesday. January grain futures contracts expire early Friday.

Wheat:

March K.C. wheat was up 1 1/4 cents early Wednesday, not showing much concern about a return of subfreezing temperatures to the southwestern U.S. Plains from Thursday into next week. Also like corn, winter wheat is not showing much reaction to Wednesday's lower U.S. dollar index as concerns about China don't directly impact wheat prices. Friday's USDA reports are not apt to be much help to wheat prices as USDA will remind us again that there is plenty of wheat available in the U.S. and around the world. A smaller planting of U.S. winter wheat is expected, but is not likely to change the minds of bearish traders. For now, the trend in winter wheat prices remains sideways, supported in part by concerns about how U.S. winter wheat crops will look in the spring. DTN's National SRW index closed at $4.01 Tuesday, priced 31 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

(BAS)

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