DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CST, USDA announced 12.6 million bushels (320,000 mt) of U.S. corn were sold to unknown destinations for 2017-18. Corn, soybeans, and all three wheats were all within a cent of Thursday's closes ahead of Friday's three USDA reports: WASDE, Grain Stocks, and Winter Wheat Seedings. The U.S. dollar index is trading near its lowest prices in three years as Europe continues to show signs of improvement.

Other Markets:

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

Corn:

At 8 a.m. CST, USDA announced 12.6 million bushels (320,000 mt) of U.S. corn were sold to unknown destinations for 2017-18. Earlier, March corn was up a half-cent Friday, continuing to hover a few cents above its 2017 low of $3.46 1/2 as traders await USDA's WASDE and Grain Stocks reports, due out at 11 a.m. CST. Dow Jones's survey does not expect much change in USDA's estimate of a 14.58 billion bushel harvest, but a surprise adjustment is possible and will be the first thing watched for. The bearish concern in Friday's numbers comes from corn's slow export pace and analysts' estimate of 12.41 billion bushels of corn on Dec. 1 may be too low. Otherwise, there has not been much happening to move corn prices in January and cash corn is holding near its highest prices in four months. For now, the trend in March corn futures remains sideways with noncommercial traders finding no reason to turn bullish. DTN's National Corn Index closed at $3.15 Thursday, priced 33 cents below the March contract and near its highest price in four months. In outside markets, the March U.S. dollar index is down 0.37 as Europe continues to show signs of improvement and Germany's government is getting closer to having a working coalition. The U.S. Labor Department said consumer prices were up .1% in December and up 2.1% from a year ago, as expected.

Soybeans:

March soybeans were down 3/4 cent early Friday, still near its lowest prices in four months as crops in South America are doing generally well ahead of Friday's USDA reports. On Thursday, Brazil's government increased its soybean crop estimate from 109.2 to 110.4 mmt, which is a little more than 4 billion bushels. USDA's 2017 crop estimate for the U.S. of 4.425 billion bushels is not expected to change in Friday's WASDE report, but ending stocks are expected to rise from 445 to 477 million bushels. As with corn, soybeans' slow export pace presents a bearish concern in Friday's reports. According to Dow Jones, analysts are expecting 3.19 billion bushels of soybean stocks on Dec. 1. After Friday, traders' focus will be back on South America's weather and concerns about trade relations between the U.S. and China. For now, the trend in March soybeans is down, supported by a bearish perception of fundamental supplies. DTN's National Soybean Index closed at $8.79 Thursday, at a new three-month low and priced 71 cents below the March contract. Among January contracts, delivery intentions totaled 63 for soybeans, 47 for soybean meal, and 46 for soybean oil early Friday, the final day of trading for January grain futures.

Wheat:

March Chicago wheat was up a half-cent early, staying near, but not exceeding its highest prices in five weeks as traders get ready to hear what are expected to be another round of bearish wheat numbers from USDA. According to Dow Jones, analysts are expecting to see 962 million bushels of U.S. ending wheat stocks and 1.85 billion bushels of Dec. 1 wheat stocks, representing plenty of supplies. Winter wheat seedings are expected to drop from 32.7 million acres in 2017 to 31.4 in 2018, the lowest since 1909, if true. At the same time, winter conditions for the new crop have been harsh lately and Kansas woke up to single digit temperatures on Friday and a new seven-day forecast that still looks mostly dry. A pleasant, wet spring could change things, but for now, winter wheat prices remain sideways, near their lowest spot level in eleven years. DTN's National SRW index closed at $4.01 Thursday, priced 32 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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