DTN Before The Bell Grain Comments

Morning CME Globex Update:

In spite of beneficial rains over the weekend in Argentina, corn and soybeans were trading higher early Tuesday, aided by commercial buying in soybean meal and a lower start in the March U.S. dollar index. Winter wheat was lower, ignoring Tuesday morning's sub-zero temperatures across Kansas.

Other Markets:

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

Corn:

March corn was up 2 cents early Tuesday, helped by a lower U.S. dollar and bargain hunting in response to Friday's new contract low. Tuesday morning's weather map has a line of snow from eastern Texas to the northeastern U.S. while sub-zero temperatures cover much of the Midwest, stressing livestock and discouraging transportation. This week's forecast is mostly dry until increased chances for precipitation appear over the weekend in the eastern Midwest. Friday's CFTC data showed noncommercials more bearish in corn as of Jan. 9, increasing net shorts from 69,731 to 86,714. Commercials increased net longs to 68,662, attracted by the value in corn's cheaper prices and continue to be a source of support. For now, the trend in March corn remains down with noncommercial traders finding no bullish arguments to counteract corn's heavy supplies. DTN's National Corn Index closed at $3.14 Friday, priced 33 cents below the March contract and down from its highest price in four months. In outside markets, the March U.S. dollar index is down 0.20, offering a little bullish influence for grains at the start of the week.

Soybeans:

March soybeans were up 7 1/4 cents Tuesday, boosted by early commercial buying in soybean meal. The higher start is a bit of a surprise as Argentina received beneficial rains over the weekend, which offered relief from last week's hotter temperatures. This week's forecast for South America looks drier overall, but does have chances for moderate showers in southern Brazil and northern Argentina. Friday's CFTC data showed noncommercials in soybeans a little more bearish with 65,433 net shorts. Commercials increased net longs for a fourth week to 97,040, the most since June. It continues to be a riddle as to why commercials are showing so much eagerness to buy soybeans when it looks like Brazil is getting closer to another big harvest. For now, the trend in March soybeans remains down. DTN's National Soybean Index closed at $8.90 Friday, up from a three-month low and priced 71 cents below the March contract.

Wheat:

March Chicago wheat was down 3 1/4 cents and March K.C. wheat was down 4 1/2 cents early Tuesday, still under pressure after Friday's bearish increase in USDA's estimate of U.S. ending wheat stocks. Kansas and Nebraska received light precipitation the past several days, but conditions are still mostly dry across the southwestern U.S. Plains and Tuesday morning's map shows sub-zero temperatures throughout Kansas. Friday's CFTC data showed noncommercials still bearish in Chicago wheat as of Jan. 9 with 78,378 net shorts. Commercials were holding net long with 80,285 contracts. It is a familiar standoff that continues to keep winter wheat prices near their lowest level in eleven years and is likely to continue, at least until spring arrives. DTN's National SRW index closed at $3.89 Friday, priced 32 cents below the March contract and down from 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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