DTN Early Word Grains

Green Light for Grains, Most Commodities

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
Connect with Todd:
6:00 a.m. CME Globex:

March corn was up 1 1/2 cents, March soybeans were up 3 1/2 cents, and March Chicago (SRW) wheat was up 1 cent.

CME Globex Recap:

Except for modest losses in energies, the rest of the commodity board is mostly higher early Friday, including nearly every grain and soybean contract. Stocks around the globe are also trading higher, including a 98 point gain in Dow Jones futures.

OUTSIDE MARKETS:

On Thursday, the Dow Jones Industrial Average closed down 97.84 points (-0.4%) at 26,017.81, the NASDAQ Composite was down 2.23 points (-0.03%) to 7,296.05, and the S&P 500 was down 4.53 points (-0.2%) to 2,798.03. DJIA futures were 98 points higher early Friday morning. Asian markets were mostly higher early Friday with Japan's Nikkei 225 up 44.69 points (0.2%), Hong Kong's Hang Seng up 132.95 points (0.4%), and China's Shanghai Composite adding 13.11 points (0.4%). European markets were also trading higher with London's FTSE 100 up 19.25 points (0.2%), Germany's DAX up 121.32 points (0.9%), and France's CAC 40 gaining 25.52 points (0.5%). The euro gained 0.0245 to 1.2305 as the U.S. dollar index fell 0.15 to 90.33. March 30-year T-Bonds were 10/32 lower at 149'04 while February gold was up $7.50 to $1,334.70. Crude oil was $0.35 lower at $63.54 while Brent crude lost $0.40 to $68.91. China's Dalian soybean prices were mixed to lower and Malaysian palm oil futures were 1.25% lower overnight.

BULL BEAR
1) March corn's recovery from Friday's new contract low is a good sign of support. 1) The highest cash corn prices in five months may entice some selling among producers.
2) Even though soybean shipments are down, crush activity is up and meal shipments are also higher than a year ago. 2) U.S. soybean exports are down from a year ago, related to the anticipation of a 4.0 billion bushel crop from Brazil.
3) The western and southern U.S. Plains are dry with some areas of extreme drought. 3) Winter wheat is a winter crop, meaning it is still too early to get overly concerned by fluctuating weather.

The weekly Newsom on the Market column can be found on subscription sites only. On DTN Pro it is in News/Town Hall and on MyDTN in News/Columns.

MORE COMMODITY-SPECIFIC COMMENTS

CORN March corn is up 1 1/2 cents early Friday, not a big move, but steadily higher ahead of USDA's weekly report of export sales, due out at 7:30 a.m. CST. The U.S. export pace for corn has been sluggish this season, down 32% from a year ago after Brazil and Argentina had much larger crops in 2017. FOB corn prices are now 16 cents cheaper at the U.S. Gulf than at Brazil's ports so it is fair to expect U.S. business to improve, but so far, there hasn't been much sign of that happening. With U.S. ending corn supplies running high in 2017-18, noncommercial traders continue to ride the short side of the market while commercials lend enough support to keep the trend in March corn sideways for now.

SOYBEANS March soybeans are up 3 1/2 cents early, near their highest prices in a month while Friday's satellite map looks mostly dry, except for rain in southern Brazil. The seven-day forecast is also mostly dry, except for rain expected in northern Argentina. Friday morning's export sales report from USDA is likely to show a bearish pace once again while Brazil appears to be headed to a 4.0 billion bushel harvest in early 2018. Overall, the fundamental outlook for soybeans remains bearish and the trend in March soybeans is still down. However, it remains curious as to why commercials would aggressively add to net longs with Brazil's next harvest drawing near.

WHEAT March Chicago (SRW) wheat is up 1 cent early, holding a sideways range through winter. It is not unusual for winters to offer some challenge to winter wheat crops and this one has had a couple of stretches of bitter cold temperatures. The bigger threat this year however, has been the abnormally dry to drought conditions that have set in the western and southern Plains. On Thursday, the Climate Prediction Center said they expect drought conditions to persist in the southwestern Plains through the end of April while the northwestern Plains are expected to show improvement. For now, the trend in Chicago wheat remains sideways with noncommercials heavily short and commercials long -- a familiar standoff that is likely to keep prices roughly sideways until spring.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.20 -$0.02 -$0.32 Mar -$0.001
Soybeans: $9.05 $0.05 -$0.68 Mar $0.005
SRW Wheat: $3.95 $0.06 -$0.31 Mar $0.021
HRW Wheat: $3.86 $0.03 -$0.44 Mar $0.009
HRS Wheat: $5.92 $0.00 -$0.19 Mar $0.010

Todd Hultmancan be reached at todd.hultman@dtn.com

Toddcan be followed throughout the day @ToddHultman1

(BAS)

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Todd Hultman