DTN Before The Bell Grain Comments

Morning CME Globex Update:

March corn, soybeans, and winter wheat were all a little lower early Wednesday after achieving some form of new highs on Tuesday. The March U.S. dollar index is trading lower even though ADP reported a larger increase of private sector jobs in January than was expected. At 8 a.m. CST, USDA announced 5.7 million bushels (145,000 mt) of U.S. corn were sold to unknown destinations for 2017-18.

Other Markets:

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

Corn:

At 8 a.m. CST, USDA announced 5.7 million bushels (145,000 mt) of U.S. corn were sold to unknown destinations for 2017-18. March corn was down 3/4 cent earlier Wednesday, easing back from Tuesday's new two-month high after posting a couple weeks of steadily higher prices. Wednesday's weather map has snow around the Great Lakes, but is mostly dry for the rest of the Corn Belt, as is the seven-day forecast. This week's forecast for Argentina remains mostly dry, but there is a chance for beneficial rains to come through on Sunday and Monday. Fundamentally, this year's corn supplies are keeping bearish pressure on prices while corn exports are down one-third from a year ago. Technically, March corn prices have been gradually rising, in line with their seasonal tendencies. DTN's National Corn Index closed at $3.30 Tuesday, priced 32 cents below the March contract and at its highest price in five months. In outside markets, the March U.S. dollar index is down 0.32, even after RTTNews.com reported ADP's count of private sector jobs increased 234,000 in January, more than expected. The Federal Reserve will wrap up its two-day meeting later Wednesday.

Soybeans:

March soybeans were down 5 1/4 cents early with chances for rain in Argentina on Sunday and Monday, while the rest of the week's forecast for Argentina remains mostly dry. In Brazil, this week's forecast expects heavy rains, which is bad timing for their soybean harvest. Overall however, it seems fair to expect Brazil's 4.0 billion bushel crop will eventually make it to port and that is keeping traders cautious at these higher prices. While the 50-cent rally of the past few weeks has been impressive and started with an active buying response from commercials, it seems that weather problems will have to get worse to keep pushing prices higher. For now, the short-term trend is up in March soybeans, but the overall trend continues to chop sideways within the wide range set this summer. DTN's National Soybean Index closed at $9.32 Tuesday, its highest in over a month and priced 69 cents below the March contract.

Wheat:

At the morning break, March Chicago wheat was down 4 1/2 cents and March K.C. wheat was down 4 3/4 cents, taking modest pauses after five consecutive sessions of higher closes. The southwestern U.S. Plains are still dry with some spots in northern Texas possibly reaching 80 degrees Wednesday. The seven-day forecast remains mostly dry for the winter wheat region. After March K.C. wheat prices rallied over 40 cents the past week, it is reasonable to expect that a decent amount of short-covering has taken place and is also fair to wonder if much potential for higher prices is left. After all, winter wheat is not in short supply and it is still only January. Technically, the trend in winter wheat remains up. DTN's National SRW index closed at $4.27 Tuesday, priced 30 cents below the March contract and at its highest price in five months.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

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