DTN Before The Bell Grain Comments

Soybeans Sag Lower, Corn Sales Pick Up

Todd Hultman
By  Todd Hultman , DTN Grains Analyst
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(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

At 8 a.m. CST, USDA announced 7.7 million bushels (195,000 mt) of U.S. corn were sold to unknown destinations, 6.7 million bushels (170,000 mt) of corn were sold to Egypt, and 4.0 million bushels (108,860 mt) of U.S. soybeans were sold to Mexico, all for 2017-18. Earlier, corn was steady, but soybeans and all three wheats were starting lower Friday, showing caution after rallies in late-January.

Other Markets:

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

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Corn:

At 8 a.m. CST, USDA announced 7.7 million bushels (195,000 mt) of U.S. corn were sold to unknown destinations and 6.7 million bushels (170,000 mt) of corn were sold to Egypt, both for 2017-18. March corn was unchanged earlier Friday, not showing much movement the past few days after reaching the upper end of its three-month range. Early Friday, bitter cold temperatures cover much of the Corn Belt, but conditions are mostly dry and are expected to stay that way in the central and western Corn Belt while the eastern Corn Belt and southeastern U.S. have better chances for precipitation in the week ahead. Friday's satellite map shows rain in central Brazil, but clear skies over Argentina where more rain is needed. Overall, corn prices remain on the low end of their ten-year range, weighed down by ample supplies. More recently, March corn is gradually working higher, in line with its seasonal tendency and is starting to see a gradual improvement in export activity. DTN's National Corn Index closed at $3.31 Thursday, priced 31 cents below the March contract and near its highest price in five months. In outside markets, the March U.S. dollar index is up 0.55 and Dow Jones futures are lower after the U.S. Labor Department said nonfarm payrolls increased by 200,000 in January, more than was expected. The unemployment rate was unchanged, at 4.1%.

Soybeans:

At 8 a.m. CST, USDA announced 4.0 million bushels (108,860 mt) of U.S. soybeans were sold to Mexico for 2017-18. March soybeans were down 5 1/2 cents earlier Friday, pressured by the anticipation of Brazil's harvest and related lack of export business in the U.S. The latest seven-day forecast for Argentina remains dry and yield is likely being lost, but concerns about Argentina have not had the same impact on prices lately, knowing that a big crop is on the way from Brazil. Thursday's report from USDA that soybean sales only totaled 13.2 million bushels last week was a tangible reminder that China has been able to skate by with minimal U.S. business and is now looking at roughly seven more months of soybean supply, thanks to Brazil's big crop. There is still uncertainty about Argentina's row crops and that seems to be the only thing preventing soybean prices from falling to new lows. For now, the trend in March soybeans continues to chop sideways while the fundamental outlook leans bearish. DTN's National Soybean Index closed at $9.17 Thursday, down from its highest in over a month and priced 68 cents below the March contract.

Wheat:

March Chicago wheat was down 3 3/4 cents early, easing back from Tuesday's new three-month high with rain in the seven-day forecast for the eastern Midwest. March K.C. wheat is down 3 1/4 cents with temperatures in the teens in Kansas and no significant precipitation expected in the southwestern U.S. Plains the next seven days. There are no red flag warnings on Friday's weather map, but wildfires are a risk in the region. The forecast for March expects more dry weather ahead and cash HRW wheat prices are now near their highest prices in over six months. The risk, of course, is that rain could still appear by spring and revive the winter crop so traders are likely to be cautious about pushing prices much higher until more is known. For now, the trend in winter wheat is up. DTN's National SRW index closed at $4.22 Thursday, priced 29 cents below the March contract and down from 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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Todd Hultman