DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CST, USDA announced 5.1 million bushels (130,000 mt) of U.S. corn were sold to South Korea for 2017-18. 7.3 million bushels (198,600 mt) of U.S. soybeans were sold to unknown destinations, 4.85 million bushels of which (132,000 mt) were for 2017-18 and the rest were for the following season. Corn, soybeans, and winter wheat were all lower early Monday with bearish influence coming from nervous financial markets as Dow Jones futures are extending Friday's 666-point loss.

Other Markets:

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

Corn:

At 8 a.m. CST, USDA announced 5.1 million bushels (130,000 mt) of U.S. corn were sold to South Korea for 2017-18. March corn was down 3 cents earlier, having run into a buzz saw of investor concerns as Dow Jones futures are lower again Monday morning, following Friday's 666-point drop. Concerns about rising interest rates are behind this latest move to cash and are having bearish influence on commodity prices, in general. There may also have been a modest selling response in corn after Friday's CFTC data showed noncommercials turned slightly bullish as of Jan. 30, taking on 13,754 net longs for the first time since August. Commercials took advantage of corn's highest close in two months and let go of all their net longs, taking on 21,012 net shorts. Technically, the trend in March corn is still up, but breaking above the three-month high at $3.65 may be difficult in this nervous financial environment. DTN's National Corn Index closed at $3.31 Friday, priced 31 cents below the March contract and at its highest price in five months. In outside markets, the March U.S. dollar index is up 0.06, holding roughly steady while the Dow Jones futures is down 156 points.

Soybeans:

At 8 a.m. CST, USDA announced 7.3 million bushels (198,600 mt) of U.S. soybeans were sold to unknown destinations, 4.85 million bushels (132,000 mt) of which were for 2017-18 and the rest were for the following season.
March soybeans were down 6 1/2 cents earlier, also succumbing to bearish influence from financial markets along with their usual concerns, such as the approach of another big soybean harvest from Brazil. Central Brazil received more rain over the weekend, but Monday's satellite map looks drier, more favorable for harvest. In Argentina, the weekend was dry with temperatures in the 90s and that is expected to continue through Wednesday, followed by a better chance for rain. Technically, the trend for March soybeans remains broadly sideways, but the inability of prices to hold last Tuesday's close above $10 plus Thursday's poor showing of export sales is keeping the fundamental outlook for soybean prices tilted in a bearish direction. Friday's CFTC data showed noncommercials cut net shorts in soybean back from 67,090 to 12,799 as of Jan. 30. Commercials reduced their net longs, but still hold 59,188 contracts net long, a sign of continued support. DTN's National Soybean Index closed at $9.10 Friday, down from its highest in over a month and priced 69 cents below the March contract.

Wheat:

March Chicago wheat was down 6 cents early, pulling back from last week's brief attempt at a new three-month high as traders continue to assess the risk of dry weather conditions this winter. The latest seven-day forecast has chances for heavy precipitation along the Delta and moderate amounts in the eastern Midwest, but the western U.S. Plains remains mostly dry. Friday's CFTC data showed noncommercials in Chicago wheat covered roughly half their net shorts as of Jan. 30, going from 95,971 to 47,294. Commercials took advantage of the highest wheat prices in over three months and reduced futures positions to 49,548 net longs -- still at prices that represent attractive value. Statistics Canada estimated all wheat stocks at 23.56 mmt on Dec. 31, down from 24.09 mmt the previous year. For now, the trend remains up in Chicago wheat with resistance at $4.59. DTN's National SRW index closed at $4.17 Friday, priced 30 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

(KR)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.