DTN Before The Bell Grain Comments

Morning CME Globex Update:

Corn and soybeans were slightly higher at the morning break as traders await USDA's 11 a.m. WASDE report. USDA's report of weekly export sales was bearish for corn, wheat, and soybeans.

Other Markets:

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

Corn:

March corn was up a quarter-cent early Thursday, staying near its highest prices in three months as traders wait for USDA's WASDE report, due out at 11 a.m. CST. Dow Jones' pre-report survey is not expecting much change in USDA's estimate of U.S. ending corn stocks, but crop estimates for both, Brazil and Argentina, are expected to be adjusted lower. In the case of Argentina, Thursday's satellite map is mostly clear again with hot temperatures expected to stress crops one more day before relief comes in the form of cooler temperatures and light showers. Early Thursday, USDA said last week's export sales and shipments of corn totaled 69.7 and 37.8 million bushels respectively, a bearish combination for the week that has total shipments down 29% in 2017-18 from a year ago. Overall corn supplies are still heavy in this market, but the focus on harvest has eased while domestic demand has helped to lift cash corn prices this winter. For now, the trend remains up in March corn with supportive data expected to be released in Thursday's WASDE report. DTN's National Corn Index closed at $3.35 Wednesday, priced 30 cents below the March contract and at its highest price in six months. In outside markets, Dow Jones futures are up 105 points while the March U.S. dollar index is down 0.09, even after the U.S. Labor Department said jobless claims fell to 221,000 last week, less than expected.

Soybeans:

March soybeans were up 1 3/4 cents early Thursday, an optimistic start for a market that could receive bearish news in USDA's WASDE report at 11 a.m. CST. Dow Jones' expects USDA to increase its estimate of U.S. ending stocks from 470 to 492 million bushels -- within striking distance of 500 million bushels as U.S. exports have been disappointing so far in 2017-18. The other possible bearish hit could take the form of a higher soybean crop estimate for Brazil. USDA's January estimate of 110.0 mmt was raised to 112.5 mmt (4.13 bb) by USDA's attache in Brazil on Wednesday, but the attaches report may or may not be used in Thursday's WASDE report. Early Thursday, Dow Jones reported Brazil's government raised its soybean crop estimate to 111.6 mmt (4.10 bb). USDA said last week's export sales and shipments of soybeans totaled 27.3 and 56.5 million bushels respectively, both more than the previous week, but still bearish amounts. Total soybean shipments are down 14% in 2017-18 from a year ago. Fundamentally, the outlook for soybeans continues to lean bearish, but technically, the trend in March soybeans remains broadly sideways with ongoing concerns about Argentina. DTN's National Soybean Index closed at $9.15 Wednesday, holding in its sideways range and priced 68 cents below the March contract.

Wheat:

March Chicago wheat was down 2 1/4 cents early, correcting back from Wednesday's new three month high, but staying well-supported in its uptrend. USDA's wheat estimates are not expected to show much change in Thursday's WASDE report and will likely be more influenced by the seven-day forecast that still looks dry for the western U.S. Plains and whatever corn might do after USDA's report is released. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 14.5 and 17.2 million bushels respectively, a bearish combination that is not having much impact on excess wheat supplies. The fact that both winter wheats posted new highs Wednesday in the face of a higher U.S. dollar and lower commodity prices shows just how seriously traders are taking this winter's threat of dry weather in the U.S. Thursday's U.S. Drought Monitor showed an increased area of extreme drought around the Texas Panhandle. For now, the trends in winter wheat remain up. DTN's National SRW index closed at $4.31 Wednesday, priced 30 cents below the March contract and near its highest price in six months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(KR)

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