Morning CME Globex Update:
After posting big gains on Monday, Tuesday's grains are starting quieter with corn and Chicago wheat slightly lower. Soybeans and meal on the other hand, are modestly higher with help from early commercial buying and another day of dry weather in Argentina.
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March corn was unchanged early Tuesday after quiet overnight trading. Prices are still challenging the upper end of their three-month range, helped by dry weather concerns in Argentina that are expected to continue this week with hotter temperatures returning the next few days. Here in the U.S., the seven-day forecast is mostly dry, except for the anticipation of rain in the eastern and southeastern Corn Belt. Cash corn prices continue to slowly climb out of last fall's harvest-depressed hole, but still have a ways to go before they could be considered tempting for farmer selling. For now, the trend in March corn remains up with support from the persistence of Argentina's dry crop conditions. DTN's National Corn Index closed at $3.36 Monday, priced 31 cents below the March contract and at a new six-month high. In outside markets, the March U.S. dollar index is down 0.46 as investors show an easing of the need to raise cash.
March soybeans were up 3 cents at the morning break, bolstered by early commercial buying in soybean meal as Argentina looks at another day without rain. Temperatures are milder early this week, but the heat is expected to return as the week progresses. Meanwhile, Brazil is also expected to be mostly dry on Tuesday, helpful for soybean harvest progress and the planting of the second corn crop. Here in the U.S., the bearish concern for soybean prices has been tied to this season's lack of exports. Monday's announcement that China cancelled the previous purchase of 16.7 million bushels of U.S. soybeans did not help the outlook for exports. On the other hand, crush incentives for U.S. soybeans, based on March futures prices are at their highest level since 2002 and Thursday's crush report from the National Oilseed Processors Association (NOPA) should reflect that with a higher crush total for January. Technically, the trend in March soybeans remains sideways, but a close of $10.05 or higher would turn the trend higher. DTN's National Soybean Index closed at $9.33 Monday, near its highest prices in six months and priced 69 cents below the March contract.
March Chicago wheat was down a penny early Tuesday, but is staying close to its highest prices in four months with ongoing concerns of dry winter conditions in the western U.S. Plains. Tuesday's seven-day forecast does expect rain from eastern Texas to the mid-Atlantic coast, which will include SRW wheat areas of the eastern Midwest. The western Plains, however, remain mostly dry with only light amounts expected. In the extended forecast, the western Plains show better chances for moisture, but the forecast will need to be monitored. At this point in February, it is impossible to say how the 2018 winter wheat crop will turn out, but at least the dry conditions have given the short side of the market reason to lighten their positions and has helped this winter's wheat prices. For now, the trend in winter wheat remains up with cash prices at their highest levels in six months. DTN's National SRW index closed at $4.35 Monday, priced 29 cents below the March contract and at its highest price in six months.
Todd Hultman can be reached at firstname.lastname@example.org
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