DTN Before The Bell Grain Comments

Morning CME Globex Update:

The U.S. Dollar Index looks poised to re-test the recent low it posted on the first day of the stock market correction, which is pushing dollar-denominated ag commodity futures prices higher Thursday morning.

Other Markets:

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

Corn:

The weekly export sales report showed an impressive 1.9 million metric tons (77.7 mill. bu) of old crop corn sold, up 14 percent from the prior 4-week average and somewhat supportive to corn futures prices Thursday morning alongside the broader gains seen throughout the commodity markets. Corn shipments however, only totaled 34.0 million bushels and were down from the previous week. The stock market has demonstrated it can handle a little bearish inflation news without totally falling apart, so the overall investment environment is feeling much tamer than it did a week ago. The average price for new crop December corn futures during February trading sessions has so far calculated out to $3.94, and the average price for new crop November soybean futures has come to $10.07 -- a historically normal 2.5-to-1 price ratio, which will be increasingly hard to shift through the last nine trading sessions before crop insurance guarantees are set. Meanwhile in the old crop cash market, the DTN National Corn Index, an average of cash bids around the country, was $3.37 Wednesday, showing the national average basis level remains steady at 31 cents under the March futures contract.

Soybeans:

Another fresh high in soybean meal futures was reached overnight, suggesting that the rally -- motivated by the ongoing dry weather in Argentina -- may not be over yet. Mid-morning on Thursday, the National Oilseed Processors Association (NOPA) will release their monthly crush report, which is expected to be record-high and supportive to soybean prices, given how the soybean crush improved through the month of January with that rally in soybean meal prices. The Brazilian real has jumped above 31 cents overnight while the U.S. dollar weakened, which is another factor likely to support higher prices for U.S. dollar-denominated soybean futures.The Lunar New Year holiday in China will begin this Friday and last a full week, so this trading session is perhaps the last opportunity to see much export business from that country for a while, although the weekly export sales report was lackluster with 23.5 million bushels of sales and 50.5 million bushels of soybean shipments. Accumulated soybean exports to date remain 13 percent behind last year's pace.The DTN National Soybean Index came in at $9.48 Wednesday afternoon, showing the average U.S. cash bid remained at 69 cents under the March futures contract.

Wheat:

The most recent U.S. Drought Monitor showed some improvement in the South, where areas in D0 to D4 drought went down by 10 percentage points, and in the High Plains, where D0 to D4 areas went down by 7 percentage points over the past week, but until winter wheat fields come out of dormancy, there will still be some bullish concern reflected in the futures markets. Alberta, Saskatchewan, and Manitoba are also very dry this winter, which in a few months' time could have implications for spring wheat bullishness, too.The weekly U.S. export sales report showed 311,100 metric tons (11.4 mill. bu.) of old crop wheat sales, led by Hard Red Winter wheat. Meanwhile, old crop wheat basis bids remained steady Wednesday. The DTN HRW Index was $4.29 Wednesday, or 41 cents under the March KC contract; the SRW Index was $4.27 or 29 cents under the March Chicago contract; and the DTN Spring Wheat Index was $5.84 or 16 cents under the March Minneapolis contract.

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

(KR)

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