DTN Early Word Grains

6:00 a.m. CME Globex:

March corn was 1/4 cent lower, March soybeans were 1/4 cent lower, and July Kansas City (HRW) wheat was 1 1/4 cents lower.

CME Globex Recap:

Friday's markets find China closed for a New Year celebration, overnight stock markets mostly higher, commodities mixed to higher and grain prices steady to lower with most staying close to Thursday's closes. The March U.S. dollar index is up 0.10, holding near its January low.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 306.88 points (1.2%) higher at 25,200.37, the NASDAQ Composite gained 112.81 points (1.6%) to 7,256.43, and the S&P 500 was up 32.57 points (1.2%) to 2,731.20 Thursday. DJIA futures were 20 points higher early Friday morning in active trading. Japan's Nikkei 225 is up 255.27 points (2.0%) while Hong Kong's Hang Seng and China's Shanghai Composite were closed for the Chinese New Year. European markets were also higher with London's FTSE 100 up 45.04 points (0.6%), Germany's DAX up 60.79 points (0.5%), and France's CAC 40 up 30.77 points (0.6%). The euro was 0.0025 lower at 1.2505 while the U.S. dollar index was up 0.09 at 88.71. March 30-year T-Bonds were 5/32 higher at 144'05 while April gold was up $5.70 to $1,361.00. Crude oil was $0.10 higher at $61.27 and Brent crude was up $0.12 at $64.45. Malaysian palm oil futures did not trade Friday and China's Dalian soybean futures were closed for China's New Year.

	BULL		BEAR
1)	Another day of dry weather in Argentina supports row crop prices.	1)	New-crop corn prices are within a few cents of $4.00, a likely sales target for some.
2)	This week's new two-month high in spot soybeans is holding up so far, in line with the uptrend in soybean meal.	2)	New-crop soybeans near their highest prices in a year should be enticing and coincide with anecdotal reports of increased farmer selling.
3)	The seven-day forecast remains mostly dry for the U.S. Southern Plains HRW growing area.	3)	The current rally in winter wheat prices is based on dry weather in the U.S., but the bulk of global production comes from elsewhere.

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MORE COMMODITY-SPECIFIC COMMENTS

CORN March corn is down a quarter-cent early Friday with just a 3/4 cent trading range overnight, keeping its usual low profile in February, but persistently staying near the upper end of its three-month range. USDA expects Argentina to be the world's third largest exporter of corn in 2017-18, but Argentina's crop seems likely to fall short of expectations after the Buenos Aires Grain Exchange said 58% of the corn crop was rated poor or very poor as of Wednesday. Argentina does have a chance for light showers on Sunday and early next week, but dry conditions remain a prominent concern and that is helping keep the trend in March corn pointed up.

SOYBEANS March soybeans are down a quarter-cent early, staying in a narrow 2 1/4 cent range overnight while outside commodity markets were mixed. This week's trading in soybeans has been all about Argentina and the persistence of dry weather at this critical time of year for row crops. There is a chance for light showers on Sunday into early next week, but it may be too little, too late as the Buenos Aires Grain Exchange said 56% of soybeans were rated poor or very poor as of Wednesday. March soybean meal remains the bullish leader in the soy complex, but this week's gains have also turned the trend higher in March soybeans as prices near their highest level in six months. Meanwhile, Brazil's big harvest makes progress and soybeans' higher prices are apt to encourage more U.S. planting in the spring.

WHEAT New-crop July Kansas City wheat is down 1 1/4 cents early, backing away from a 4-cent gain earlier in the night. It's not often we see wheat starting the day with a bigger trading range than corn or soybeans, but K.C. wheat especially, has attracted more trader attention this month, trading near its highest prices in six months while the seven-day forecast remains mostly dry for the western Plains. Four months without significant precipitation in the southwestern U.S. Plains has created a dangerous situation and the National Weather Service in Dodge City, Kansas is warning of fire danger on Sunday when winds are expected to pick up. The SRW wheat crop, on the other hand, is expecting moderate to heavy rains in the eastern Midwest the next seven days and is in much better shape. Fundamentally, there is plenty of wheat in the world, but the trend for U.S. winter wheat prices remains up, supported by dry winter weather concerns.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.37	$0.00	-$0.31	Mar	-$0.002
Soybeans:	$9.54	$0.06	-$0.70	Mar	-$0.006
SRW Wheat:	$4.33	$0.06	-$0.29	Mar	-$0.004
HRW Wheat:	$4.37	$0.09	-$0.41	Mar	$0.004
HRS Wheat:	$5.92	$0.08	-$0.16	Mar	-$0.003

Todd Hultmancan be reached at todd.hultman@dtn.com

Toddcan be followed throughout the day on Twitter @ToddHultman1

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