DTN Before The Bell Grain Comments

Morning CME Globex Update:

A stronger U.S. dollar isn't bothering the grains and oilseed futures Wednesday morning after a month of steady gains. Most outside commodity markets are higher at the start of the session.

Other Markets:

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

Corn:

It's the last day in a short month, a month in which corn prices have steadily climbed more than 10 cents, and the higher trend remains in place Wednesday morning with March corn trading above $3.70 per bushel. Potential changes or expansions to the Renewable Fuel Standards will continue to be discussed in Washington, D.C. this week, which leaves the long-term prospects for a major segment of U.S. corn demand up in the air, and this in turn could perhaps add some sudden volatility to corn futures prices later this week. The DTN National Corn Index, an average of cash bids around the country, was $3.42 Tuesday, showing that the national average basis level remains at 29 cents under the March futures contract. On first notice day, expiring March grain contracts are now subject to delivery, and the CBOT reports there were 25 March corn contracts issued and stopped so far.

Soybeans:

Soybean meal futures continue to be the leader of the soy complex, with bullish speculators driving prices 6 to 7 dollars higher Wednesday morning amid continued concerns about Argentina's ability to export supplies after this winter's dry weather. The soybean meal chart has rallied 17 percent through the month of February, and soybean futures themselves have followed with 5 percent monthly gains. Watch for volatility in local basis bids on the barge market during this episode of flooding on the Illinois River, the Ohio River, and other Mississippi tributaries. But for now, basis bids remained mostly stable Tuesday as a nationwide average, at 68 cents under the March futures contract, with the DTN National Soybean Index at $9.70. In the daily deliveries report, there were 101 March soybean contracts, 9 March soybean meal contracts, and 1,786 March soybean oil contracts issued and stopped. At 8 a.m., USDA reported 250,000 mt of soybeans were sold to unknown destinations for 2017-2018 delivery.

Wheat:

The U.S. Dollar Index is climbing higher this week amid expectations for interest rate rises, a factor which is traditionally bearish to wheat futures, but the bullish drought concerns still seem to be driving these markets, with all the winter wheat contracts 6 to 9 cents higher Wednesday morning. Given the past 7 days' precipitation, it's likely that this week's Drought Monitor will show some improvement in Missouri and other Soft Red Winter wheat growing areas, but not as much in Oklahoma and Texas Hard Red Winter wheat fields, where the drought has been more severe. Old crop Hard Red Winter wheat's cash bids averaged $4.49 Tuesday, or 40 cents under the March KC contract. The SRW Index was $4.37 or 26 cents under the March Chicago contract. Greater strength of demand is seen for Hard Red Spring wheat, with its cash index at $5.86 and average basis at 11 cents under the March Minneapolis contract. There were no deliveries of either March Minneapolis spring wheat contracts or March Chicago wheat contracts, but there were 134 issues and stops reported for expiring March KC wheat contracts.

Elaine Kub can be reachedatelaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

(KR)

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