DTN Before The Bell Grain Comments

Morning CME Globex Update:

May contracts of corn, soybeans, and all three wheats were a little lower early Wednesday, as traders show caution ahead of Thursday's WASDE report, due out at 11 a.m. CST. Meanwhile, the seven-day forecasts remain mostly dry for Argentina and the southwestern U.S. Plains.

Other Markets:

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

Corn:

May corn was down a half-cent early Wednesday, still holding a small gain for the week ahead of USDA's next WASDE report, due out Thursday at 11 a.m. CST. There is a chance USDA will revise its estimate of corn exports lower, but otherwise U.S. numbers shouldn't change much. More attention will be on USDA's corn crop estimates for Brazil and Argentina, which Dow Jones' survey expects at 91.8 mmt (3.6 bb) and 36.3 mmt (1.4 bb) respectively, both lower than February's estimates. Brazil's second corn crop is currently being planted and Argentina's corn still has a way to go, but lacks moisture and the seven-day forecast remains mostly dry for Argentina. Argentina's unexpected drought has been a bullish surprise in early 2018 and is giving U.S. producers hope for a higher price this spring. U.S. corn supplies remain a bearish concern, but so far, the trend remains up in May corn. DTN's National Corn Index closed at $3.52 Tuesday, priced 36 cents below the May contract and at its highest price in seven months. There were 67 delivery intentions for March corn early Wednesday. In outside markets, Dow Jones futures are down 252 points after Gary Cohn, President Trump's economic advisor, announced he was stepping down, unable to support the new tariffs on steel and aluminum, reported several news sources. Also, the March U.S. dollar index is down 0.06 after CNBC reported ADP payrolls up 235,000 in February, more than was expected.

Soybeans:

May soybeans were down 3 3/4 cents early with traders showing caution ahead of Thursday's WASDE report. While Dow Jones' survey of analysts expects USDA's estimate of Argentina's soybean crop to drop from 54.0 to 48.1 mmt (1.8 bb), the same survey also expects USDA's estimate of Brazil's soybean crop to increase from 112.0 to 114.0 mmt (4.2 bb), close to last year's record 114.1 mmt. The other bearish concern on Thursday is that U.S. soybean shipments are running 13% below a year ago and there is more room for another cut in USDA's export estimate, or USDA may wait until after the Mar. 1 Grain Stocks report is released on Mar. 29. Wednesday's satellite map is dry again over southern Brazil and Argentina while central Brazil has a chance for rain -- a familiar pattern we have seen a lot in 2018. Here in the U.S., drought in the western U.S. Plains will likely remain a concern at planting time, but if the central and eastern Midwest get rain, we have seen that the soybean crop can still do well. Fundamentally, there are plenty of bearish concerns for soybean prices, but so far, the trends remain up in May soybeans and meal. DTN's National Soybean Index closed at $9.96 Tuesday, near its highest price in over a year and priced 79 cents below the May contract. Early Wednesday, there were no delivery intentions for March contracts of soybeans, 135 for meal, and 35 for bean oil.

Wheat:

May Chicago wheat was down 2 cents and May K.C. wheat was down a penny early Wednesday, having survived a windy and dangerous start to the week in the southwestern U.S. Plains. The winds have moved eastward, leaving the southwestern Plains with warmer temperatures and calmer conditions the rest of this week. The risk of wildfires has eased, but there is still no significant precipitation in either the region's seven-day or extended forecast and that remains a concern for this year's U.S. winter wheat crops. In the big picture, the U.S. winter wheat crop accounted for less than 5% of last year's global production, and so the market remains fundamentally bearish. However, the dynamic here in the U.S. is that K.C. wheat still has plenty of traders short in a market that shows no rain in the forecast. For now, the trends in winter wheat contracts remain up. DTN's National SRW index closed at $4.71 Tuesday, near its highest price in seven months and priced 36 cents below the May contract. Early Wednesday, there were 7 delivery intentions for K.C. wheat.

Todd Hultman can be reachedat todd.hultman@dtn.com

FollowTodd on Twitter @ToddHultman1

(KR)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.