DTN Before The Bell Grain Comments

Grains Mixed Early Wednesday

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

Grain prices were showing no strong influence early Wednesday as May soybeans were up a little, winter wheat was down a little, and May corn was stuck at Tuesday's close. Other commodities were starting mixed to higher.

Other Markets:

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

Corn:

May corn was steady early with just a 1 1/2 cent range overnight. Prices are still holding near their highest level in six months with support from another seven-day forecast that is mostly dry for Argentina, except for the northeastern part of the country. The central crop area does have a chance for rain this weekend, but much crop damage has already been done with the Buenos Aires Grain Exchange estimating a 34.0 mmt (1.3 bb) corn crop in Argentina. Here in the U.S., drought in the western U.S. Plains remains a close threat to this year's corn crop, but the primary regions seem to be in good shape so far. Plentiful U.S. corn supplies remain a bearish risk to corn prices and USDA's Prospective Plantings report is due out Mar. 29. For now, the trend remains up in May corn, in line with its seasonal tendency. DTN's National Corn Index closed at $3.54 Tuesday, priced 38 cents below the May contract and within a cent of its July high. There were no delivery intentions for March corn early Wednesday and open interest stood at 187 contracts with official expiration coming around noon CDT. In outside markets, the March U.S. dollar index is down 0.01, still lingering near its lowest prices in three years with plenty of uncertainty around issues of trade. The U.S. Labor Department said the core rate of producer prices was up 2.7% in February from a year ago.

Soybeans:

May soybeans were up 2 1/2 cents early Wednesday, making an early attempt to post a third higher close after last week's sell-off while the forecast remains on the dry side for Argentina and is mostly unthreatening to harvest progress in Brazil. May soybean meal is up $3.20, supported by early commercial buying. While exports have been disappointing for U.S. soybeans in 2017-18, crush demand has done well and the National Oilseed Processors Association will have its estimate for February on Thursday morning. February typically has a lower crush total and 145 million bushels is a reasonable guess this time around. Soybeans prices may be at a critical juncture after last week's sell-off as traders get accustomed to the notion that Argentina's crop will be smaller in 2017-18 and starting thinking about the Prospective Plantings report on Mar. 29. For now, the trends remain up in May soybeans and meal, but upward momentum has taken a hit. DTN's National Soybean Index closed at $9.69 Tuesday, down from its highest price in over a year and priced 80 cents below the May contract. Early Wednesday, there were no delivery intentions for March contracts of soybeans or meal, but 22 for bean oil.

Wheat:

May Chicago wheat was down 1 3/4 cents and May K.C. wheat was down 2 cents early Wednesday, continuing a slow downward slide from their highs of Mar. 2 as prices continue to show less influence from drought in the southwestern U.S. Plains. The drought itself, remains serious with no significant precipitation expected this week for the areas of extreme drought. At the same time, a band of moderate precipitation is expected to help winter wheat conditions from Nebraska and South Dakota to Missouri and southern Illinois. At some point in 2018, traders will wake up to international wheat conditions where the bulk of production lies and that is when we will see if this winter's rally can hold up. For now, the trends remain up in both, Chicago and K.C. wheat. DTN's National SRW index closed at $4.51 Tuesday, down from its highest price in seven months and 35 cents below the May contract. There were 3 delivery intentions for March Chicago wheat, 2 for March K.C. wheat, and 1 for March Minneapolis wheat on Wednesday, the final day of trading.

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

FollowTodd on Twitter @ToddHultman1

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Todd Hultman