DTN Closing Grain Comments

General Comments:

Corn was down 7 3/4 cents in the May contract and down 6 1/4 cents in the December. Soybeans were down 27 cents in the May contract and down 18 1/4 cents in the November. Wheat closed down 17 cents in the May Chicago contract, down 29 1/4 cents in the May Kansas City, and down 15 1/4 cents in the May Minneapolis contract. The March U.S. dollar index is down 0.24 at 89.97. April gold is up $5.30 at $1,317.60 while May silver is up 5 cents and May copper is down $0.0275. The Dow Jones Industrial Average is down 371 points at 24,575. May crude oil is down $0.11 at $62.30. May heating oil is up $0.0059 while May RBOB gasoline is down $0.0072 and May natural gas is down $0.038.

Corn:

May corn fell 7 3/4 cents Monday to $3.75, the lowest close in three weeks with bearish influence from both winter wheat and soybeans. Part of northern Buenos Aires and southern Uruguay received rain over the weekend, but the main crop areas of Argentina remain dry with a mostly dry forecast expected again this week. The weekend's rain won't offer much help to drought-stricken crops in Argentina, but Brazil's corn crop should be off to a good start and soil moisture conditions in the U.S. Corn Belt are mostly favorable as spring planting nears. Much of corn's bearish risk is coming from speculators that have turned heavily long for tenuous reasons. Friday's CFTC data showed noncommercial traders holding their largest net-long position in corn since June 2011 -- 415,450 contracts as of Mar. 13. U.S. corn exports remain in question and, Monday morning, USDA said 55.5 million bushels of corn were inspected for export last week, putting the new total for 2017-18 down 28% from a year ago. USDA added news earlier that 4.5 million bushels (115,000 mt) of U.S corn were sold to unknown destinations for 2017-18 and 8.1 million bushels (206,000 mt) of U.S. corn were sold to Japan for 2018-19. So far, the trend in May corn remains up, but the weekly stochastic has turned down, signifying a bearish change in momentum. DTN's National Corn Index closed at $3.45 Friday, priced 38 cents below the May contract and falling back from its July high. In outside markets, the Dow Jones Industrial average is trading lower, down 379 points, and along with most commodities as investors broadly sought to raise cash on Monday.

Soybeans:

May soybeans dropped 27 cents Monday, falling to $10.22 1/2, its lowest close in a month as bearish concerns mount ahead of USDA's Grain Stocks and Prospective Plantings reports on Mar. 29. Argentina received some rain over the weekend in northern Buenos Aires, but crops remain stressed overall. Meanwhile, Dow Jones reported Friday that private consultant AgRural estimated Brazil's soybean harvest at 58% complete, close to its usual pace, while some are expecting a record crop in 2018. Here in the U.S., many are anticipating a soybean planting of 90.0 million acres or more and so far, soil moisture is mostly favorable across the Midwest. Like corn, soybeans' bearish risk is coming from excessive optimism among speculators. Friday's CFTC data showed noncommercial traders increased net longs in soybeans from 194,877 to 201,382, the largest net-long position since July 2016. Fundamentally, soybean prices have plenty of bearish concerns in 2018, including trade tensions with China. Technically, changes in trend can be volatile, but the weekly stochastics in soybeans and meal have both turned bearish. DTN's National Soybean Index closed at $9.71 Friday, down from its highest price in over a year and priced 78 cents below the May contract.

Wheat:

May Chicago wheat fell 17 cents and May K.C. wheat plummeted 29 1/4 cents to a new six-week low of $4.70 1/4, pressured by a mix of snow and rain over Kansas, rain in Missouri, and snow in the northwestern Plains. Monday's precipitation is not necessarily a drought-breaker and Texas and Oklahoma are expected to remain dry this week. However, it did catch noncommercial traders long and vulnerable in K.C. wheat. Friday's CFTC data showed noncommercials neutral toward Chicago wheat, holding just 1,628 net longs as of Mar. 13. In K.C. wheat, noncommercial traders increased net longs from 43,796 to 49,548 as of Mar. 13, just before May's prices fell 50 cents to Monday's close. It seems fair to say that the U.S. winter wheat crop will be lower in early 2018, but Monday's sell-off did serious damage to wheat prices' upward momentum and turned the trend lower in both, Chicago and K.C. wheat. DTN's National SRW Index closed at $4.35 Friday, down from its highest price in seven months and 33 cents below the May contract.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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