DTN Before The Bell Grain Comments

Morning CME Globex Update:

May contracts of corn and K.C. wheat were a little lower early Wednesday while May soybeans and Minneapolis wheat were a little higher. The Federal Reserve meets for a second day and is expected to raise the interest rate a quarter-percent with possible clues about future rates. At 8 a.m. CDT, USDA announced 5.4 million bushels (138,000 mt) of U.S. corn were sold to South Korea for 2017-18.

Other Markets:

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

Corn:

At 8 a.m. CDT, USDA announced 5.4 million bushels (138,000 mt) of U.S. corn were sold to South Korea for 2017-18. May corn was down a half-cent earlier Wednesday, staying near its lowest prices in a month with a heavy load of noncommercial traders caught on the long side of the market without a strong fundamental reason to be bullish. The most bullish factor in corn is Argentina, where row crop production will be down this year due to dry weather and the seven-day forecast remains mostly dry with a chance of rain northeastern Argentina. Otherwise, Brazil's second corn crop planting appears to be going well and USDA's Prospective Planting estimate on Mar. 29 is expected to show 88 to 90 million acres of corn for the U.S. this spring. So far, soil moisture looks mostly favorable around the Corn Belt, but the eastern Midwest may be too wet for early fieldwork with more rain anticipated the next seven days. Technically, weekly momentum has turned bearish in corn with noncommercial traders excessively long and under pressure to liquidate. DTN's National Corn Index closed at $3.37 Tuesday, the lowest close in three weeks and priced 37 cents below the May contract. In outside markets, the June U.S. dollar index is down 0.19 while most other commodities are off to a higher start. The Federal Reserve is expected to announce a quarter-percent rate hike at 1 p.m. CDT.

Soybeans:

May soybeans were up 3 1/2 cents early Wednesday with May soybean meal up $2.70, trying for a second day to whittle down Monday's big drop while the seven-day forecast for Argentina remains mostly dry. This has been a busy time for soybeans with Argentina's drought countering some of the bearishness of Brazil's big harvest, which is now roughly two-thirds finished. In the U.S., planting is still a month or more away, but early conditions look mostly favorable in the Midwest. Traders will be watching USDA's Grain Stocks and Prospective Planting reports closely on Mar. 29 with many expecting to see an estimate of 90 million or more soybean acres. Technically, the weekly stochastics have turned bearish for both, soybeans and meal, putting bullish noncommercial traders under pressure to liquidate. DTN's National Soybean Index closed at $9.50 Tuesday, near its lowest close in a month and priced 78 cents below the May contract.

Wheat:

May Chicago wheat was up a quarter-cent and May K.C. wheat was down a penny early as traders assess a seven-day forecast that has rain for the eastern sides of Kansas, Oklahoma, and Texas early next week while the western sides stay dry. Temperatures are also expected to rise in the southwestern Plains, reaching 90 in the Texas Panhandle by Friday. The SRW wheat crop is in for more rain with moderate to heavy amounts headed for the central and eastern Midwest. There hasn't been much talk yet about world wheat conditions, but late Tuesday, USDA said in its Weekly Weather and Crop Bulletin that Europe had "good to excellent prospects for greening winter crops." Fundamentally speaking, drought in the U.S. is the only bullish factor for wheat so far in 2018, but there is plenty of time for a surprise ahead. For now, the trend has turned down in May Chicago wheat while May K.C. wheat contends with support at $4.70. DTN's National SRW index closed at $4.21 Tuesday, near its lowest close in a month and 35 cents below the May contract.

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

Follow Todd on Twitter @ToddHultman1

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