DTN Closing Grain Comments

General Comments:

Corn was unchanged in the May contract and up 1/4 cent in the December. Soybeans were down 6 cents in the May contract and down 5 cents in the November. Wheat closed down 5 1/4 cents in the May Chicago contract, down 4 1/4 cents in the May Kansas City and down 4 cents in the May Minneapolis contract.

The June U.S. dollar index is up 0.36 at 88.96. June gold is down $11.60 at $1,349.30 while May silver is down 14 cents and May copper is up $0.0280. The Dow Jones Industrial Average is up 88 points at 24,290. May crude oil is down $0.28 at $65.27. May heating oil is up $0.0068 while May RBOB gasoline is up $0.0010 and May natural gas is up $0.063.

Corn:

May corn ended unchanged at $3.74 Tuesday on light volume as traders seemed to be marking time ahead of Thursday's Grain Stocks and Prospective Planting reports from USDA. Most attention will likely go to corn acres first with Dow Jones' survey expecting USDA to estimate 89.3 million acres (ma), down a little from last year's 90.2 ma. March 1 corn stocks will likely set a new record high, thanks to 16.95 billion bushels (bb) of beginning supplies. Corn use is likely to fall short of last year's record high 8.32 bb as exports are down 26% from a year ago. In South America, crop conditions remain split with Argentina's forecast dry again this week while Brazil's second corn crop is getting adequate moisture. Fundamentally, the price outlook for corn remains bearish, but weather will again be the determining factor this summer and we can't rule out the possibility of a surprise in Thursday's reports. For now, the trend remains down in May corn. DTN's National Corn Index closed at $3.37 Monday, near its lowest close in a month and priced 37 cents below the May contract. In outside markets, the June U.S. dollar index is up 0.36, taking advantage of concerns about slow growth and low inflation in Europe. Outside of ag and metals, many other commodities are trading higher.

Soybeans:

May soybeans fell 6 cents to $10.19 1/2 on light volume Tuesday, their lowest close in over a month as the buy side of the market disappeared in the final hour of the session. With two important USDA reports due out Thursday, the Dow Jones survey of analysts expects USDA to estimate soybean plantings at 90.9 ma, a new record high if true. The modest increase is reasonable, but this report has a history of surprising analysts, myself included. March 1 U.S. soybean stocks are expected to total 2.04 bb. Whatever the actual number is, soybean stocks will almost certainly be a new record high as the season started with 4.72 bb of beginning supplies. Soybean use in the first half of 2017-18 is likely to stay below last year's record high of 2.78 bb as exports are running 12% below a year ago. As mentioned above, crop conditions remain split in South America with Brazil's forecast staying wet while Argentina remains dry. Thanks to Brazil's big soybean harvest, China should be well supplied, at least through the summer. As usual, U.S. weather will be the next determining factor for soybean prices, and so far, soil moisture is mostly favorable across the Midwest. Weekly momentum for soybean prices remains down for old-crop soybeans while the trend is still up for new-crop soybeans. DTN's National Soybean Index closed at $9.47 Monday, near its lowest close in a month and priced 78 cents below the May contract.

Wheat:

May Chicago wheat closed down 5 1/4 cents to its lowest close in two months. May Kansas City wheat was down 4 1/4 cents to $4.64, also its lowest close in two months, as more rain fell Tuesday from central Texas through Oklahoma and Missouri. The western edge of the southwestern Plains received only light, scattered amounts, but more than has been seen in weeks. The rain is not apt to rescue the western edge of the winter wheat crop, but it should have a beneficial effect in the more central parts of Kansas and Texas. Late Monday, the state NASS office in Kansas said 49% of winter wheat was rated poor or very poor, down from 55% the previous week. Winter wheat crops in Texas and Oklahoma had poor-to-very poor ratings of 63% and 54%, respectively. Even though the U.S. winter wheat crop will likely be lower in 2018, it is difficult to build a bullish cash for wheat prices without help from Europe, Ukraine, or Russia. For now, the trends remain down for all three wheats. DTN's National SRW index closed at $4.21 Monday, near its lowest in over a month and 34 cents below the May contract. DTN's HRW index closed at $4.26, near its lowest prices in over a month.

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

Follow Todd Hultman on Twitter @ToddHultman1

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