DTN Before The Bell Grain Comments

Morning CME Globex Update:

May soybeans were up 7 1/2 cents early Wednesday, still benefiting from USDA's lower-than-expected ending stocks estimate and Tuesday's encouraging words from China's President regarding trade. At 8 a.m. CDT, USDA announced 5.2 million bushels (141,518 mt) of U.S. soybeans were sold to Mexico and 4.4 million bushels (120,000 mt) to Argentina, both for 2018-19.

Other Markets:

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

Corn:

May corn was up a quarter-cent early Wednesday in a narrow overnight range, still not showing much influence either direction from Tuesday's USDA estimates. USDA's new U.S. ending corn stocks estimate of 2.182 billion bushels was up 55 million bushels from the March estimate, but world corn stocks showed a slight reduction to 197.8 mmt (7.79 bb). In May, the market will be more concerned about USDA's new-crop estimates and we already have concerns about corn planting in early 2018. The central Corn Belt will enjoy warmer temperatures into Friday, only to be followed by another winter storm that is expected to come from the northwestern U.S. Plains on Friday and move across the northern and central Midwest through the weekend. With plenty of old-crop corn supplies still available, the trend in May corn is sideways, while December corn remains in an uptrend, challenging its highest prices in eight months. DTN's National Corn Index closed at $3.55 Tuesday, near its highest prices since June 2016 and priced 34 cents below the May contract. In outside markets, the June U.S. dollar index is down 0.12 after the U.S. Labor Department reported consumer prices up 2.4% in March from a year ago, slightly less than expected. Most non-ag commodities are starting higher.

Soybeans:

At 8 a.m. CDT, USDA announced 5.2 million bushels (141,518 mt) of U.S. soybeans were sold to Mexico and 4.4 million bushels (120,000 mt) to Argentina, both for 2018-19. It was Argentina's second purchase this week.
May soybeans were up 7 1/2 cents earlier Wednesday, still finding benefit from USDA's lower-than-expected ending stocks estimate of 550 million bushels for the U.S. in 2017-18. May soybean meal is also starting higher, up $2.90 with early evidence of commercial buying after prices sold lower following Tuesday's report. The roughly unchanged ending stocks estimate was a small bullish surprise, coming after a bearish Grain Stocks report on Mar. 29 and may still be increased in May as soybean use was down 6% in the first half of 2017-18. Outside of sluggish demand in the U.S. however, Brazil is experiencing a bull market at harvest time with Wednesday morning's FOB soybean price at $11.87, its highest since July 2016 and 44 cents a bushel above the FOB price in New Orleans. At the same time USDA predicted a new record soybean crop for Brazil, it also cut Brazil's estimate of ending soybean stocks from a lean 49 million bushels (mb) to an even leaner 27 mb for 2017-18. May soybeans are trading near the upper end of their sideways range while the trend remains up in November soybeans. DTN's National Soybean Index closed at $9.80 Tuesday, back near its highest prices in over a year and priced 70 cents below the May contract.

Wheat:

May Chicago wheat was down 4 1/4 cents and May K.C. wheat was down 7 cents early Wednesday, both encountering modest commercial selling after prices neared their highest level in a month. Tuesday's new estimates from USDA were officially bearish for wheat as U.S. ending stocks were increased 30 million bushels and world ending stocks were increased to a new record high 271.22 mmt (9.97 bb). In more practical terms however, USDA's numbers were still focused on old-crop wheat while the market is more interested in what might be happening to new-crop wheat. The seven-day forecast currently has three items which are all potentially hostile to new-crop U.S. wheat production: more dry weather in the southwestern Plains, a winter storm this weekend across the northern Plains, and more rain expected in the Delta and southeastern Midwest. Beyond the seven-day outlook, below average temperatures are expected to be an ongoing problem for spring wheat planting and Sep Minneapolis wheat is up 2 cents early Wednesday. For now, the trends are sideways for all three wheats. DTN's National SRW index closed at $4.60 Tuesday, near its highest prices in eight months and 32 cents below the May contract.

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

FollowTodd on Twitter @ToddHultman1

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