DTN Before The Bell Grain Comments

Morning CME Globex Update:

It seems a bit harsh, but July K.C. wheat was down 13 3/4 cents early Thursday with a chance for light rain in Kansas in the extended forecast. USDA's weekly report of export sales was neutral-to-bearish for corn and soybeans, and bearish for wheat.

Other Markets:

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

Corn:

May corn was down 1 1/4 cents early Thursday, holding its sideways range while the central Corn Belt enjoys another day of warm temperatures, but not for long. A winter storm is expected to come from the northwestern Plains on Friday and bring snow to the northwestern Corn Belt and rain to the central and eastern Corn Belt. Soil temperatures are gradually warming in the eastern Corn Belt, but significant planting is still on hold, waiting for broadly warmer weather. U.S. corn exports have a chance to pick up in the second half of 2017-18 and early Thursday, USDA said last week's export sales and shipments of corn totaled, 33.1 and 75.3 million bushels respectively, a new marketing year high for shipments. Total corn shipments are now down 21% in 2017-18 from a year ago, a neutral-to-bearish pace, showing gradual improvement with less than five months left in the season. The trend for old-crop corn remains sideways with plenty of supply in storage, but the trend for new-crop corn is up. DTN's National Corn Index closed at $3.53 Wednesday, 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 up 0.25 and most commodities are lower.

Soybeans:

May soybeans were up 2 1/4 cents Thursday with help from light commercial buying and ongoing support from tight supplies in South America. Trade tensions with China remain an ongoing concern, but for the most part, soybean prices have recovered from the initial shock of China's proposed tariff announcement and are back to focusing on basics. In particular, Brazil's FOB soybean price trading at its highest level since the summer of 2016 is a strong sign of demand from China that is outweighing Tuesday's news from USDA that Brazil will harvest another record soybean crop. Brazil's situation also means traders will be watching USDA's weekly export sales numbers a little closer. Early Thursday, USDA said last week's export sales and shipments of U.S. soybeans totaled 55.5 and 15.4 million bushels respectively, a neutral-to-bearish showing for the week with total shipments now down 13% from a year ago. Thanks to China's strong demand and Argentina's drought in early 2018, the fundamental outlook for soybean prices is bullish outside the U.S. and neutral within the U.S. Technically, the trend in May soybeans is sideways and the trend in November soybeans is up. DTN's National Soybean Index closed at $9.77 Wednesday, near its highest prices in over a year and priced 71 cents below the May contract.

Wheat:

May Chicago wheat was down 10 1/2 cents and May K.C. wheat was down 13 3/4 cents early Thursday, falling back from one-month highs with a chance for light rain in the extended forecast for Kansas. The double-digit price drop could be deemed a little harsh for such a light rain forecast, but we also have to take into account the world's other wheat regions and so far, no significant threats are being reported. Thursday's U.S. Drought Monitor showed a larger area of exceptional drought around the Texas and Oklahoma Panhandles. Expectations remain low for 2017-18 U.S. wheat exports and Thursday's weekly report did nothing to change that. USDA said last week's export sales and shipments of wheat totaled 4.4 and 16.0 million bushels respectively, another bearish combination for the week. Total wheat shipments are now down 10% from a year ago. May Minneapolis wheat was down 1 1/2 cents early with this weekend's winter storm offering no hope for planting anytime soon. For now, the trends in all three wheats are sideways. DTN's National SRW index closed at $4.55 Wednesday, 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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