DTN Before The Bell Grain Comments

Morning CME Globex Update:

As another winter storm, fitting for Friday the 13th, is starting to form in the northwestern U.S. Plains, corn prices are roughly steady and winter wheat prices are once again starting lower. May soybeans are modestly higher early help from commercial buying in soybeans and meal.

Other Markets:

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

Corn:

May corn was down a quarter-cent early Friday, staying roughly steady this week near the upper end of its trading range while planting remains largely on hold throughout most of the Corn Belt. Snow in the northwestern U.S. Plains is expected to develop into blizzard conditions later Friday from South Dakota to northwestern Kansas, creating serious risk for transportation and livestock. The winter storm will expand eastward through the weekend, bringing snow to the northwestern Corn Belt and rain to the central and eastern Corn Belt. Even after this weekend, planting progress is apt to remain slow across most the Corn Belt with temperatures expected to stay below average the next two weeks. Meanwhile, light to moderate showers in central Brazil are expected to keep the second corn crop in good condition. Fundamentally, Argentina's drought gives U.S. corn exports a chance to pick up in the second half of 2017-18, but it is difficult to say if exports can reach USDA's 2.225 billion bushel goal. Technically, the trend remains sideways for old-crop corn and up for new-crop corn. DTN's National Corn Index closed at $3.54 Thursday, 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 0.07 and other commodities are mostly higher.

Soybeans:

May soybeans were up 2 cents early Friday, within 20 cents of the March high and offering close to the highest cash prices in over a year. If we pause for perspective, we might think this would be a tempting scenario for U.S. producers to sell cash soybeans, especially with Brazil's record harvest coming to market, a new crop season about to begin (assuming temperatures warm up some day), and all the talk of possible tariffs. However, we also see Brazil's FOB soybean price near its highest level in over a year and noncommercials net long, anticipating a chance for higher prices after Argentina's drought hit row crops hard in early 2018. That bullish scenario has given traders hope for higher prices and so far, the sell side of the market has allowed it, especially in new-crop contracts where Argentina's drought has created the most bullish anticipation. Fundamentally, the outlook for soybean prices is bullish outside the U.S. and neutral within the U.S. Technically, the trend in old-crop soybeans is sideways while the trend remains up in new-crop months. DTN's National Soybean Index closed at $9.89 Thursday, near its highest prices in over a year and priced 72 cents below the May contract.

Wheat:

May Chicago wheat was down 6 1/2 cents and May K.C. wheat was down 7 1/2 cents early Friday, facing two days of high winds in the western Plains that will bring blizzard conditions as far south as northwestern Kansas, sub-freezing temperatures to the Texas Panhandle, and add to wildfire risk throughout the southwestern Plains. Granted those weather challenges don't sound like a recipe for lower wheat prices, but prices are staying near the middle of March's wide trading range and we have to keep in mind that there is a whole world of plentiful wheat supplies outside the U.S. In fact, the demand side of the market looks pathetic with HRW wheat exports down 12% from a year ago and the July K.C. wheat contract priced roughly 19 cents below the September -- a bearish sign of poor commercial interest. Futures spreads in spring wheat are not as bearish. This year's cold spring is preventing spring wheat planting anytime soon and helping keep Sep Minneapolis prices within striking distance of the March high of $6.47. For now, the trends remain sideways for all three wheats. DTN's National SRW index closed at $4.50 Thursday, down from its highest prices in eight months and 31 cents below the May contract.

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

FollowTodd on Twitter @ToddHultman1

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