DTN Closing Grain Comments

General Comments:

May corn closed down 3 1/2 cents per bushel and December corn was down 2 1/4 cents. May soybeans closed down 13 1/4 cents and November soybeans were down 11 1/2 cents. May K.C. wheat closed up 1 1/4 cents, May Chicago wheat was up 1/4 cent and May Minneapolis wheat was up 1/2 cent. The June U.S. dollar index is trading up 0.130 at 96.355. The Dow Jones Industrial Average is down 41.07 points at 25,616.66. April gold is down $5.00 at $1,310.00, May silver is down $0.14 at $15.29 and May copper is up $0.0095 at $2.8635. May crude oil is down $0.60 at $59.34, May heating oil is down $0.0127, May RBOB is down $0.0346 and May natural gas is down $0.029.

Corn:

May corn closed down 3 1/2 cents at $3.73 3/4 Wednesday, falling back again from its highs in March with influence from a sharp sell-off in soybean meal. Friday's Prospective Plantings and Grain Stocks reports are getting close and corn prices may get some support from expectations for a planting estimate of 91.2 million acres (ma), says Dow Jones' survey, down slightly from USDA's 92.0 ma estimate in February. Of course, actual planting will prove difficult this year due to early flooding and we have a long way to go before we know much about what 2019 will look like. The seven-day forecast expects moderate rain amounts across the central and Eastern Corn Belt with saturated soils presenting an ongoing concern throughout much of the Midwest. In South America, crop conditions remain favorable and their larger crops are a source of bearish concern in the months ahead. Fundamentally, the outlook for corn prices is neutral. Technically, the trend in cash corn is up with support from commercial net longs and plenty of uncertainty about the year ahead. DTN's National Corn Index closed at $3.50 Tuesday, 27 cents below the May contract and back near its highest price in nine months. In outside markets, the June U.S. dollar index is up 0.13 and nearly all commodities are lower, along with a small loss in the Dow Jones Industrials.

Soybeans:

May soybeans dropped 13 1/4 cents to $8.87 1/2 Wednesday, near its lowest prices in over four months as bearish pressures continue to mount without a trade agreement with China. The other bearish concern for U.S. soybeans in 2019 is the possibility of lower feed demand, related to African swine fever in China and the reduction of China's hog herd. To that point, May soybean meal fell $6.60 to $304.40, close to its lowest prices in nearly three years. In addition to the above concerns, Dow Jones' survey expects USDA to find 2.219 billion bushels of soybeans on hand as of March 1, a record high and, if true, it also means U.S. soybean demand in the first half of 2018-19 will have dropped to its lowest level in six years. Amid this bearish backdrop, U.S. negotiators meet in Beijing again, hoping to secure a deal with China. Fundamentally, soybean prices have several bearish concerns, starting with the anticipation of record-high ending stocks in 2018-19. Bearish concerns have been restrained by the uncertainty of trade talks, but patience may be wearing thin. Technically, the trend remains sideways for both, futures and cash prices. DTN's National Soybean Index closed at $8.13 Tuesday, 87 cents below the May contract and holding in a narrow, sideways range.

Wheat:

In spite of bigger drops in row crops and a commodity board that was mostly red, wheat contracts escaped Wednesday with slight gains. May K.C. wheat was up 1 1/4 cents at $4.44 1/2 on light trading volume. It is not so much that wheat prices were hiding out with a bullish story to tell, because they don't have one at this time. It is more a matter that wheat prices have already been punished for the anticipation of a billion bushels of ending U.S. wheat stocks and there is not much new about the situation the market hasn't already heard. Even so, USDA is likely to remind us Friday that U.S. wheat demand in 2018-19 is among the worst in recent history. According to Dow Jones' survey, 1.543 bb of March 1 wheat stocks are expected in Friday's report and if true, will point to the third worst three quarters of U.S. wheat demand in the past 12 years. Fundamentally speaking, this month's low should offer support, but it is difficult to be bullish winter wheat while U.S. wheat supplies are plentiful and HRW wheat exports remain sluggish. Technically, the trends in cash HRW and SRW wheat remain down, while the trend in cash HRS wheat is near the upper end of its sideways range. DTN's National HRW Index closed at $4.28 Tuesday, 15 cents under the May contract and up from its lowest prices in a year. DTN's National SRW Index closed at $4.44, also up from its lowest prices in a year.

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

Follow him on Twitter @ToddHultman

(CZ)

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