Grains

Grain prices this morning are lower with Mar corn -2.25 (-0.62%), Mar soybeans -4.75 (-0.48%), Mar wheat -5.50 (-1.21%). Grains on Thursday settled mixed with Mar corn at a 6-month nearest-futures high: Mar corn +0.50 (+0.14%), Mar soybeans +4.75 (+0.48%), Mar wheat -4.25 (-0.92%). Corn prices rallied after the USDA in Thursday's WASDE report cut its U.S. 2017/18 corn ending stocks estimate to 2.352 bln bu, less than expectations of 2.467 bln bu, and cut its global 2017/18 corn ending stocks estimate to a 4-year low of 203.09 MMT less than expectations of 204.2 MMT. Soybeans closed higher after the USDA cut its global 2017/18 soybean ending stocks estimate to 98.1 MMT, below expectations of 98.3 MMT, although gains were limited after the USDA raised its U.S. 2017/18 soybean ending stocks estimate to an 11-year high of 530 mln bu, more than expectations of 488 mln bu. Mar wheat posted a 6-month nearest-futures high after the USDA cut its global 2017/18 wheat ending stocks estimate to 266.1 MMT, less than expectations of 267.6 MMT. Prices fell back and closed lower, however, after the USDA unexpectedly raised its U.S. 2017/18 wheat ending stocks estimate to 1.009 bln bu, more than expectations of a cut to 988 mln bu. Data from the U.S. Drought Monitor show 44.1% of the area was experiencing moderate drought as of Feb 6, up from 13.6% three months ago. Another negative for soybeans was the action by researcher AgRural to raise their 2017/18 Brazil soybean crop estimate to a record 116.2 MMT from a Jan estimate of 114 MMT. A negative for wheat is increased wheat exports from Russia, the world's biggest wheat exporter, which may further erode demand for U.S. wheat as Russia wheat exports from Jul 1-Jan 24 are up +35% y/y at 23.5 MMT. Strong Chinese soybean demand for U.S soybeans has been a major bullish factor for soybean prices as China 2017 soybean imports rose +13.9% y/y to a record 95.54 MMT and the China National Grain and Oils Information Center estimates China 2018 soybean imports will rise +5% y/y to a record 100 MMT.