Bullish Outside Markets; Bearish Weather Bring Volatility to Grains Today
A higher start is expected in all pits, about 10 in wheat, 3-5 corn and 10-12 in beans. Dalian, China grain futures were mixed but crude oil is much higher and the U.S. Dollar is solidly lower, a bullish combination for the grains. Gold is sharply higher again this am, which could also lend support to the grains.
Weekly export sales were good for wheat, a net of 632,000 tonnes between the old and new crop years. Soybean meal was also good, a total of 131,000 tonnes between the two crop years. Soybean Oil was good, 10,500 tonnes, while beans were in line, 411,000 tonnes. Corn was slow, just 304,000 net between the two crop years.
Argentina announced they are closing their corn export registry, which will shut off corn exports from this country, to "safeguard domestic supplies." If this export ban lasts for a week or more, which is likely, it will boost US corn export prospects, which is friendly for our corn market. China's agriculture minister said China will have another record grain harvest in 2008, the 5th year in a row for higher output.
Favorable monsoon rains are expected to continue in India, boosting crop prospects there. Rain is possible in western and northern Argentine wheat areas tonight into tomorrow but more widespread rain is needed to offset the ongoing dry weather pattern that is stressing the crop there. Early next week rain is expected in New South Wales, Australia's second largest wheat state, but only very light rain is forecast elsewhere in Australia's wheat belt the next 7 days, increasing drought stress on the crop.
The U.S. Midwest has no freeze threat the next week or longer as warm temps are to prevail, allowing corn and beans to continue late season development. The Midwest was dry the last 24 hours and will stay this way today through about Monday. The 6-10 day calls for warm temps with above normal rain in the west and below normal in the east. Good harvest weather is forecast to continue in the delta the next week or so, allowing bean harvesting to pick up.
The CME Group is letting AIG get out of long grain positions through block trading. Yesterday, 7260 contracts of wheat, 13,741 corn, 6325 beans and 4235 oil have been block traded, presumably all for AIG. I don't think this is having much impact, if any, on prices as they are in effect just transferring positions from AIG to other firms, not selling the contracts into the market.
The outside markets are bullish but the weather is bearish, at least for corn and beans, which could cause some volatile trading today. ---Vic Lespinasse
Weekly export sales were good for wheat, a net of 632,000 tonnes between the old and new crop years. Soybean meal was also good, a total of 131,000 tonnes between the two crop years. Soybean Oil was good, 10,500 tonnes, while beans were in line, 411,000 tonnes. Corn was slow, just 304,000 net between the two crop years.
Argentina announced they are closing their corn export registry, which will shut off corn exports from this country, to "safeguard domestic supplies." If this export ban lasts for a week or more, which is likely, it will boost US corn export prospects, which is friendly for our corn market. China's agriculture minister said China will have another record grain harvest in 2008, the 5th year in a row for higher output.
Favorable monsoon rains are expected to continue in India, boosting crop prospects there. Rain is possible in western and northern Argentine wheat areas tonight into tomorrow but more widespread rain is needed to offset the ongoing dry weather pattern that is stressing the crop there. Early next week rain is expected in New South Wales, Australia's second largest wheat state, but only very light rain is forecast elsewhere in Australia's wheat belt the next 7 days, increasing drought stress on the crop.
The U.S. Midwest has no freeze threat the next week or longer as warm temps are to prevail, allowing corn and beans to continue late season development. The Midwest was dry the last 24 hours and will stay this way today through about Monday. The 6-10 day calls for warm temps with above normal rain in the west and below normal in the east. Good harvest weather is forecast to continue in the delta the next week or so, allowing bean harvesting to pick up.
The CME Group is letting AIG get out of long grain positions through block trading. Yesterday, 7260 contracts of wheat, 13,741 corn, 6325 beans and 4235 oil have been block traded, presumably all for AIG. I don't think this is having much impact, if any, on prices as they are in effect just transferring positions from AIG to other firms, not selling the contracts into the market.
The outside markets are bullish but the weather is bearish, at least for corn and beans, which could cause some volatile trading today. ---Vic Lespinasse
posted by InsightPublishing at
8:50 AM
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