Grains Receiving Mixed Signals Ahead of Shortened Trading Day
A mixed start is likely this am, steady wheat, down 2 in corn and up 2 in beans. Crude oil is down but the $ is weaker, sending mixed signals to the grains. Lately, the grains have traded somewhat independently of these outside markets and we could do so again today unless crude oil or the $ make a major move in either direction.
There isn't a lot of market moving news overnight but some things to be aware of: Argentine farmers blocked a rural highway to protest government policies. If these protests were to spread, they could disrupt Argentine grain marketing, which would be bullish for the US market. No widespread protests are expected for now but the situation bears watching as earlier this year Argentine farmers protests turned into a national strike that halted exports and boosted US grain prices.
Jan beans ended over $9.00 yesterday for the first time in over a month, a technically bullish signal for beans.
Chinese officials confirmed they will buy 20 million tonnes of corn from Chinese farmers on top of the 10 million tonnes they have already committed to buying. However, the officials made no mention of buying any more beans beyond the 3 million tonnes they have already said they will buy. There were rumors earlier in the week the government would buy more beans as well as corn and this helped drive bean prices sharply higher that day both here and on the Dalian, China grain futures market. The lack of any confirmation of more bean buying by the government could put some pressure on beans today, especially after they confirmed more corn buying.
Russia's Agricuture Minister said Russia will harvest over 108 million tonnes of grain this year vs a previous estimate of 105.5 million tonnes. Last year Russia only harvested 81.8 million tonnes. They also banned wheat exports earlier this year to conserve supplies but now they have plenty of wheat to export. What a difference a few months makes!
Speaking of what a difference a few months makes, the CRB index of 19 commodities hit an all time high of 474 in July, only to fall to a 6 1/2 year low of 208 by early this month! Similarly, open interest in corn soared to 1.4 million contracts earlier this year as index funds kept buying. Only to fall to around 800,000 contracts now as index funds have liquidated much of their long positions.
Argentine was dry yesterday and will stay this way the next few days with temps above normal. Some light, scattered weekend rain is forecast but dry weather is likely again Monday, stressing corn and beans. Brazil saw light rain in the south the last 24 hours, including Rio Grande, where it is most needed. More rain is possible in the Rio Grande today and in Parana tomorrow and Friday. Up to .6" is forecast in Rio Grande and up to 1.5" is likely in Parana while the north, Mato Grasso, remains dry.
Look for a two-sided, dull trade with light volume today and remember we end at Noon US Central time.
There isn't a lot of market moving news overnight but some things to be aware of: Argentine farmers blocked a rural highway to protest government policies. If these protests were to spread, they could disrupt Argentine grain marketing, which would be bullish for the US market. No widespread protests are expected for now but the situation bears watching as earlier this year Argentine farmers protests turned into a national strike that halted exports and boosted US grain prices.
Jan beans ended over $9.00 yesterday for the first time in over a month, a technically bullish signal for beans.
Chinese officials confirmed they will buy 20 million tonnes of corn from Chinese farmers on top of the 10 million tonnes they have already committed to buying. However, the officials made no mention of buying any more beans beyond the 3 million tonnes they have already said they will buy. There were rumors earlier in the week the government would buy more beans as well as corn and this helped drive bean prices sharply higher that day both here and on the Dalian, China grain futures market. The lack of any confirmation of more bean buying by the government could put some pressure on beans today, especially after they confirmed more corn buying.
Russia's Agricuture Minister said Russia will harvest over 108 million tonnes of grain this year vs a previous estimate of 105.5 million tonnes. Last year Russia only harvested 81.8 million tonnes. They also banned wheat exports earlier this year to conserve supplies but now they have plenty of wheat to export. What a difference a few months makes!
Speaking of what a difference a few months makes, the CRB index of 19 commodities hit an all time high of 474 in July, only to fall to a 6 1/2 year low of 208 by early this month! Similarly, open interest in corn soared to 1.4 million contracts earlier this year as index funds kept buying. Only to fall to around 800,000 contracts now as index funds have liquidated much of their long positions.
Argentine was dry yesterday and will stay this way the next few days with temps above normal. Some light, scattered weekend rain is forecast but dry weather is likely again Monday, stressing corn and beans. Brazil saw light rain in the south the last 24 hours, including Rio Grande, where it is most needed. More rain is possible in the Rio Grande today and in Parana tomorrow and Friday. Up to .6" is forecast in Rio Grande and up to 1.5" is likely in Parana while the north, Mato Grasso, remains dry.
Look for a two-sided, dull trade with light volume today and remember we end at Noon US Central time.
posted by InsightPublishing at
8:28 AM
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