Higher Crude, Lower Dollar Look Bullish for Grains
A higher start is expected in all pits this morning, roughly 3-4 in wheat and corn, 10-15 beans, following overnight gains. Crude oil is higher, as are equity markets, while the $ index is lower, a bullish combination for the grains and most likely the main reason they were higher overnight.
Deliveries this morning were 300 wheat, 1200 corn and 1600 oil, all to March 9. There no bean or meal deliveries again this morning. The lack of bean deliveries so far this month, coupled with tight farmer holding, strength in the bean cash market and ongoing Chinese buying supported the nearby’s, especially March, on a spread basis yesterday and could do so again today.
Talks between the Argentine government and the 4 main farmers unions are scheduled to resume this week, perhaps as soon as today. The outcome of these talks could impact the market, especially beans, so traders will follow them closely.
Evening up and positioning is likely today ahead of the USDA supply/demand report tomorrow morning. Traders are looking for ending wheat stocks of 658 million bushels, 1.806 billion bushels of corn and 198 million bushels of beans. The Commodity Futures Trading Commission said they were going to set up a committee to study the lack of convergence in the grain markets. This has been a big problem in wheat for some time now. Convergence is the coming together of cash and futures prices as a contract expires. Keep watching the outside markets for direction today.
More welcome rain is forecast in the Chinese winter wheat belt the second half of this week. Argentina was dry the last 24 hours and more of the same is forecast the rest of this week. More rain would still be welcome despite good rains a few days ago. Brazil saw up to 1.5" of bean harvest delaying rain in the north the last 24 hours. More unwelcome rain in the north is forecast the next several days, with further harvest delays likely. Scattered, still welcome rain is likely in the southern part of the country the next few days.
The southwest US winter wheat belt saw up to .6" of beneficial rain overnight. About .3” to 1.5" more is forecast today through Thursday. Additional rain is likely later in the week, including the driest part of the belt, the west. The 6-10 day calls for above normal rain in the southeast, below normal in the northwest. --Vic Lespinasse
Deliveries this morning were 300 wheat, 1200 corn and 1600 oil, all to March 9. There no bean or meal deliveries again this morning. The lack of bean deliveries so far this month, coupled with tight farmer holding, strength in the bean cash market and ongoing Chinese buying supported the nearby’s, especially March, on a spread basis yesterday and could do so again today.
Talks between the Argentine government and the 4 main farmers unions are scheduled to resume this week, perhaps as soon as today. The outcome of these talks could impact the market, especially beans, so traders will follow them closely.
Evening up and positioning is likely today ahead of the USDA supply/demand report tomorrow morning. Traders are looking for ending wheat stocks of 658 million bushels, 1.806 billion bushels of corn and 198 million bushels of beans. The Commodity Futures Trading Commission said they were going to set up a committee to study the lack of convergence in the grain markets. This has been a big problem in wheat for some time now. Convergence is the coming together of cash and futures prices as a contract expires. Keep watching the outside markets for direction today.
More welcome rain is forecast in the Chinese winter wheat belt the second half of this week. Argentina was dry the last 24 hours and more of the same is forecast the rest of this week. More rain would still be welcome despite good rains a few days ago. Brazil saw up to 1.5" of bean harvest delaying rain in the north the last 24 hours. More unwelcome rain in the north is forecast the next several days, with further harvest delays likely. Scattered, still welcome rain is likely in the southern part of the country the next few days.
The southwest US winter wheat belt saw up to .6" of beneficial rain overnight. About .3” to 1.5" more is forecast today through Thursday. Additional rain is likely later in the week, including the driest part of the belt, the west. The 6-10 day calls for above normal rain in the southeast, below normal in the northwest. --Vic Lespinasse
posted by InsightPublishing at
8:24 AM
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