Inflationary Concerns Move Oil Higher, Dollar Lower, Bullish for Grains
The early call is around 15 higher for wheat, up 10 for corn and 30 stronger for beans. Crude oil and gold are sharply higher, reflecting inflationary expectations, while the equities markets are up also, all of which are bullish for the grains.
The Federal Reserve Bank is riding to the rescue of the beleaguered economy! Or so the world hopes! The Fed's announcement yesterday afternoon that they would buy $300 billion in long-term US treasury debt and $850 billion in mortgage securities triggered a massive reaction in the financial markets yesterday. The move marks the first large scale purchase of government debt since the early 1960's. The market's reaction is continuing this am, strongly influencing the grain market overnight with more of the same likely today. The $ index plunged 3% yesterday afternoon, its biggest one day drop in at least 25 years, and it is much lower again this am, which is very bullish for all the grains as it makes them much more competitive in the world market. Foreign countries can now buy a lot more US grain with their currency since their currency can buy a lot more $. This drove all our grain prices sharply higher overnight and the same reaction is expected this am.
Weekly export sales were expected between (000 omitted) 300-500 tonnes in wheat, 550-750 tonnes in corn, 500-700 tonnes in beans, 35-150 tonnes in meal and 5-15 tonnes in oil this am. Actual exports this am were slow, only 214,000 tonnes of wheat, 441,000 tonnes in corn, 143,000 tonnes in beans, 33,000 tonnes in meal and minus 8000 tonnes in oil. Bean sales were a marketing year low, the marketing year for beans starting Sep 1. Oil sales were minus due to cancellations. India announced they were cutting the 20% import tax on bean oil to 0%, making it the same as palm oil, which is supportive for bean oil as India is a major importer of vegetable oils. This morning the USDA announced that South Korea bought 110,000 tonnes of optional origin corn and 55,000 tonnes of US corn for this crop year, which started Sep 1, 2008.
No fresh news overnight on the situation in Argentina regarding the growing tension between the government and farmers over the 35% bean export tax.
More generally dry weather is forecast in Argentina the next several days while more harvest delaying rain is forecast in northern Brazil the next several days.
The US southwest will be mostly dry the next few days, followed by much needed rain of up to 1" in the eastern half of the belt Sun-Tue. The driest area, the western part of the belt, will only see light, scattered rain during this time. The 6-10 day calls for wet weather in the east but below normal rain in the west.-- Vic Lespinasse
The Federal Reserve Bank is riding to the rescue of the beleaguered economy! Or so the world hopes! The Fed's announcement yesterday afternoon that they would buy $300 billion in long-term US treasury debt and $850 billion in mortgage securities triggered a massive reaction in the financial markets yesterday. The move marks the first large scale purchase of government debt since the early 1960's. The market's reaction is continuing this am, strongly influencing the grain market overnight with more of the same likely today. The $ index plunged 3% yesterday afternoon, its biggest one day drop in at least 25 years, and it is much lower again this am, which is very bullish for all the grains as it makes them much more competitive in the world market. Foreign countries can now buy a lot more US grain with their currency since their currency can buy a lot more $. This drove all our grain prices sharply higher overnight and the same reaction is expected this am.
Weekly export sales were expected between (000 omitted) 300-500 tonnes in wheat, 550-750 tonnes in corn, 500-700 tonnes in beans, 35-150 tonnes in meal and 5-15 tonnes in oil this am. Actual exports this am were slow, only 214,000 tonnes of wheat, 441,000 tonnes in corn, 143,000 tonnes in beans, 33,000 tonnes in meal and minus 8000 tonnes in oil. Bean sales were a marketing year low, the marketing year for beans starting Sep 1. Oil sales were minus due to cancellations. India announced they were cutting the 20% import tax on bean oil to 0%, making it the same as palm oil, which is supportive for bean oil as India is a major importer of vegetable oils. This morning the USDA announced that South Korea bought 110,000 tonnes of optional origin corn and 55,000 tonnes of US corn for this crop year, which started Sep 1, 2008.
No fresh news overnight on the situation in Argentina regarding the growing tension between the government and farmers over the 35% bean export tax.
More generally dry weather is forecast in Argentina the next several days while more harvest delaying rain is forecast in northern Brazil the next several days.
The US southwest will be mostly dry the next few days, followed by much needed rain of up to 1" in the eastern half of the belt Sun-Tue. The driest area, the western part of the belt, will only see light, scattered rain during this time. The 6-10 day calls for wet weather in the east but below normal rain in the west.-- Vic Lespinasse
posted by InsightPublishing at
8:29 AM
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