Mixed Signals Drive Today's Start in Grains
A mixed start is expected this morning. Crude oil and the equity markets are lower but so is the $, presenting mixed signals to the grain market this morning.
Iraq bought 150,000 tonnes of wheat this morning: 100,000 tonnes from Australia and the rest from Russia. They bought nothing from the US. Egypt is in the market for wheat also this morning. The roughly $25 per tonne premium in US wheat compared with Black Sea origin makes it unlikely Egypt will buy any US wheat. There is widespread talk China bought 2-3 cargoes (110-165,000 tonnes) of US beans so far this week, either out of the Gulf or the Pacific northwest.
Talks between the Argentine government and farmers went nowhere yesterday, as many feared. Farmers are now going to demonstrate in Buenos Aires tomorrow, taking their protest over the very high 35% bean export tax to Argentina's Congress. More roadside protests are also planned. Tellingly, for the first time since talks between the two sides started a few weeks ago, there are no new talks scheduled for next week. This suggests tension is growing between the two groups. This is friendly for US bean export prospects and helped our nearby bean market end a little higher overnight despite slightly lower overnight trading in wheat and corn. The longer this conflict goes on, especially if Argentine farmers go back on strike, the more supportive it is for US bean prices, both outright and on a spread basis against the deferred months.
As of March 1, India reported their wheat stocks were 15.3 million tonnes vs just 6.5 million tonnes a year ago. With a big harvest coming in starting next month, Indian wheat stocks are sure to grow, increasing the likelihood the government will want to export wheat. The problem is that it will take a subsidy to make Indian wheat exports competitive, something the government hasn't wanted to do in the past. Technically, the charts look friendly for wheat, corn and beans with modest up-trends in place.
The Federal Reserve will announce any new policy moves at 1:15pm US Central time today. This could impact the financial markets, which would then influence the grain markets tonight or tomorrow.
Argentina will remain dry the next several days but light rain is forecast early next week. Brazil will see more harvest delaying rain in the north the next several days. Rain is forecast in China's winter wheat belt starting this weekend, where it is welcome.
The southwest US winter wheat belt will see only very light, scattered rain the rest of this week. The 6-10 day calls for wet weather in the east but still predicts below normal rain in the dry western part of the belt, which will increase the need for much more moisture there soon.-- Vic Lespinasse
Iraq bought 150,000 tonnes of wheat this morning: 100,000 tonnes from Australia and the rest from Russia. They bought nothing from the US. Egypt is in the market for wheat also this morning. The roughly $25 per tonne premium in US wheat compared with Black Sea origin makes it unlikely Egypt will buy any US wheat. There is widespread talk China bought 2-3 cargoes (110-165,000 tonnes) of US beans so far this week, either out of the Gulf or the Pacific northwest.
Talks between the Argentine government and farmers went nowhere yesterday, as many feared. Farmers are now going to demonstrate in Buenos Aires tomorrow, taking their protest over the very high 35% bean export tax to Argentina's Congress. More roadside protests are also planned. Tellingly, for the first time since talks between the two sides started a few weeks ago, there are no new talks scheduled for next week. This suggests tension is growing between the two groups. This is friendly for US bean export prospects and helped our nearby bean market end a little higher overnight despite slightly lower overnight trading in wheat and corn. The longer this conflict goes on, especially if Argentine farmers go back on strike, the more supportive it is for US bean prices, both outright and on a spread basis against the deferred months.
As of March 1, India reported their wheat stocks were 15.3 million tonnes vs just 6.5 million tonnes a year ago. With a big harvest coming in starting next month, Indian wheat stocks are sure to grow, increasing the likelihood the government will want to export wheat. The problem is that it will take a subsidy to make Indian wheat exports competitive, something the government hasn't wanted to do in the past. Technically, the charts look friendly for wheat, corn and beans with modest up-trends in place.
The Federal Reserve will announce any new policy moves at 1:15pm US Central time today. This could impact the financial markets, which would then influence the grain markets tonight or tomorrow.
Argentina will remain dry the next several days but light rain is forecast early next week. Brazil will see more harvest delaying rain in the north the next several days. Rain is forecast in China's winter wheat belt starting this weekend, where it is welcome.
The southwest US winter wheat belt will see only very light, scattered rain the rest of this week. The 6-10 day calls for wet weather in the east but still predicts below normal rain in the dry western part of the belt, which will increase the need for much more moisture there soon.-- Vic Lespinasse
posted by InsightPublishing at
8:44 AM
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