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Global Markets Continued to Fall Overnight

The good news for grains continues to be the sharp selloff in the US dollar

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Global markets continued to fall overnight as risk in European banks sent shares lower abroad and pushed S&P futures sharply lower in the overnight. Grains were mixed with soybeans and wheat posting modest gains and corn putting on a fractional loss.

In corn, yesterday saw EIA ethanol output up 10,000 BPD to 969,000 BPD, but the bearish news was the growing levels of stocks. Weekly ethanol stocks ballooned to 22.96 MBLS, up 594,000 BLS to reach its highest level ever. The good news for corn was a big export deal announced Wednesday morning of 243,000 MT of US corn to Japan. The good news for grains continues to be the sharp selloff in the US dollar, which should help improve the US competitive position in global grain markets.

South America continues to be favorable and USDA confirmed what they expect to be a record large crop in soybeans with Argentina’s crop expected to be 58.5 MMT versus USDA’s forecast last month of 57.0 MMT.

Fresh cracks appeared in global markets on Thursday as investors sought the safety of Japanese yen, gold and top-rated bonds while dumping U.S. dollars on bets the Federal Reserve could be done raising interest rates. Even the absence of Tokyo for a holiday could not stop the dollar from hitting a 15-month low on the yen, and gold finally broke major chart resistance to reach its highest since May. Silver was also up sharply on the global weakness and fall in the US dollar.

WEEKLY EXPORT SALES (in thousand metric tons)

Actual Expected

Corn 365 800-1,100

Soybeans 601 300-600

Wheat 299 150-350

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