Markets were generally lower overnight with grain, stocks and energy all starting the week on the downside of last week’s close.
Wheat fell for the 4th consecutive trade session as favorable weather and ample stocks keep prices on the defensive. Weather forecasts suggest showers this week that should help germination in Kansas, Oklahoma and Texas, and encourage producers who have been delaying seeding because of dry soils. Overnight, Jammie Penm, chief commodity analyst for the Australian Bureau of Agricultural and Resource Economics predicted that Australia’s wheat crop would come in below 24 MMT based on dry, hot weather that has gripped the country in the past month and hampered the late-season development of the wheat crop there. USDA has Australia pegged at 27 MMT of production in their latest report issued on Oct 9th. In Ukraine, the Ag Minister there pegged the 2015 corn crop at 22.9 MMT versus USDA’s outlook of 25.0 MMT.
In South America, planting pace has picked up as Brazil's 2015-16 soybean crop is 13 percent planted, above 10 percent at this time last year but behind the 18 percent historical average. So far the growing season in Brazil has been on the dry side but rains in the coming weeks should help improve soil moisture. Brazil, the world's No. 2 soy producer and top exporter, is expected to plant a record soybean crop of more than 100 MMT, according to the government's crop supply agency Conab.
S&P stock futures (ESZ5) slipped overnight with energy stocks helping to drive the small decline, as crude oil dropped after China’s latest GDP data and fresh fears about oversupply. Asian markets closed narrowly mixed in the wake of the reading on China’s gross domestic product. Growth in the world’s No. 2 economy slowed to 6.9 percent in the third quarter, below Beijing’s 7 percent target for the first time since 2009, but above forecasts for 6.8 percent.
Oil (GCLX5 / QMX5) was off as well on the news from China. Along with slowing growth in China, data also showed that Chinese oil demand fell slightly in September, meaning the country’s year-to-date growth is running behind the International Energy Agency’s forecast. In other news, Saudi Arabia, the world’s biggest crude exporter, shipped 278,000 barrels a day less crude oil in August, trade data showed, suggesting demand for Saudi oil is sliding as the global supply glut persists.
