Grains drifted lower overnight following Tuesday’s rally in prices, while in outside markets S&P futures and crude posted positive gains.
On Tuesday, NOPA crush figures for January showed a significant curtailing in soybean crush. According to NOPA, January soybean crushings were only 150.45 MB versus trade expectations of 155.26 MB and a December estimate of 157.71. Although soybeans sold off on that news, they quickly recovered on the day to close higher. Short-term support comes from Brazil as export loadings of soybeans and corn were double that of a year ago as rains delayed shipments, particularly for Paranagua.
For wheat, traders continue to monitor the situation in Egypt. The country's agricultural quarantine authority has rejected a shipment of Canadian wheat, saying it contained traces of the fungus ergot, a trade source said as well as official documents obtained by Reuters showed. The move by the quarantine authority is the latest in a series of rejections, which have caused serious concerns over Egypt's tough new quality rules and disrupted the country's massive wheat imports. Russian wheat export prices fell by $2 a MT last week, hit by concerns about future supply contracts to Egypt.
All eyes are on the oil market following yesterday’s announcement that Saudi Arabia, Russia, Venezuela and Qatar reached a deal to freeze crude output at January levels. They now go to Tehran to try and barter a deal with Iran. “Asking Iran to freeze its oil production level is illogical... when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices. How can they expect Iran to cooperate now and pay the price?” That’s Iran’s OPEC envoy Mehdi Asali, quoted in the Iranian newspaper Shargh. Iran has said it would keep pumping until it hits pre-sanction levels.
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