Grains drifted lower overnight as ample supplies and limited demand news kept prices listless. In outside markets, S&P futures were marginally higher as was crude oil, while the US dollar was down.
An outlook for rain in OK/KS and into the soft red wheat territory of the Midwest has eased fears of dry weather for the winter wheat crop. In Australia, hot and dry weather is expected to take its toll on the wheat crop there as it goes through filling stage. USDA’s Ag Attaché pegged the Australia wheat crop at 24 MMT, below USDA’s forecast of 27 MMT. Forecasters look for little relief in the El Nino induced weather pattern as the next 10 days show spotty chances for moisture.
In Brazil, soybean planting continues to be running without significant problems. Farmers in southern Brazil have had heavy rains but that has reportedly had little impact on crop development so far. In central Brazil where it has been dry, forecasters are looking for 2 to 6 inches of rain over the next two weeks, which should be beneficial for planting.
Overnight, Russia’s ag minister announced that if the Russian Rouble stabilized, the government would remove the export tax on wheat leaving the country for global markets. News also suggested that Chinese buyers would stop buying US DDGS amid worries that Beijing may launch another anti-dumping probe into imports of the feed ingredient. China is the world's top buyer of DDGS, a by-product of corn ethanol that is used by feed mills as a substitute for corn and soymeal. China imports almost all of its needs from the United States.
In S&P futures (ESZ5), traders await clues from the Federal Reserve about the timing of a U.S. interest rate increase. A rate hike at the Fed's two-day policy meeting which ends later on Wednesday is virtually priced out due to underlying concerns over a slowdown in China and the broader impact on global growth.
In crude oil (GCLZ5 / QMZ5), prices were off sharply on Tuesday after US congressional leaders proposed to sell 58 million barrels of oil from US emergency reserves over 6 years starting in fiscal year 2018 to help pay for mandatory budget spending cuts. API crude stocks released late Tuesday showed inventories at the Cushing, OK delivery hub fell 748,000 barrels, but official estimates from EIA will be released later this morning.
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