Grains found strength overnight with soybeans eclipsing the psychological $9 mark for the first time since December. Outside markets were mixed as the US dollar continued to come under pressure while crude oil added to its gains from Wednesday.
Grains continue to see large short positions by managed money, even as this rally has picked up some modest steam. In corn, spec funds held a record large short position on March 8 of 265,000 contracts, but even with this rally, short positions still likely hover around 245,000, leading to more room to run as we get closer to key acreage report data at the end of the month (watch GrainTV).
This morning, USDA’s weekly export sales were also supportive for soybeans and corn. Old-crop corn sales exceeded expectations coming in at 1.2 MMT while soybeans saw old-crop sales at the high end of expectations with 623,700 MT while new-crop sales came in well above expectations at 235,100 MT.
OC Actual OC Expected NC Actual NC Expected
Corn 1,227 700-1,100 61.4 0-150
Soybeans 623.7 400-700 235.1 25-75
Wheat 212.9 250-450 159.3 50-100
In outside markets, the Fed’s announcement yesterday that the course on interest rate policies for 2016 would likely lead to 2 interest rate hikes instead of 3 sent the US dollar lower. Since the announcement, the US dollar index has plunged 2% and is at its lowest level since mid-October. Crude oil was buoyed yesterday as EIA crude stocks came in below expectations with only a 1.3 million barrel build in inventories versus a 3.4 million build that was expected.
The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)
