Grains firmed in the overnight session with soybeans leading the complex higher on 4 cent advances in early morning trade. Outside markets were firm as well with oil bouncing off its lows on a $1.50 a barrel advance and S&P futures were up 1.3%.
Export tender activity has heated up of late although many of the deals seem to be getting done without US participation. Notably, Egypt’s wheat deal yesterday for 235,000 MT was won by Romania, France and Russia. Prices between US and French wheat have been diverging this week thanks to the Euro’s slide against the US dollar. Current FOB prices in France are $32/MT cheaper than the US, which compares to only a $25/MT discount this time last month. India also announced the results of its corn tender which ended up going to a South Korea trading firm.
In South America, the next 7 days look to bring excessive moisture in parts of Northern Brazil while Argentina will see warm and dry weather. For the 7 to 14 day forecast rain should return to northeastern Argentina and southern Brazil boosting soil moisture and ending recent drying.
U.S. oil prices rebounded more than $1 a barrel from 12-year lows on Thursday, posting their biggest daily gain this year as rallying financial markets gave some bearish traders reason to take profits on record short positions. U.S. crude briefly vaulted back to $30 as hopes for easier monetary policy from Europe fueled a recovery in European and U.S. stock markets. Even bearish EIA crude inventory data which showed a 3.8 million barrel increase in stocks versus a 2.8 increase expected didn’t stymie the rally. Instead, the report triggered buying among traders who had feared the figures could be even worse. Still, few traders expected a quick recovery from this year's 20 percent slump, with oil under pressure from a deepening supply glut and signs of economic weakness in China.
The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)
