Grains were firmer to start the week led by soybeans. Crude oil also advanced to fresh highs.
USDA announced a 426,000 MT sale of soybeans to China.
Rains were good over the weekend in SA, especially in Brazil easing dryness in Parana/Sao Paulo/N. Rio Grande do Sul. Argentina got only 15% coverage over the weekend with 5% coverage expected in the next week. The extended outlook for 16 to 30 day, Brazil looks fairly wet for much of the country but Argentina may see some dryness in the central and southern parts of the country.
Private consultant Abiove pegs Brazil’s soy crop at a record-large 101.3 MMT; however, that is below the 102 MMT forecast of USDA. In wheat, the Australian govt forecasted the wheat crop there at 32.6 MMT, a big jump from their Sep forecast of 28.2 and higher than the record large year of 2012 when they hit 29.6.
China is aiming to produce 4 million tonnes of ethanol by 2020, doubling output from the current level, even as it keeps tight control over the use of food grains to make the bio-fuel, a government plan showed on Monday.
The world's largest energy consumer plans to raise the non-fossil fuel portion of primary energy consumption to 15 percent from 12 percent by the end of its current five-year plan in 2020.
Crude prices were up on continued optimism about the OPEC output cut deal. However, one large uncertainty in the global supply balance is output from the US shale producers, who proved more resilient than expected to weak oil prices. U.S. energy firms extended their recovery in oil drilling into a seventh month last week,hitting 477 rigs. That’s up from the low set in May 2016 of 314.
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