Grains found modest strength to open the week with soybeans leading the complex on a 6-cent advance, wheat posted a 3-cent gain, and corn followed on a one-cent improvement.
Action following Friday’s USDA supply and demand report seems somewhat tepid this morning. Friday’s report was mildly bullish for corn and modestly bearish for beans and wheat. But, the central theme of the supply and demand data continues to be large carry-outs for all crops. With harvest fast approaching it seems unlikely that this report will prove to be a catalyst for upside potential in the next 30 days.
In wheat, eyes are on Russia this week to see if the government there will reduce the tax, which stops traders from fully capitalizing on Russia's weaker rouble. Russia's Agriculture Ministry said it will raise the purchase prices for its grain intervention fund and has drawn up proposals to ease the burden of wheat export duty, Deputy Agriculture Minister Evgeny Gromyko said on Saturday.
For beans, traders will look for demand side news on Tuesday when the August NOPA crush estimate is released. Export business for both corn and beans has been relatively good in recent weeks, but going into the 2015 marketing year, new-crop sales are still lagging behind last year’s pace. Both corn and soybeans have less than 30 percent of last year’s commitments but USDA’s official forecast for 2015 has only a 6 percent drop expected for soybeans and 1 percent slip in corn. The lack of strong export demand could hamper the prospects for a long-term rally.
