Grains were in negative territory to start the day. In outside markets, equity futures were sharply higher going into the morning trade session while crude oil also was holding onto positive gains.
On Monday, USDA’s attache to Argentina forecast the soybean crop there to be 55 MMT, below USDA’s official forecast of 57 MMT. 2016/2017 expected area harvested is revised down to 19.3 million hectares due to greater competition from alternative crops - corn and sunflower - and lower than expected wheat plantings resulting in lower 2nd crop soybean area. Adverse weather conditions, crop damage, and harvest delays forced a number of producers to abandon their plans to plant wheat for the 2016/2017 winter crop season.
Yesterday’s USDA crop progress report showed 62 percent of the soybean crop harvested versus 44 percent last week and on track with the 5-year average of 63 percent. Corn harvest grew to 46 percent this week versus 35 percent last week and 49 percent 5-yr avg.
This morning, USDA announced a deal for 706,500 MT of soybeans to China for the 2016/17 marketing year. Japan's Ministry of Agriculture is seeking to buy a total of 132,015 tonnes of food quality wheat from the United States, Canada and Australia in a regular tender that will close late on Thursday.
Corn and soybean futures rose for a third consecutive session on Monday, with prices underpinned by short-covering and strong demand. Malaysian palm oil surged to its highest level in about six months Monday, gaining on forecasts of weaker production growth for the month of October. In the last two sessions, palm oil prices have rallied 5.7 percent which has helped the soy complex as well.
Oil prices rose on Tuesday, helped by a weaker dollar and the notion that global markets oversupply may be moderating, ahead of a November meeting of OPEC producers that could decide to cut production. A proposal by the Organization of the Petroleum Exporting Countries to cut or cap output helped lift crude prices above $50, but not much more because market participants doubt the cartel's ability to strike and implement a concrete deal. But several analysts say a two-year global supply glut could be receding if the latest oil inventories are taken into account. They say that stocks are not as high as usual ahead of the winter fuels season.
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