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Grains In Positive Territory to Start the Week

In Outside Markets, Crude Oil drifts Lower

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Grains were in positive territory to start the week led by wheat. In outside markets, crude oil and the US dollar drifted lower.

Australia's 2017/18 wheat crop is expected to fall 32% from the previous season, according to ABARES govt forecast, as seasonal conditions turn drier, pushing yields to average levels. Farmers there are expected to harvest 23.98 MMT of wheat next season down from a record 35.13 MMT in 2016/17. Acreage planted in April is expected to be off only 1% but dry conditions expected from a re-surging El Nino in the next months are expected to push yields to a three-year low.

Heavy rain has hampered road transport towards northern ports in Brazil. But, estimates continue to grow on the overall size of the Brazilian bean crop. Traders look for an upward revision in the USDA monthly to 106 MMT up from 104 previously.

South Texas saw some decent rains over the weekend bringing 1 to 3 inches of precipitation. Combined with previous rains over the past week it should be adequate for improved spring field work and early planting. Meanwhile OK/KS saw no real precipitation over the weekend. The next 7 days looks dry with weather patterns favoring locations to the East in AR/MO & S IL.

Crude oil softened overnight as US oil rig counts continued to rise. The number rose 609, the highest since October 2015 and the seventh straight week rig numbers have risen. Also weighing on trade is data last week showing Russia's February oil output was unchanged from January at 11.11 million barrels per day (bpd), giving doubt on Russia's moves to rein in output as part of a pact with oil producers last year.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

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