Grains were in recovery mode on Wednesday after two weeks of sliding lower. In outside markets, crude oil was trying to bounce off its worst prices in 3.5 months while the US dollar was weaker to start the day ahead of the Fed announcement.
Overnight, there was some interest in wheat deals with Egypt tendering for an unspecified amount of wheat. In addition, Jordan and Indonesia were also shopping for milling wheat.
February NOPA crush will be out at 11 am CDT today. The trade expects a soft month thanks to weakening crush margins. Only 146.1 MB are expected to have been crushed in February, slightly off from 146.2 in the same month last year.
In the US, cold temperatures along the Eastern Cornbelt of IN/OH/KY are thought to have caused some winter kill damage to the wheat crop there. In the Plains, there are expected to be rains in the 11-15 day outlook although it will be confined mostly to the Eastern Plains, with the SW parts of KS/OK/TX not expected to see much moisture.
The Federal Reserve is expected to raise interest rates in their policy statement at 1 PM CDT. If realized, this would be the second time in three months. The rate-hike is widely expected, so the real news will be if the U.S. central bank will signal an even faster pace of monetary tightening this year than the current three rate hikes that it projected at its December meeting.
US export competitiveness improved this week with US prices falling more than foreign country FOB grain prices. The exception was Argentina’s wheat which moved $2/MT lower relative to US prices over the past week.
WORLD EXPORT PRICE SPREADS RELATIVE TO US
|
Crop |
Country |
Today |
Last Week |
Last Year |
|
CRN |
ARG |
+$2.3 |
-$1.8 |
+$1.3 |
|
CRN |
BRZ |
-$15.2 |
-$21.0 |
-$19.9 |
|
CRN |
EUR |
+$5.1 |
+$2.1 |
-$15.6 |
|
SBN |
ARG |
-$5.9 |
-$8.1 |
-$10.1 |
|
SBN |
BRZ |
+$4.0 |
-$1.0 |
-$2.7 |
|
WHT |
ARG |
-$2.0 |
+$0.3 |
-$4.6 |
|
WHT |
EUR |
-$13.0 |
-$16.8 |
-$52.5 |
Export spreads represent a foreign country price minus US price at export destinations, in USD per metric ton. A higher spread indicates
the foreign price has risen relative to US prices, making the foreign country less competitive and the US more competitive.
The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)
