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Grains Lower on Follow-Through Weakness

Stock futures get a jolt this morning

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Grains were lower on follow through weakness from Thursday’s losses In outside markets, S&P futures and crude oil were higher.

Soybeans suffered a 20-cent loss on Thursday after news from USDA showed significantly below expectations on export sales the past week. Sales of soybeans were only 655,600 MT versus trade expectations of 1,400,000 to 1,800,000 MT. Wheat was also substantially below expectations with an anemic 87,000 MT of sales as compared to 300- to 500,000 MT expected by the trade.

Trade estimates ahead of USDA’s supply and demand report on Tuesday show analysts expect USDA to bump up production and carryout estimates. Ending stocks of corn are expected to go to 1,597 MB from 1,561 MB in October while for soybeans the stocks figure is expected to go from 425 MB in October to 436 MB in November.

In international weather, Brazil continues to see beneficial rains as planting progress moves ahead. Central and Southern Brazil are expected to see rains return by mid-November which should help in crop development.

Stock futures got a jolt this morning as better than expected labor data showed unemployment shrinking. This caused traders to put more weight on the likelihood of a potential interest rate hike by the Fed in their December meeting. The news sent the US dollar hit a 6 month higher on the news which was bearish for US commodities like oil.

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

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