Grains were mostly steady overnight as corn and wheat were gravitating towards unchanged while soybeans was up a penny. Stock futures and crude oil were lower giving back some of yesterday’s gains.
Yesterday, EIA showed a drop in ethanol production for the week of 7,000 barrels per day, down to 944,000 barrels per day. At this time of year production levels for ethanol generally increase until the end of the year so seeing even a one-week drop is problematic for demand bulls.
In overnight news, Egypt tendered for more wheat and although the results have not been announced the lowest offer was from Poland at $195.84 FOB. The last Egypt wheat deal went to Russia and Romania. Jordan also announced a tender to buy hard milling wheat but that deal is expected to go to Europe. And the Korea Feed Association rejected all offers on a tender to buy corn, stating that prices were too high.
In outside markets, the Fed announced no change in interest rates yesterday, but said economic indicators on housing and business investment were improving, helping to offset employment issues and global weakness. As such, analysts are leaning more to a rate hike in December as a result of the Fed’s guidance, versus Q1 in 2016 prior to yesterday’s announcement. S&P futures (ESZ5) initially sold off following the announcement but recovered to close the day higher.
The cost of crude oil (GCLZ5 / QMZ5) fell on Thursday as traders took profits after prices rallied in the previous session, driven by smaller-than-expected crude stockpile growth in the US. On Wednesday, the EIA said the nation's crude stockpile grew by 3.4 million barrels last week, below the estimate of a 4.1 million-barrel increase by the industry group API. However, US oil output, whose booming growth in the past few years has fueled the global glut of crude, rose slightly last week. While US production peaked in April at 9.6 million barrels a day, it has remained stable around 9.1 million for the past few weeks.
USDA WEEKLY EXPORT SALES (in thousand metric tons)
Actual Expected
Corn 708.8 300-500
Soybeans 2,156 1,600-2,000
Wheat 550 350-550
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