Grains posted modest gains overnight while outside markets saw S&P futures up following yesterday’s near collapse while crude oil was hovering in unchanged territory.
In Argentina there are growing concerns about dryness. Net drying occurred in quite a few areas and warmer temperatures have begun to accelerate drying rates. Very warm to hot temperatures into the weekend with restricted rainfall may bring on greater dryness and some crop stress for a little while, but rain late in the weekend and more again late next week will offer a chance for relief – at least in some areas. Another week or two of dry weather could seriously impact plant development for several summer crops, but weekend rainfall and cooling temperatures should be sufficient for a little relief.
Consultancy Strategie Grains on Thursday, forecast a rise in the European Union's soft wheat exports next season, helped by reduced competition from rival Black Sea origins, mainly Ukraine. In its first estimate for next season's exports, the consultancy put EU exports in 2016/17 at 28.9 MMT, up from 28.1 in 2015/2016.
Russia's grain exports in December hit a record high of 3.8 MMT, owing to a weak rouble making Russian grain more competitive on global dollar-denominated markets, SovEcon agriculture consultancy said in a note. Due to seasonally lower demand, grain exports will decline to 1.4-1.5 MMT in January, of which between 1.1-1.2 MMT will be wheat. Grain shipments are likely to gain pace in February and March when many forward contracts signed by traders in December and January must be fulfilled, SovEcon said.
S&P futures were finding support early on, but yesterday’s 3.5% collapse at one-point during the trade session is sending fear throughout the financial markets. Investment managers are warning that the S&P 500, which has lost 9 percent this year, could drop another 10 percent and oil could fall as low as $20 a barrel. Jeffrey Rottinghaus, whose T. Rowe Price mutual fund beat 99 percent of rivals over the past year, also said the U.S. economy may slip into a mild recession.
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