Grains were weaker overnight with soybeans leading the complex lower. In outside markets, crude oil pushed back from earlier losses following yesterday’s $2 a barrel rally while S&P futures fell off the 2,000 point mark in overnight trade.
Weekly crop reports from a few key wheat states showed mostly deteriorating conditions in the face of unseasonably warm & dry weather. The Kansas office of USDA/NASS pegged 56% of the wheat crop as good/excellent. Texas showed an increase in ratings from 40% to 42%, but still sits well off of normal for this time of year.
The European Commission on Tuesday forecast that EU soft wheat stocks would rise further in 2016/17 despite an expected drop in production, adding to large inventories that it already sees reaching a seven-year high in the current 2015/16 season. In its first crop forecasts for 2016/17, the Commission projected soft wheat end-of-season stocks in the European Union of 17.4 MMT, up slightly from 17.2 MMT forecast for 2015/16.
On Monday, USDA’s export inspections were slightly better than expectations for corn and wheat, while soybeans were at the high end of expectations. UDA will release its monthly crop forecast on Wednesday, with the consensus of analysts expecting little change in US grains carryout.
Crude oil continues to find strength as prices get closer to the $40 a barrel range. Oil prices surged Monday on hopes that declines in oil drilling around the world and an output deal among major producers would shrink the global glut of crude.
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