Grains were mixed overnight with wheat adding to Monday’s losses while corn and beans started the day in positive territory. Stock futures were on the defensive giving up nearly 0.75% while crude oil was soft as it continues its slide over the past week.
Malaysian palm oil futures rose on Tuesday, heading for their third straight session of gains on the back of a weaker ringgit MYR=, outweighing worries that an export tax on crude palm oil would dampen demand. Malaysian palm oil inventories in March are forecast to have dropped below 2 million tonnes, breaching that level for the first time in a year, with production coming in at the weakest for the month since 2007, a Reuters survey showed. Shrinking stockpiles at the world's No.2 palm oil producer as a crop-damaging El Nino weather pattern crimps output could underpin benchmark prices of the tropical oil, which have risen over the past two months and reached a two-year high.
Analyst Ukragroconsult raised its forecast for Ukraine's 2016 wheat harvest to 18.5 million tonnes on Tuesday, against a previous estimate of 17.7 million tonnes. The consultancy's Yelizaveta Malyshko told Reuters that very favorable weather this spring and optimal moisture content in soil were the main reason for the improved outlook. Ukraine, the world's third-largest grain exporter, harvested 26.5 million tonnes of wheat in 2015.
Weather continues to point to good odds of the Plains getting some moisture between Apr 10-15. However, weather models of late are showing better rain potential more towards the central Plains and less towards the Western Plains were the most severe drought issues are occurring. KC wheat still has support at $4.60 but needs to find a breakout above $5 to change the choppy patterns of late.
Stocks were on shaky ground on Tuesday as the IMF warned of potential risk from developing markets. Major emerging markets, led by China, are increasingly likely to spread fear to financial markets, leading to poor stock performance in the U.S. and other developed countries, the International Monetary Fund said. In oil, prices continue to sink as traders discount any deal to curb production by OPEC in the meeting this month. Recent comments from Saudi Arabia cast doubts about the ability of world oil producers to agree to an output freeze at their meeting in Qatar.
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