Grains were weaker to unchanged overnight with soybeans giving up nearly 6 cents and wheat down 3. Going into the morning pause in trading, corn was trying to hold onto a fractional gain. In outside markets, S&P futures were off sharply, losing almost 2% of their value while crude oil was off over a $1 a barrel.
U.S. soybeans lost ground on Wednesday, giving up some of last session's gains as South American supply was seen hitting records despite concerns over wet harvest weather in Brazil. Yesterday, Brazil consultant Agro Consult expected a 99.2 MMT soybean crop which although slightly lower than USDA’s estimate of 100 MMT is still up from last year’s tally of 96.2 MMT. However, Agro Consult pegs Brazil’s corn crop at 85.6, well above USDA at 81.5.
In other news yesterday, Informa came out with forecasts for 2016 US crop acreage. They pegged corn acres at 88.9 MA which is up from 2015 acres of 88.0, while soybeans they suggest will be sharply higher at 85.2 in 2016 versus 82.7 in 2015.
In overnight news, there was some modest tender activity for corn and feed wheat although the deals were announced as optional-origin. Most expect the business ultimately to go to South America on the basis of lower prices.
Global stocks resumed their recent sell-off Wednesday as oil prices sank to a 12-year low and resurgent concerns about global growth snapped a brief bout of stabilization in financial markets. Shares in Asia and Europe were sharply lower and investors favored perceived havens such as the yen, gold and U.S. Treasury’s. Analysts said investors were spooked by further declines in oil prices and a lack of stimulus announcements from Beijing in the wake of data released Tuesday showing slowing growth.
The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)
