Overnight markets were generally higher with grains, stock futures and crude oil all posting positive gains.
Wednesday saw soybeans break through and close above $9 and strong demand has helped ease talks of growing US supplies. However, the looming South American crop is a potential rally killer as well. Brazil's new soybean crop that is currently being planted is expected to produce a record 100.6 MMT, up from the 96.2 MMT in 2015, local analyst Agroconsult said on Wednesday. Planting is expected to accelerate in the coming weeks as rains are forecast to turn more frequent as Brazil moves into its rainy season, the analyst said in its first forecast of the new crop.
Industry analysts in China think the country will buy about 50 percent less corn for state stockpiles in the 2015/16 season than the previous year as local governments offer subsidies to encourage processors to use more domestic grain. Beijing will buy 40-50 MMT of corn for state stocks during a six-month purchasing period that starts next month, compared with 83 million in 2014/15, the analysts said.
Overnight, Japan bought nearly 100,000 MT from the US of food quality wheat and 35,000 MT from Canada in a regular tender that closed overnight. Last week, the same tender saw the US only getting 64,000 MT on the deal.
S&P futures (ESZ5) were higher overnight ahead of a host of key earnings reports and economic data. Dow components 3M, Caterpillar and McDonald's report results before the bell, while technology majors Microsoft, Alphabet, AT&T and Amazon are due to report after the close. U.S. data scheduled for Thursday includes unemployment benefits claims. The data is expected to show last week's claims increased to 265,000. Existing home sales are expected to have grown 1.4 percent to an annual rate of 5.38 million units in September.
Oil prices (GCLZ5 / QMZ5) rebounded Thursday with investors bargain hunting after oil fell to near three-week lows this week. The gains came despite mixed news on U.S. inventories, underscoring how used to bad news the crude market has become. The U.S. Energy Information Administration reported Wednesday that domestic crude oil inventories expanded by more-than-expected 8 million barrels last week. Inventories in the U.S. remain near levels not seen for this time of year in at least the last 80 years, adding further pressure to the already oversupplied global market.
WEEKLY EXPORT SALES (in thousand metric tons)
Actual Expected
Corn 248 450-650
Soybeans 2,100 1,200-1,800
Wheat 359 300-500
