Grains were in a bullish mood this morning coming back from the three-day weekend with positive gains across the board. Wheat and beans led the charge higher posting 8 cent gains in the overnight session while corn logged a 5-cent advance.
Global markets felt more at ease on Monday and Tuesday with China’s stock market showing a robust advance of 2.9 percent on Tuesday, although speculation exists that the buying may have been triggered by the government in an attempt to bolster the market. US stock futures were also higher in overnight trade with S&P futures up 1.9 percent suggesting a stronger open for equities this morning. However, there are still lingering doubts about the market’s strength. Japan's Nikkei Stock Index fell to a 7-month low on concern Chinese demand for Japanese goods remains weak after Chinese Aug imports fell for the tenth consecutive month.
In wheat, Russian agriculture consultancy IKAR said on Tuesday it had lowered its forecast for Russia's 2015 wheat crop to 60.6 MMT from 61.8 MMT. The downgrade was due to a slightly lower than expected harvest in Urals and Siberia, it said. Its forecast for corn remained unchanged at 12.5-13.0 MMT.
On Tuesday, a Chinese government think-tank cut its 2015/16 forecast for the country's corn output by 3 MMT to 229 MMT as a result of a localized drought. Nonetheless, it would still be a record output and an increase of 6.2 percent over last year. The consulting group expects China to curb imports of corn and milo. Imports of sorghum for 2015/16 were seen dropping to 7 MMT from the 10 MMT expected in the current marketing year, according to its latest estimate.
In Ukraine, the Ag Minister there said wheat exports are expected to jump to 15.9 MMT in the 2015/16 season from 11.2 MMT a season earlier due to a large harvest and stocks. For corn, they expect exports to be only 16.9 MMT this year versus 18.8 MMT in 2014/15 and a USDA forecast of 17.5 MMT.
USDA’s monthly WASDE report will be released on Friday and although no official pre-report estimates have been released, it would seem that early guesses are saying that there will not be much change by USDA in terms of production as they opt for more definitive data in October once harvest has started.
