In the overnight session the grains moved higher with corn up 1 1/2 cents, soybeans up 6 1/2 cents and wheat up 3 1/4 cents going into this morning’s pause in trade. The dollar index was trading lower most of the night, but has found some buying support underneath the 100 day moving average and is now trading near the open of last night. Crude oil is up 41 cents this morning.
This morning’s export sales report held some surprises particularly for wheat which showed net cancellations for old crop sales. Wheat sales recorded a marketing year low for old crop when it showed 449,200 metric tons of old crop cancellations. New crop wheat sales only totaled to 852,900 metric tons supported by some old crop sales being switched over onto the new crop books. Corn export sales were down 4 percent week over week, booking 832,500 metric tons for old crop delivery. Soybean sales were very strong this week with 433,400 metric tons booked which is a sharp increase from the 102,100 metric tons booked last week. With South America on the downhill side of harvest, it is unexpected to see such a large week of U.S. soybean sales.
Ethanol production fell 9,000 barrels per day last week to 921,000 barrels per day. Ethanol stocks slipped 545,000 barrels to 20.8 million barrels this week as well. Ethanol production has been steadily declining since this year’s production highs in November. Typically, we would expect to see a seasonal increase in production between March and May as we head into driving season, but we have yet to observe a relative increase in ethanol production during this time period. Ethanol production is running 5.2 percent ahead of last year’s pace which is well ahead of the USDA expectations of an increase in production by 1.3 percent.
