Grains inched lower overnight with KC wheat continue to take the leader position on the downside. In outside markets, crude oil was pushing into new lows, off 60-cents a barrel and the US dollar and equities were pointing slightly lower following yesterday’s sharp slide.
USDA reported a 120,-000 MT of HRW wheat was sold to Saudi Arabia and 120,000 MT of soybeans were sold to China.
Rains is still in the weather cards for the coming weeks over the Southern Plains. However, overnight model guidance shows less rainfall (vs. yesterday) through month's end across the Texas and Oklahoma US wheat crop areas, but maintains near to above widespread 1.0 inch totals across much of Kansas.
In China, soy crush margins continue to come under pressure with crush margins dipping to their lowest level in 18 months. Rapid expansion of the soy crush margin in the Fall of 2016 helped push a buying spree of US soybeans, but with China’s margins under pressure and South America competition, it could be a dismal period of US export activity.
Yesterday, US equities and the dollar index came under selling pressure. In part, the dollar continued its lower trend on the Fed’s announcement they would take a less hawkish approach to future rate hikes than investors had thought. Furthermore, stocks are seeing pressure in auto- and consumer-sensitive areas suggesting the economy may not be as strong as expected. Also, investors will be watching the political theater around Thursday's House vote to repeal Obamacare, as these battles are threatening to push out tax reform and more stimulus well into the end of 2017 or 2018. A defeat in Thursday's vote would send a clear signal that the rest of Trump's agenda — taxes, the budget, and infrastructure — could be on shaky ground.
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