In the overnight session the grains traded higher. Concerns about dryness in central and southern Argentina, a weaker U.S. Dollar and strong weekly export sales are all helping to support grain prices at the start of the week. The U.S. government is still shutdown which will impact the timing of reports this week starting with the export inspections on Monday.
Heavy rains fell over the weekend in the northern crop growing regions of Argentina including Chaco, North West Corrientes, eastern Santiago Del Estero and Northern Santa Fe. As much as 12.44 inches of rain fell in parts of Chaco with 5-8 inches falling in other parts of the region. Despite the heavy rains in the northern part of the growing region the forecast looks to bring more dry weather in the central and southern parts. The next two weeks look to bring more hot dry weather to areas that already has marginal subsoil moisture.
Brazil harvest is off to a slow start this year due to delayed planting at the beginning of the season. Analysts estimate Mato Grasso’s soybean harvest is between 2.8 and 3.29 percent complete compared to 11.49 percent last year during the same period. Mato Grosso is usually the first state to begin harvesting in Brazil. This slight harvest delay may be helpful for U.S exports in the short run, but reports of strong yields may have a more negative effect on U.S. soybean prices once harvest is fully ramped up.
Basis for both corn and soybeans increased last week across the U.S. The national average soybeans basis advanced .7 cents and corn basis increased 1.5 cents. Soybean crush plants increased basis by an average of 2 cents, while river terminals lowered soybean basis by 2 cents. Ethanol plants were steady this week with river terminals corn basis edging up a penny.
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