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USDA to release latest Supply and Demand Report at 11:00 CST

Grains were lower overnight while S&P futures were slightly higher and crude oil dipped lower.

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Grains were lower overnight while S&P futures were slightly higher and crude oil dipped lower.

USDA will release their latest supply and demand report this morning at 11 AM CDT. Expectations are for modest increases in US production and carryout from the October report.

US Production (in billion bushels)

Expected Range Oct USDA

Corn 13.579 13.435-13.718 13.555

Soybeans 3.915 3.895-3.955 3.888

US Ending Stocks (in million bushels)

Expected Range Oct USDA

Corn 1,597 1,461-1,702 1,561

Soybeans 436 375-474 425

Wheat 877 836-914 861

In overnight news, Brazil's government crop supply agency Conab raised its forecast for a record national 2015/16 soybean crop to between 101.2 million and 102.8 million tonnes on Tuesday, up from 100.1-101.9 million seen last month. Conab's overall corn forecast, however, fell to between 81.1 million and 82.7 million tonnes, down from 82.6-83.6 million in October, the agency said in its second report of the crop year. Rains are expected to continue over Ukraine and Russia where dry conditions were hampering the winter wheat crop. Monday saw a large selloff in wheat futures in part related to the rains in the FSU states.

S&P futures (ESZ5) were lower trying to avoid a fifth straight down day. Analysts blamed Monday’s drop on investors stepping away from stocks because a December interest-rate hike looks more likely. If the Fed is going for a rate hike in December, many investors will now be cautious about buying into equities.

Oil futures were moving in and out of negative territory on Tuesday as a top energy watchdog said the decision by the Organization of the Petroleum Exporting Countries to keep pumping could depress prices until the end of the decade. In its World Energy Outlook, the International Energy Agency said “a lasting switch in OPEC production strategy in favor of securing a higher share of the oil market mix” could keep the price of Brent crude at around $50 a barrel through to the end of the decade. Under a more bullish scenario, the IEA said oil could rebound to around $80 a barrel by 2020 as the oversupplied market begins to balance.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

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