Grains were mixed overnight with corn and wheat posting modest gains, while soybeans turned lower. In outside markets, S&P futures and crude oil were off as was the US dollar.
Last week’s USDA export sales showed strong sales for soybeans, coming in at 2.07 MMT more than double the amount expected by analysts which ranged from 0.9 to 1.1 MMT. Corn export sales were 803,600 MT versus 500-700,000 MT expected, while wheat came in at 370,300 MT versus expectations of 250-450,000 MT.
In weather news, South Africa reported a couple of locally heavy rain amounts during the long holiday weekend, but most of the precipitation was quite light and temperatures were at extreme highs for the corn crop there. South Africa rainfall this week is expected to be restricted with inadequate. Latest forecast model runs Sunday reduced rainfall in the second week with temperatures through Saturday varying in the 90s to 106 degrees Fahrenheit, creating a dismal outlook for summer crops across the nation.
In Brazil, northern Brazil which has been dry saw only spotty rainfall over the holiday and not enough to counter the 90 to 100 degree temps in the region. However, the region appears to have better rain prospects in the coming days. The greatest relief from dryness is expected Friday through January 6, although some increase in showers will occur through mid-week this week. Most of this week’s rain will be light and erratic, although greater than that of the holiday weekend and some easement from moisture stress will begin. The greatest relief from dryness is expected January 3-6, although there will be sufficient rain prior to that time for some improvement. In southern Brazil where it has been wet and cool, as temperatures are expected to increase in the forecast as rains leave the region and move northward.
Argentina’s soil moisture is still rated favorably in most of the summer crop region. The ground is saturated with moisture in the northeast and from southeastern Cordoba to northwestern Buenos Aires. A small pocket of east-central Buenos Aires was also reporting saturated topsoil conditions. Overall, most of Argentina crops will remain in favorable condition for the next couple of weeks with increasing soil moisture in the west and some gradual drying in the southeast.
In oil, the news continues to be bearish. Figures from the Organization of the Petroleum Exporting Countries imply a glut of more than 2 million barrels per day, equal to over 2 percent of world demand. Oversupply is expected to persist into the earlier part of next year. Saudi Arabia is expected to announce its 2016 state budget on Monday, and the details will be scrutinized for any indication that it may give about the likelihood of the kingdom changing its oil policy.
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