This week the grains traded higher with soybeans gaining 10 1/2 cents, corn increasing 5 1/2 cents and wheat in Chicago increasing 3 1/2 cents. On Thursday, Federal Reserve Chairman, Janet Yellen, announced that interest rates will remain unchanged at 0-0.25 percent which seemed to have little impact on the grains immediately following the announcement. Janet Yellen emphasized that our economy was improving and the labor market was improving but that uncertainties abroad lowered their inflation outlook. It seems that interest rates will remain low at least for the time being which should pressure the U.S. Dollar.
Grains found strength on Monday on concerns about Brazil's crop which saw two consecutive frosts over the weekend. Parts of the southern state of Rio Grande do Sul saw deep frost Friday night and more freezing temperatures on Saturday night, said Pedro Aguiar, of Cotrisa cooperative in northeastern Rio Grande do Sul. The market also benefited from a better than expected wheat export inspection report on Monday which showed 647,000 MT versus trade expectations of 325,000 to 475,000 MT. Soybeans also came in better than expected at 370,000 MT versus trade estimates of only 150,000 to 350,000 MT. Only corn failed to meet expectations with a sub-par week of 711,000 MT as compared to 775,000 to 950,000 MT expected.
After the close on Monday, USDA reported corn harvest at 5 percent complete across the US, lagging slightly the 5-year average of 9 percent at this time of year. The condition of the corn crop was unchanged with 68 percent of the crop rated as good-to-excellent. For soybeans there was a surprising dip in conditions with 61 percent of the crop good-to-excellent as compared to 63 percent last week.
On Tuesday, NOPA reported the August crush numbers at 135.304 million bushels compared to the average analyst guess of 135 million bushels. Although this crush number slipped lower from July's 145.227 million bushels it is still well over the four year moving average of 117.414 million bushels and the largest August crush since 2007. Soyoil stocks were reported at 1.480 billion pounds which is higher than 2014 soyoil stocks of 1.213 billion pounds. Soymeal exports were reported at 491,510 metric tons.
Export sales were in line with expectations this week for all the grains. Corn booked 533,000 metric tons within expectations which ranged from 400,000-600,000 metric tons. Soybeans also met expectations with 912,000 metric tons sold this week. Soybean sales were mostly made up of sales to China and unknown destinations. Wheat booked 377,500 metric tons which was up 30 percent from last week. Wheat sales were within the expectations which ranged from 275,000-450,000 metric tons.
Ethanol production increased week over week by 3,000 barrels per day to 961,000 barrels per day. This is a strong start to the new marketing year, already 34,000 barrels ahead of last year during the same time period. Ethanol stocks declined this week by 351,000 barrels to 18.29 million barrels.
