Grain markets were mixed overnight with wheat stronger, and corn and beans slightly weaker to unchanged. In outside markets, S&P futures and oil were higher.
Yesterday brought a round of good demand news for soybeans, but that couldn’t stop prices from dropping over 6 cents a bushel. Better than expected weekly export sales of 2.1 MMT versus trade expectations of 1.2 to 1.8 MMT along with a USDA announced sale of 463,000 MT were positive signs of underlying demand, but overarching supply concerns won the tug of war yesterday. In Brazil, analysts are still pointing to a better than 100 MMT crop as planting season kicks into full swing.
Overnight, China’s central bank cut its benchmark lending rate and reserve requirements for banks, stepping up efforts to cushion a deepening economic slowdown. The one-year lending rate will drop to 4.35% from 4.6% effective Saturday the People’s Bank of China said on its website on Friday. Reserve requirements for all banks were cut by 50 basis points, with an extra 50 basis point reduction for some institutions. The PBOC also scrapped a deposit-rate ceiling. This provided some bullish response in overnight trading for commodities helping to ease fears about China’s slowdown.
Corn continues to flounder from lackluster demand. Thursday’s weekly sales report underscored the bull’s dilemma – export sales for the week totaled a paltry 248,000 MT versus trade expectations of 450,000 to 650,000 MT, and year-to-date sales are 35% below last year, all the while USDA expects annual exports to be virtually unchanged from last year.
Oil prices firmed slightly overnight, finding support from brighter economic data and a global stock market rally after the European Central Bank signaled more stimulus. Along with China reducing its interest rate and easing monetary policies, ECB President Mario Draghi said on Thursday that new euro zone initiatives could be unveiled as soon as December to stoke the economy.
