Wheat found buying interest on Sunday as cold weather in the Plains put a premium on prices, while corn and soybeans drifted lower to start the week. In outside markets crude was modestly lower while stock futures were up going into the morning session.
Weather in Oklahoma and Kansas was colder than expected over the weekend. Extreme low temperatures down into the range of 5 to 16 degrees Fahrenheit from eastern Colorado and far western Kansas to western Nebraska might have been cold enough for permanent crop damage if wheat had reached the more advanced joint stage. Similar conditions were suspected for crops from the northern Texas Panhandle through southwestern Kansas to west-central Kansas where low temperatures were in the teens. After warming up to the 80s this week in that area, another cold spell is expected going into next weekend and some modest precip is expected in Western KS, Eastern CO and Western NE.
CFTC report on Friday showed active hedge fund buying in the past week to cover record large shorts. They were net buyers of 37K contracts of corn and wheat, and 61K contracts soybeans. This has the potential to limit buying interest going into this week with some of the pressure off of the large short positions.
In overnight news, buyers from Israel and Taiwan were in the market for corn. Brazil dockworkers were going on a strike Monday morning, demanding wage hike adjustments for inflation as the country's main commodity markets gear up for the export season. The strike will last for a full day but could extend the strike indefinitely, union President Rodnei Oliveira da Silva said.
Oil prices slid for a second day on Monday, under pressure from signs that some of the nimbler U.S. producers increased drilling last week and from uncertainty surrounding a meeting of the world's major exporters next month to discuss freezing output. U.S. energy firms last week added one oil rig after 12 weeks of cuts, according to data from industry firm Baker Hughes. Oil rigs have fallen by two-thirds over the past year to their lowest since 2009, and this surprise addition suggested the drop-off in crude drilling may be stabilizing after the oil price's 50-percent rally since February.
The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)
