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Grains start the week Sharply Higher

Crude Oil surges

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Grains were sharply higher to start the week with soybeans continuing to lead the complex on double-digit gains. In outside markets, crude oil surged and equity futures were modestly higher to start the day.

Soybeans continue to be cautious over issues in Argentina as crop losses there and a sharp drop in soymeal exports from the world’s #2 supplier underpin the market. Export competitiveness continues to favor US suppliers with Brazil trading at a $22/MT premium over US export prices. One week ago that premium was only $7/MT.

In overnight news, export deals on wheat and corn were active to start the week. Taiwan Flour Millers bought 110,905 MT of US milling wheat while South Korea’s largest feed manufacturer NOFI purchased 267,000 MT of US corn. They also bought 60,000 MT of optional-origin feed wheat and 50,000 MT of soymeal. Another South Korean feed company FLC bought 65,000 MT of corn from the US.

In weather, showers are expected to be limited this week to a few spots in the eastern/ far northern Midwest late Wednesday through Friday, with heat building by late in the week. Highs peak in the 90s for much of the Midwest/South, with mid 90s reaching as far north as parts of the Dakotas/Minnesota/Missouri/southwest Illinois/Nebraska/Kansas by Friday/Saturday. 90s back to the southwest Midwest by late in the weekend and moderate further by Tuesday.

For oil, the US dollar fell on Friday following weaker than expected US jobs data has traders banking that the Fed will not raise interest rates this summer. Oil was also propped up by attacks on oil infrastructure in Nigeria, which has already sent the country's output to more than 20-year lows. So far, supply cuts like those in Nigeria or Libya, have been met by rising output in the Middle East, especially Iran, which has ramped up output since the end of international sanctions against it in January. But Iran is returning to international oil markets more quickly than expected and is quickly returning to its maximum capacity. This means that further disruptions in global supplies might not be compensated by rising Iranian output.

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