Grains were weaker overnight but seemed to finding some pullback heading into the morning break. Meanwhile, crude oil continues to hit fresh highs on this rally, posting a $1 a barrel gains going into the day while equity futures were sharply lower.
On Tuesday, South Africa was said to expect a 7.054 million tonnes of maize crop in 2016, 29.1 percent less than the 9.95 million tonnes reaped last year because of a drought and late plantings. The forecast harvest, which the Crop Estimates Committee (CEC) said would be the smallest crop since 2007, is 5.3 percent above market expectations of 6.7 million tonnes, according to a Reuters' poll of traders.
Also on Tuesday, Brazil has given grain trading companies an initial quota of 100,000 tonnes of tariff-free corn on purchases outside of the Mercosur trade bloc, the trade ministry stated in the official gazette on Tuesday. However, Brazil food processor BRF says it has imported corn from Mercosur countries and does not expect to import from outside countries.
Rains were heavy across the Southern Midwest yesterday bringing 1 to 3 inches of rain. The Central and Southern Plains continue to see rains as well. In South America, Argentina was dry in the past 18 hours while Brazil continued to see good rain coverage helping aid dry soils there.
In crude oil, API stocks data on Tuesday showed a drop in crude stockpiles of 1.07 million barrels on the week, while traders had been expecting a 0.8 million barrel build. Official government data from EIA will be released at 9:30 am CDT today and is expected to show a 2.366 million barrel build.
The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)
