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S&P Futures Up Sharply in Overnight Session

Monday saw export inspections for corn, soybeans and wheat all in line with analyst expectations.

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Corn and soybeans posted modest gains overnight but were slumping their way into the morning break, while wheat came under slight selling pressure. In outside markets, S&P futures were up sharply as crude oil also posted significant gains.

Monday saw export inspections for corn, soybeans and wheat all in line with analyst expectations. However, year-to-date exports of corn are more than 20% below last year’s total this time of year while USDA has pegged only a 13% drop in annual exports. Wheat is off 13% compared to last year versus USDA’s expected drop of 9%. Soybean exports are on par with USDA which is factoring an 8% drop.

State USDA agencies released new results on the condition of the winter wheat crop. In Kansas the winter wheat crop was pegged at 59% good-to-excellent, up from 55% in its previous monthly report. However, "spring-like conditions prompted winter wheat to break dormancy early," the USDA's Kansas crop report said, a factor that could leave the wheat vulnerable to a cold snap later on. Colorado wheat rated 45% good/ex, down from 48% at the end of January. Oklahoma wheat rated 68% good/ex, down from 74% at the end of Jan. Illinois wheat rated 58% good/ex, down from 65% at the end of Jan.

France is expected to see a drop in corn acres this spring as producers there will likely cut acres by 6% due to unattractive prices and little hope of recovery, maize producers group AGPM said on Tuesday. In 2015/16 the grain maize area in the European Union's largest producer had already fallen by 5.6 percent on the previous year to 1.58 million hectares in 2015.

Stock futures were higher this morning as were Europe and Asia on expectations that global central banks will increase stimulus to spur economic growth. New York Fed President Dudley said that he is "somewhat less confident" that inflation will reach the Fed's target as "downside risks have crept up." His comments signal the Fed may wait further before they raise interest rates again. European stocks also found support after the Eurozone Jan unemployment rate unexpectedly fell to the lowest in more than 4 years. Global stocks shrugged off the negative Chinese economic data that showed the China Feb manufacturing PMI contracted at its steepest pace in 7 years.

U.S. oil prices rose on Monday after China moved to boost its slowing economy and Saudi Arabia pledged to work with other crude producers to limit market volatility, feeding hopes the oil sell-off would end. A Reuters poll also indicated the Organization of the Petroleum Exporting Countries pumped less crude this month than in January, boosting market sentiment.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

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