Grains were modestly weaker overnight, while outside markets for the S&P and crude oil were modestly higher following Monday’s sell-off.
In weather, showers exited southeast Buenos Aires, northeast Cordoba, northern Santa Fe, northern Entre Rios, and minor production areas in northeast Argentina in the past day, with additional showers late Wednesday into Friday and next Wednesday/Thursday. While each of these events has the chance to reach up to 1/2 of the corn/soy, the best rain chances are likely to remain in northern/western areas. As a result, dryness concerns (focused on 20 to 25% of corn/soy) in central Cordoba and bordering sections of Santa Fe as well as central/northeast Buenos Aires should continue and potentially threaten minor reductions in yield potential, although heat has subsided.
China imported a record volume of corn and corn substitutes, including distillers' dried grains (DDGS) and sorghum, in 2015 driven by cheap overseas prices, but imports this year could fall by more than 50 percent, traders and analysts said. China shipped in a record 6.82 MMT of distillers' dried grains (DDGS) in 2015, a rise of 26 percent from the year before, official customs data showed on Tuesday, as feed mills replaced expensive domestic corn with the cheaper dried grains. However, DDGS imports to China, the world's top buyer of the grain, a by-product of corn-based ethanol, are expected to decrease by more than 50 percent this year. If so, this could have important implications for US DDGS and resulting ethanol margins, as China accounts for half of all US DDGS exports.
Outside markets were relatively stable following Monday’s sell-off in crude oil and stocks. The Federal Reserve's two-day policy meeting begins later in the day. Investors will be parsing the U.S central bank's message to determine what, if any, effect volatile global markets, plummeting oil prices and heightened fears of a Chinese slowdown will have on the Fed's previously stated intentions to continue raising rates this year.
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