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Grains were Higher in the Overnight

Crude oil prices hit seven year lows on Friday

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Grains were higher in overnight trade with soybeans leading the advance on a 3 cent gain while corn and wheat posted fractional improvements. In outside markets, the US dollar was lower as was the S&P futures and crude oil sunk to new lows.

South America’s weather continued to be wet. Rains remain most notable from Parana into Rio Grande do Sul this month, keeping moisture surpluses in place for at least the southern 1/3 of corn/soy. Flooding risks are not severe, but pockets of excess moisture are possible in western RGDS. Soy rust risks will also remain elevated. While the showers to the north will remain more limited overall, regular rounds of scattered showers are expected to keep current stress (10% of summer corn and 15 to 20% of soy/rice) from expanding, and some reduction is even suggested by models in the 6 to 15 day. However, the shower chances this weekend and again early in the 6 to 10 day will need to be watched to ensure that rains do not falter in key central Mato Grosso soy areas, where a few spots have still missed rain in recent days. Other than a spotty shower in central Cordoba, Argentina was dry yesterday. However, showers from Saturday to Monday favor 2/3 of corn/soy, with multiple significant storm chances in the 6 to 15 day as well to provide plenty of moisture.

Conab pegged the Brazil soy crop at 102.5 MMT versus a previous estimate of 102 while corn was at 82 versus 81.9 MMT last week.

Crude oil prices hit fresh seven-year lows on Friday as the International Energy Agency (IEA) warned global oversupply could worsen in the new year. Consumption is likely to have peaked in the third quarter and demand growth is expected to slow to a still-healthy 1.2 million bpd in 2016, as support from sharply falling oil prices begins to fade," the IEA said in its monthly report.

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