Grains were mixed overnight as soybeans continued to add to its latest rally while corn and wheat were slightly lower. In outside markets, S&P futures held above the critical 2,100 benchmark after closing above it for the first time in a month. Crude oil continued to lose ground in the overnight session.
Soybeans have added nearly 30 cents a bushel in the past week following last Monday’s key reversal. Short-covering continues to be the dominant drivers as technical based fund traders’ move to the sidelines. The latest CFTC report showed a near-record net short position by fund traders. Brazil’s soy plantings are near 80% completed vs 70% last week and an 89% average.
Corn continues to be mostly flat although technical indicators are starting to turn higher. Monday’s bullish outside day reversal for March corn is a positive note. This sets up a test of downtrend resistance at 376 today and with underlying support at 367.
In wheat, prices continue to search for a bottom as delivery pressure on Chicago wheat continues to widen spreads. On Friday, Stats Canada is expected to bump their wheat crop forecast to 26.7 MMT versus 26.1 MMT previously.
Crude oil futures (GCLF6 / QMF6) continued to be pressured overnight. Russia’s oil production is at a post-Soviet record of 10.78 million barrels per day (bpd) in November despite low oil prices, Energy Ministry data showed on Wednesday. Data from the American Petroleum Institute (API) showed a 1.6 million-barrel rise in U.S. crude inventories last week to 489.9 million barrels. The U.S. government's Energy Information Administration's inventory report will be published this morning.
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