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Grains Start the Week on a Down Note

In wheat news, France is set to export wheat to Indonesia for the first time since the 2008/09 marketing season

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Grains started the week on a down note, with soybeans leading the sell-off to the downside while wheat and corn were slightly lower in quiet trade. In outside markets, S&P futures and crude oil were off slightly from Friday’s close.

Soybeans came under pressure as Argentina’s presidential election results. Conservative challenger Mauricio Macri turned Argentine politics on its head on Sunday, kicking the ruling Peronist movement out of power with a promise to liberalize the ailing economy and end a culture of divisive politics. For grains, this would mean an elimination of stiff export taxes and quotas that have restrained the country’s ability to ship to world markets.

In wheat news, France is set to export wheat to Indonesia for the first time since the 2008/09 marketing season after private animal-feed companies were attracted by unusually competitive French prices. Exporters have turned to French wheat to cover optional-origin deals after Ukrainian supply became less readily available and in view of relatively expensive prices for Australian wheat. French shipments have become cheaper due to a weaker euro and a slide in ocean freight rates, while exporters are keen to find overseas outlets for a record-large French wheat harvest after a slow start to the export season.

In crude oil (GCLF6 / QMF6), prices were off sharply on Sunday’s open, but recovered this morning as Saudi Arabia's cabinet said on Monday it was ready to cooperate with OPEC and non-OPEC countries to achieve market stability. The council (of ministers) ... stressed the kingdom's role in (achieving) the stability of the oil market and its continuous readiness and efforts to cooperate with all OPEC and non-OPEC countries to maintain the stability of the market and prices," the cabinet said in a statement following its weekly meeting.

S&P index futures (ESZ5) were little changed on Monday, coming off strong gains last week, with the S&P 500 posting its biggest gains in almost a year and the Dow Jones industrial average turning positive for the year. The U.S. Federal Reserve is widely expected to raise interest rates next month as labor conditions continue to improve and inflation stabilizes. Geopolitical security issues also weighed on investors' minds with a lockdown in Brussels continuing for a third day as police hunt for a suspected Islamist militant on the run since the Nov. 13 attacks in Paris.

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