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Corn and Soybean Prices Drift Lower in the Overnight

In outside markets, S&P futures and crude oil continued to extend their recent losses.

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Corn and soybean prices drifted lower in overnight trade, while wheat posted modest gains. In outside markets, S&P futures and crude oil continued to extend their recent losses.

Farm office FranceAgriMer on Thursday raised its monthly estimate of French total soft wheat stocks this season to 5.2 MMT, up from 4.8 million forecast last month. FranceAgriMer left unchanged its forecast of French soft wheat exports outside the European Union in 2015/16 to 11.5 MMT, above the 11.4 million shipped last season.

In Ukraine, rains have been somewhat beneficial, but analysts there are still pointing to significant shortfalls in the winter wheat crop. Just on planted area alone, acres are expected to be lower and as of Nov 9 only 59% of the crop has been planted versus 88% this time last year. UkrAgroConsult pegs the 2016 wheat harvest at 19 MMT while Thomson Reuters’ Lanworth group predicts 24.3 MMT. Ukraine’s state weather agency implies a harvest around 21 to 22 MMT. This compares to a 27 MMT crop in 2015.

In China, USDA’s attaché says lower corn usage there is the culprit for higher stocks in China. China has had a massive surge of imported sorghum, barley, and DDGS. Combined imports of these three commodities reached 25.6 million tons in MY2014/15 as feed mills searched for alternatives to high priced domestic corn. The attaché raised the MY2015/16 forecast for ending stocks by over 26 MMT to 117 MMT.

S&P futures (ESZ5) were lower trading at 2060, off of recent highs at the 2,100 mark. Today Fed Chairwoman Janet Yellen as well as Vice Chairman Stanley Fischer and regional Fed presidents William Dudley, Charles Evans and Jeffrey Lacker will all be giving speeches as traders look for clues on an interest rate hike in December.

In crude oil (GCLZ5 / QMZ5), traders will look to EIA’s latest report today for guidance. Market surveys project that crude oil stocks could rise by 1.3 million barrels for the week. In contrast, gasoline and distillates stocks are expected to fall by 0.81 and 0.91 million barrels, respectively. The tug of war between rising crude oil stocks and the falling refined products inventory could swing crude oil prices in either direction.

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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