Grains recovered overnight, trying to recoup some of their losses from Tuesday’s selloff in the face of fresh supply and demand news. In outside markets, S&P futures were posting gains, while crude oil and the dollar were lower.
Tuesday’s USDA report gave traders more bearish news to digest and US production and enduring stocks came in higher than expected. Corn saw the biggest jump in stocks as carryout went to 1,760 MB versus trade expectations of 1,597 MB. Soybeans and wheat were also above expectations with soybeans at 465 MB carryout versus 436 expected and wheat at 911 MB versus 877 expected.
In international news, Egypt’s GASC is holding a tender for the second day in a row, after buying 115,000 MT of wheat from Russia and Ukraine yesterday. In weather, heavy rainfall of 5 to 8 inches returns to southern Brazil over the next 10 days (Rio Grande do Sul & Santa Catarina), while rains finally begin across eastern Brazil (Minas Gerais, Rio do Janeiro, Espírito Santo, and Bahia). Likewise, needed rains of 1 to 3 inches will fall across Ukraine and southern Russia over the next two weeks, aiding the winter wheat crop there.
Crude oil prices (GCLZ5 / QMZ5) fell on Wednesday after industry data showed an increase in U.S. stockpiles, and as U.S. output had been surprisingly resilient in the face of lower prices. U.S. crude stocks jumped by 6.3 million barrels in the week to Nov. 6 to 486.1 million barrels, data from industry group the American Petroleum Institute showed late on Tuesday, compared with analyst expectations for an increase of 1 million barrels. Traders and investors were looking ahead to data from the U.S. Energy Information Administration on Thursday, delayed by a day due to a holiday.
The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)