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Grains Find Support in the Overnight

Barge traffic was halted Monday on the Mississippi River north of Quincy.

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Grain markets found modest support overnight as they attempt to reverse course from their 4-day sell-off. In outside markets, the US dollar & stock index futures were lower while crude oil posted modest gains.

Yesterday, better weather and sluggish exports helped push grain prices lower. Forecasts called for rain in Russia and the US Plains which seemed to alleviate fears over winter wheat planting and germination, while wetter weather in Brazil is expected to help planting conditions for soybeans. Weekly export inspections were disappointing for corn and wheat, which came in below trader expectations going into the report. But, for soybeans, export inspections beat expectations by a wide margin coming in at 2.4 MMT versus 1.2 to 1.8 MMT expected.

In cash news, barge traffic was halted on Monday on the Mississippi river north of Quincy, IL as a towboat ran aground from low water. The closure is expected to remain in place until at least Wednesday as the U.S. Army Corps of Engineers dredges the river to deepen the waterway, a Coast Guard spokesman said. The closure halted the flow of corn and soybean barges and prevented many grain elevators north of the closure from receiving the empty barges they need to continue loading out newly harvested soybeans and corn. Spot barge freight rates on some portions of the river jumped by 50 to 100 percentage points of tariff on Monday as elevators scrambled for empty vessels, traders said.

S&P futures (ESZ5) were lower overnight as investors prepared for the peak of earnings season and awaited housing data that could feed into the Federal Reserve’s interest-rate assessment. Third quarter earnings numbers from Walmart to IBM to JP Morgan have been disappointing traders of late, which has kept a lid on the recovery in stocks.

Crude oil (GCLZ5 / QMZ5) tried to hold onto positive gains overnight but oversupply and economic woes in China continue to hamper the recovery. Comments by Iran’s oil minister, Bijan Zangeneh, that the country is likely to boost its oil production by 0.5 million barrels a day in the coming months did not help prices. Industry group the American Petroleum Institute (API) will report its stocks data later today, while the U.S. government's Energy Information Administration (EIA) will release oil inventory data on Wednesday. U.S. commercial crude oil stockpiles are expected to increase by 3.7 million barrels over last week according to a Reuters survey.

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