What Traders are Talking About:
* China corn talk continues. An unnamed official with a state-run firm in China told both Reuters and Dow Jones newswires China will import around 4 MMT of corn -- mostly from the U.S. -- in 2011-12 (Oct.-Sept.). While China grew a record corn crop last year, pipeline supplies are snug, increasing the need for imports. The official said the level of Chinese imports will depend largely on the relationship of U.S. prices to domestic corn prices.
The long and short of it: It's unlikely China will chase the corn market higher, but look for continued Chinese demand on sharp price breaks -- from the private sector and state-run firms.
* Argentine port workers return to work -- for now. After 12 days, Argentine dockworkers have called off their strike and will return to work as union leaders negotiate with port managers. But the dockworkers could resume their strike if a resolution isn't reached over the next 10 days. While the heavy grain/soy loading season hasn't started yet, the 12-day strike reportedly halted the loading of 85 ships.
The long and short of it: Negotiations over the next 10 days will be critical as Argentina's grain/soy shipping season will be in full swing by the end of the month. If dockworkers resume their strike after that time frame, it would cause major delays and push more business to the United States.
* Fed stays the course. The Fed announced Tuesday afternoon it intends to keep interest rates near zero through at least late 2014 and gave no hint of another round of quantitative easing. While economic conditions are gradually improving, the Fed warned there are hurdles, particularly global financial strains. The Fed says the recent surge in gasoline prices is expected to cause only a "temporary" jump in inflation and expects inflation to run "at or below" its dual mandate rate. Meanwhile, results of the Fed's annual stress test showed four banks failed -- Citigroup, Ally Financial, SunTrust and MetLife -- while the other 15 big banks passed.
The long and short of it: Signs of economic improvement are basically buying the Fed some time to further gauge economic activity and delaying the "need" for further quantitative easing -- for now.
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