The grain and oilseed markets were strong Wednesday on rumors of Chinese soy purchasing and stronger outside markets. March corn closed 5 ¾ cents higher at $7.57 ¾, March soybeans 23 ½ higher at $14.73 ¾, and March wheat 3 ½ cents higher at $8.60.
In addition to the rumors of Chinese soybean purchasing overnight we also had a technical breakout above the 200 day moving average in January soybeans which may have caused more short covering.
STATS Canada released their production estimates this morning. To the market’s surprise they reduced canola and oat production when the average analyst guess was calling for an increase. On the flip side they increased wheat production more than expected and may have been the weak factor for wheat futures today.
Analyst Guesses for Weekly Export Sales (million bushels)
Corn: 300,000 – 500,000 MTs
Soybeans: 400,000 – 700,000 MTs
Wheat: 300,000 – 500,000 MTs
Source: Dow Jones Poll
Actual results will be released on Thursday at 7:30 am CST
Wet conditions in Argentina persist and more flooding is expected this week. A drier pattern is in the works for this weekend. HRW Country has rains forecasted for this weekend but amounts are not expected to be great enough to positively affect wheat. US dryness has even helped support new crop prices as December ‘13 corn tied its October high today.
Wheat and corn are both suspended in the same situation… they can’t overextend pricewise as they still need to compete in the world market. The market has already priced in the Argentine weather problems and the poor US winter wheat crop conditions, now it is up to demand to keep the rally going. It is important to note that soybean demand remains very strong with exports running ahead of schedule and no significant signs of crush demand rationing.
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