The grain markets were higher to start the 1st day of February. March corn settled 3 cents higher at $6.42. March soybeans ended up settling 16 ¼ higher at $12.15 ¼. March wheat settled the day 8 ¼ higher finishing the session at 6.74 ¼.The weather forecast for South America is still calling for favorable conditions for the next couple of weeks outside of some dryness that occurs over the next couple of days in Southern Brazil.
Wheat has once again gained on corn and is now trading at a 32 1/4 cent premium to corn in the March contracts. This is significant since it has been trading in and out of a discount to corn since June which has surely affected the amount of corn being fed in the world. If wheat is no longer cheap enough to be a feed substitute the corn market may have to rally to ration demand. Much of this depends on the South American crop as the market has already priced in a high risk premium for crop damage. Obviously there has been some damage from the heat stress; the question still remains how much.
Weekly export sales will be released tomorrow morning at 7:30am. Corn sales are estimated to be between 700,000MT-950,000MT. Soybean sales are estimated to be between 350,000MT-550,000MT. Wheat sales are estimated to be between 400,000MT-600,000MT. We will release the sales in all of the EHedger morning commentaries.
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