Grains Mixed in the Overnight

Published on: 13:58PM Oct 01, 2015

Grains were mixed overnight with wheat up 3 and soybeans up 2, but corn traded fractionally lower. Outside markets were higher for crude oil, gaining $0.85 a barrel or 1.9 percent while S&P Futures were marginally higher on a 0.13 percent improvement.

Yesterday’s quarterly grain stocks report had little follow through impact on market prices as inventory levels were mostly on par with expectations. The most bullish of the numbers was for wheat stock levels thanks to lower than expected spring wheat production. Wheat stocks on hand as of Sept 1 were 2,089 MB versus trade expectations of 2,149 MB. Soybeans were also lighter than expected with old-crop carryout pegged at 191 MB as compared to 205 MB. Corn was mostly on the mark as stocks were estimated to be 1,731 MB versus 1,739 MB.

Overall the report figures were deemed neutral by the trade and market participants will go back to watching crop harvest reports from the fields. So far, it would appear yields are coming in better than expected especially for soybeans. Merchants in IN & IL are saying soy yields from farmers are coming in very good and in most cases surpassing last year’s yield and in some instances reaching all-time highs.

In demand news, weekly ethanol output reported on Wednesday was up 5,000 BPD to 943,000 BPD. Overnight export news was relatively quiet with only Japan showing any noted interest in US commodities, by making a regular purchase of 128,489 MT of wheat to be sourced from the US, Canada and Australia. Weekly export sales reported this morning by USDA were better than expected for soybeans, on par with expectations for corn and worse than expected for wheat.


USDA WEEKLY EXPORT SALES (in thousand MT)

 

Weekly Value

Pre-Report Estimates

Corn

748.2

700-900

Soybeans

2,506

1,300-1,700

Wheat

77.1

250-450

 

In equity markets, S&P futures (ESZ5) were up nearly 1 percent in early night trade but retreated by the end of the overnight session to only a 0.2 percent gain. Equity markets on Wednesday recovered some of their losses improving about 1.5 percent on the day but closed out the third quarter of the year with its worst quarterly performance in four years. Despite the gains, the major indexes are still set to post steep losses for the quarter with the Dow down 8.9 percent for the third quarter in its worst performance since the third quarter of 2011 when the blue-chip index tumbled 12.1 percent. The rally on Wednesday was helped by encouraging news about the labor market. Businesses added 200,000 private sector jobs in September, according to a report by payroll processor ADP.

For crude oil (GCLX5 / QMX5), prices were up sharply as sentiment was boosted by a modest improvement in economic data out of China. China’s official purchasing manager’s index, a gauge of nationwide manufacturing activity, ticked up slightly last month to 49.8 from 49.7 in August, beating analysts’ expectations. Markets were also tracking the developments in Syria, where Russia launched its first airstrikes on Wednesday. The intervention added to the uncertainty in the Middle East, the world’s biggest oil producing region.