Brazil
Brazil’s soybean crushing capacity over the next three years is expected to increase at nearly twice the rate of the last three years, according to Itau BBA’s Agro Consulting.
International grain trading firms operating in Brazil will vote next week on changes that could weaken an agreement to not buy soybeans from deforested areas of the Amazon rainforest.
Brazil’s amendments to its domestic policies and increasing biodiesel mandates are likely to reduce the availability of used cooking oil for export, potentially reshaping its role in the global biofuel market.
Tomm Pfitzenmaier with Summit Commodity Brokerage says grains are facing the headwind of returning strength in the U.S. dollar index and the lack of weather threats. Soybean oil losses are additionally pulling down soybeans.
Matt Bennett, AgMarket.Net, says wheat was up for a third day continuing to see short covering by managed money traders and adding war premium. However, corn could not follow with soybeans as an anchor.
The Amazon region of northern Brazil continues to suffer under the worst drought in 120 years, resulting in the lowest water level at the Port of Manaus in 122 years.
Randy Martinson, Martinson Ag, says funds continue to cover shorts in the grain markets but there are some fundamentals also helping to support the rally.
Kent Beadle, Paradigm Futures says corn continues to move higher on fund buying and tighter corn stocks from USDA’s Quarterly Stocks Report. He thinks corn could eventually take out resistance on the charts and move higher.
Grains started out mostly lower Wednesday but Darin Newsom with Barchart says they continue to see buying on the dips as funds are covering shorts and taking profits.
Kevin Duling, KD Investors, says it wasn’t the best close for the grains as the markets ran up into some chart resistance and are starting to look a little tired.