Potent Bullish Combination May Trump Overnight Trading for Grains Opening
A steady/mixed start is indicated by overnight trading but the outside markets all point higher and that is the way I think we will start. Malaysian palm oil gained 125 ringgit today while Dalian, China grain futures were higher. Crude oil and the equity markets are higher while the $ is lower, a potent bullish combination for the grains no matter how they traded overnight.
Weekly export sales were slow for wheat at 460,000 tonnes, and corn at 413,000 tonnes. Oil was in line at 5200 tonnes while meal was toward the low end of trade ideas at 130,000 tonnes. Bean sales were great at 1.457 million tones.
Tomorrow is first notice day for Nov beans and ideas on the size of the deliveries are all over the place, anywhere from 0-1000 lots. September oil stocks were reported at 2.471 billion lbs this am by the Census Bureau vs the preliminary estimate last week of 2.528 billion, which is friendly for oil. However, only 247 million lbs of bean oil were used during the month to make biodiesel fuel (methyl ester) vs 301 million lbs in August.
Beneficial rain is forecast in northern Brazil today and tomorrow, up to 1" each day. More welcome rain is forecast Sun-Mon. Southern Brazil remains too wet with up to 1.5" the last 24 hours. More rain is predicted the rest of the week in Parana, the 2nd largest Brazilian bean producing state, continuing into Monday. Rio Grande, the 3rd largest bean state in the country, will be mostly dry the rest of the week, allowing soaked fields to dry out. Argentine grain fields will be dry the next several days with isolated rain forecast in southern growing areas around Tuesday next week. More rain would be welcome in Argentina to help developing wheat and newly-planted corn and beans. Only light, isolated rain is forecast in the dry South Australian wheat areas over coming days, keeping the crop there under stress.
The US southwest winter wheat belt will remain dry today through Tuesday, allowing late planting to finish. The midwest will see continued dry harvest weather through Monday in the west and Tuesday in the east before wet weather returns to the belt, slowing harvesting once again.
Keep watching the outside markets for direction in the grains.---Vic Lespinasse
