Market News

Outside markets fuel grain and oilseed gains

Soybeans were higher on fund and technical buying, along with spillover from the outside markets. The dollar was lower while the Dow and crude oil are up sharply after the European Union reached a debt deal. Past that – there was no real fresh news and while export shipments were good, weekly sales were lower than expected. Soybean meal and oil were higher as well, following the other commodities and shrugging off lower than expected export sales.

Corn was higher on technical and fund buying, in addition to spillover from the outside markets. However, there wasn’t much independent news for corn and commercial buying interest remains very light. Weekly export sales were below estimates and shipments were less than what’s needed weekly to meet USDA projections for the marketing year. Ethanol futures were higher. Morgan Stanley, via Dow Jones Newswires, projects 2011/12 Chinese corn exports by China at 4 million tons, up dramatically on the year due to increased feed demand. The Buenos Aires Grain Exchange reports 55% of Argentina’s corn crop is harvested, around 12% less than this time last year due to dry weather. The International Grains Council sees the 2011/12 global corn crop at 855 million tons, 3.5% above a year ago, with a record 63.8 million tons in Europe and substantial increases in South America and China.

The wheat complex was higher on technical and fund buying, along with spillover from the outside markets, especially the dollar. That said – there was no real fresh news for the complex and the overall fundamentals remain bearish. Weekly export sales were at the low end of estimates and shipments were below what’s needed to meet expectations. National Australia Bank estimates 2011/12 wheat production at 25.05 million tons, up from their last guess, but under ABARE’s most recent projection of 26.2 million tons. Ukraine reports 92% of their grain crop is harvested with the running total at 48.9 million tons.

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