Market News

Wheat, corn finish higher after sluggish start

Soybean futures started the day lower on Friday after some pretty bearish September CPI numbers.  But, like the other commodities soybeans were able to finish the day from about steady to mostly higher.  One supportive factor was the back-to-back days of soybean sales to China (there was also a second announced soybean sale, that was marked for unknown destinations).  Ending stocks numbers for U.S. soybeans are extremely tight, but a solid crop out of South America could put some additional pressure on the markets.  There has been adequate moisture in parts of Brazil as planting continues in that part of the world.

Corn futures ended the day higher outside market support beating out the negative inflation data.  The U.S dollar was weaker on Thursday and the Dow Jones had a solid day.  The Energy Information Administration reported a rise in ethanol production for the second straight week.  The 932,000 barrels were up 36,000 per day from the previous week.  Weekly production is still about 10% behind year-ago levels.  Export sales for corn are still running about 50% behind than last year at this time.  The trade continues to watch U.S. harvest activity, in addition to planting in Argentina and Brazil. Interior movement in the U.S. is an issue in some areas because of low river levels, while concerns about a railroad strike are resurfacing, which would also impair movement.

Wheat futures continued its volatile trade.  Like corn and soybeans, markets opened lower following the inflation data, but rebounded quickly finding strength in the ongoing drama between Russia and Ukraine.  The latest is that Russia has threatened to impose more restrictions on the Ukraine safe passage deal.  And disruptions to exports out of that region would tighten supplies and likely send prices higher.  The drop in the US dollar index was also supportive to prices.  The trade is also monitoring U.S. winter wheat planting. Recent rainfall in the Plains should help hard red winter, but it wasn’t enough to break the drought and the big test for conditions will be when the crop emerges from dormancy next spring. Soft red winter continues to look at generally comparatively good planting conditions.