Grains Continue Their Gravity Defying Moves

Grains were higher in the night-session with soybeans continuing their gravity-defying move to new heights. In outside markets, crude oil was lower while the US dollar and equity futures were firmly higher to start the day.

Yesterday’s USDA report provided little new fundamental guidance with USDA lowering US soybean carryout slightly and moving corn carry out higher. Soybeans initially sold off after the report but recovered sharply by the close of trade yesterday, and added to the gains overnight. New-crop Nov soybeans got close to $9.60 a bushel overnight before breaking lower.

In South America, Argentine rains (.50 to 1.5”, locally 2.5”) fell across much of the belt in the past 24 hours, with heavier amounts confined to the northern fringes of the belt. Another extensive rain event this weekend will keep harvest progress very slow, with any recovery not likely until a drier pattern sets in during the 11 to 15 day. Heavy rains are limited to the northeast 1/4 of the belt, where localized flooding is possible. This has helped fuel the soybean rally has the continued strength in the Brazilian Real, although the US dollar is sharply higher this morning bouncing off of recent lows.

Grain Hedge Technical Alerts call for a move to May Soybeans of $9.53.Click here to get a 14-day trial of Technical Alerts

In crude oil, API data released yesterday took some of the steam out of the crude market, as the private forecasting group pegged crude stocks up 6.2 million barrel while analysts on average expected only a 1 million barrel build. Crude had also been higher yesterday because of a rumored deal between Saudi Arabia and Russia reached a deal to freeze output ahead of the formal meeting in Quatar this weekend. The deal was supposedly not tied to Iran’s actions of joining the group on freezing output. Today at 9:30 am CDT EIA will release official inventory data, with analysts looking for a 1.85 million barrel build.

Grain Hedge Technical Alerts call for a move to May Crude Oil of $40.32.Click here to get a 14-day trial of Technical Alerts

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—Kevin McNew