Losses in Sunday's Overnight Session

谷物started the week drifting lower, with all three grain markets posting losses in Sunday’s overnight session. In outside markets, S&P futures were higher while crude oil found positive gains as well.

In Ukraine, independent analyst UkraConsult cut the 2016 wheat crop forecast to 17.5 MMT from 19 MMT due to poor crop conditions. If realized this would be a substantial shortfall from Ukraine’s 2015 production of 27 MMT. Domestically, rains in the U.S. Midwest and the Plains are expected next week that should help winter wheat ahead of dormancy.

Meanwhile, in Brazil, a negative came late on Friday from Mato Grosso, the top soybean-producing date, where farmers have now nearly caught up with last year on plantings, getting 83.7% in the ground compared with 84.1% a year ago, according to research institute Imea. A week before, farmers had planted just 61.0%, compared with 66.9% a year before.

On Friday, Informa released their latest 2016 acreage forecasts, with the private firm forecasting 90.1 million acres of corn, off from their previous estimate of 90.8 while they pegged soybeans at 85.3 million acres, up from 83.9 previously.

In outside markets, the events in France over the weekend had little impact on global stocks. S&P futures posted modest gains overnight, trying to recover from last week’s losses. In crude oil, prices were higher in response to the geopolitical tension that surfaced over the weekend, putting a slight risk premium back into crude, which had been on its way down to $40 a barrel.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

—Cody Bills