Markets Higher in the Overnight

Markets were broadly higher overnight after widespread weakness took its toll on commodity and financial markets on Tuesday.

Wheat had the biggest recovery posting a 7-cent advance in the night session where concerns about dry weather in Australia and the Black Sea region are mounting. There are some minor concerns in southern Ukraine where it has been too dry to consider sowing winter grain. The pace of sowing winter wheat in Ukraine is running slightly behind schedule but it is only early with typically around 20 percent of the crop planted at this point in the year. In Australia dryness is starting to push crop estimates lower there, with the crop expected to be 24-26 MMT versus 26 MMT by USDA.

In soybeans, prices traded off their lows of $8.61reaching $8.68 towards the end of the night session, but harvest pace and yield seems to be on track. Early reports from Northern Ohio suggest better than expected yields. For corn, prices were up a modest 4 cents a bushel. The last 6 weeks has seen corn locked in a narrow range of $3.60 to $3.95 and with prices currently around $3.85 it may prove difficult to break to the upside of this range until harvest is in the books.

U.S. index futures followed European shares higher, reversing earlier declines, after the Standard & Poor’s 500 Index fell to its lowest level in almost two weeks. Overnight the E-Mini S&P (ESZ5) was up 0.4 percent. However, the outlook for the global economy became bleaker on Wednesday as signs of a deeper downturn in China emerged, despite massive policy stimulus, coupled with weak growth at best in Europe. China's vast factory sector shrank at its fastest rate in 6-1/2-years in September, a private survey showed, sending investors worried about sagging global growth scurrying out of risky assets.

Crude oil futures (GCLX5 / QMX5) recovered as well on Wednesday posting a nearly 1 percent advance as a drawdown in U.S. crude oil stocks outweighed the negative impact of weak economic manufacturing data from China. The American Petroleum Institute (API) said U.S. crude stockpiles fell 3.7 million barrels last week, with stocks at the Cushing, Oklahoma, delivery point for U.S. crude futures down almost 500,000 barrels. Although total U.S. oil inventories are at record highs, the draw suggests a rebalancing of the biggest domestic oil market is under way as oil production slows in the face of low prices.

—Cody Bills