Grains closed higher on Thursday:
Dec Corn + 4 ½ cents/bu (5.16 ¾ )
Nov Soybeans + 11 cents/bu (12.06 ¼ )
Dec Chi Wheat + 6 cents/bu (7.24 ¾ )
Cdn $ +0.00435 (80.85 cents)
WTI Crude Oil +0.87/barrel (81.31)
Grains enjoyed a nice bounce higher today, following a technical sell off yesterday. There were a few fundamental bullish grain stories today, but overall it was a quiet day for grain news. Grains did get support from outside strength in markets as energies, metals, and US equities were extremely strong today (Dow futures closed up 527 points @ 34,784).
Today’s price action in corn and soybeans was viewed as a recovery in oversold conditions as since the September 30th USDA Quarterly Stocks Report, December corn futures have fallen 22 cents/bu, while November soybean futures have dropped 77 cents/bu. Technically, corn, soybean, and wheat trading charts look negative, but one would expect to see some value buyers come into the market on the price break that we have seen during the month of October.
This morning, the USDA did confirm a Flash Export Sale of soybeans to and Unknown Destination (assumed to be China) for 132,000 tonnes (4.85 million bushels). In the last two days, Flash Sales for soybeans have totalled 660,000 tonnes or 24.25 million bushels.
In it’s weekly report on petroleum stocks, the Energy Information Administration confirmed that ethanol production last week reached a 13 month high @ 1,032,000 barrels per day, showing the second consecutive sharp week-on-week increase in ethanol production, as new crop corn becomes available. At the same time, despite the increase in production levels, ethanol stocks fell to a 19 week low @ 19.8 million barrels, indicating very strong demand for ethanol. New crop corn availability is allowing more ethanol plants that had been down for maintenance to come back on line.
Wheat prices got support from the strength in corn and beans, but also from rumors that China had bought French wheat. That allowed Paris wheat futures to be higher today, which underpinned all USA wheat traded futures. In other Chinese related wheat news today, China raised their domestic floor price for wheat by 1.7% in what was seen as an attempt to encourage more production as it tries to maintain levels of grain security for it’s population. China is the largest producer of wheat in the world, but consumes all that it grows and more.
Tomorrow morning, the USDA will release it’s Weekly Export Sales Report (delayed one day due to Columbus Day on Monday). Trade expectations are for similar sales volumes as we saw last week, with expectations for the report listed below (in thousands of tonnes). One would expect to see corn sales easily outpace the level sold in this week last year, but soybean sales were huge last year for this week, which will be tough to replicate:
On the day, funds were thought to have been buyers across the board, picking up an estimated 4,000 corn contracts (long 220,000), 6,000 soybean contracts (long 16,000), and 4,000 Chicago wheat contracts (short 7,000.
Locally, producers are being reminded to haul in their empty pesticide containers and seed bags at their earliest convenience. October 31st is the deadline for Clean Farms to pick up and dispose of these items from their designated pick up locations.