Grains are higher at midday:
Dec Corn +3 cents/bu (5.28 ½ )
Nov Soybeans + 2 cents/bu (12.84 ¾ )
Dec Chi Wheat + 12 cents/bu (7.17 ¾ )
Cdn $ +0.00775 (79.025 cents)
WTI Crude Oil +1.06/barrel (73.29)
Wheat futures have been the strongest of the grains all morning, as multiple tenders from wheat importing countries have been issued this week, and that is being seen as supportive as it indicates very solid demand for milling wheat. Corn and beans have traded both sides of unchanged this morning, but sit solidly in positive territory during the noon hour. The combination of anticipated USA harvest pressure and ongoing concerns over how China’s Evergrande Groupe’s financial situation will play out are cited as reason for row crop price jitters.
The US Federal Reserve ended their monthly meetings yesterday with a decision to leave interest rates unchanged (basically close to zero %). The Fed deferred any decision on tapering economic stimulus to next month, at which time it wants to see that “economic progress continues broadly”. The fact that interest rates did not rise, and that no firm indication was given as to when they would was welcomed by the US equity markets, with Dow futures up 557 points @ 34,686. Conversely, the lack of an interest rate hike caused the US dollar to drop, making US traded commodities like grain futures more attractive.
This morning the USDA released it’s Weekly Export Sales Report, with sales for the week ended Thursday, September 16th falling well within the range of expectations. The ongoing terminal issues caused by damage from Hurricane Ida continue to adversely impact sales. It is starting to become concerning that weekly sales levels are beginning to significantly drag behind “same week” levels from last year. Actual sales totals are listed below, in thousands of tonnes
The jury remains out on what will happen with the debt repayment of Evergrande Groupe, which is due today. Despite the fact that the Chinese government has said that it will not directly intervene, the fact that the Chinese Communist Party pumped billions of dollars of stimulus into the market yesterday has many analysts believing that an outright collapse of the company is unlikely. However, the risk of something like that happening is still real, and a Black Swan type of event that hangs over the market.