Headlines:
- ‘Competitive’ US wheat prices rise
A spate of bargain buying lifted grain futures, apart from soybeans, which came under pressure from smaller-than-expected US processing demand. Richard Feltes, at RJ O’Brien, suggested that the market was seeing a “technical bounce on short covering”, also noting a stronger Chinese currency, and a flurry of international wheat tenders. “Markets are bouncing this morning off oversold technicals and a weaker US dollar,” said Kim Rugel at Benson Quinn Commodities. The dollar was down 0.7% as Chicago markets closed, despite a widely-anticipated hike to US interest rates late in the session.
- AGI flags ‘early signs of recovery’ in US crop storage market
Ag Growth International flagged a revival in spending by US farmers on crop storage equipment, amid some signs of recovery in the machinery market too, as the silos maker unveiled a return to the black. The Canada-based group said that “early signs of recovery in demand appear to be forming” in sales to North American farmers. In the first two months of 2017, “new orders have increased by over 30% to the prior year, and order backlogs are significantly higher than at the same time of 2016”. Ag Growth International, forecasting an, unspecified, rise in sales and underlying profits this year, added that “management is cautiously optimistic that recent activity is an indicator of a modest improvement in the North American Farm sector”.
Summary:
Soybeans were only slightly lower today while still under pressure from technical and commercial selling. The gains from early in the day were short lived as market participants took advantage of selling into initial strength. The Soybean crush numbers for February failed to meet trade estimates while at the same time export competition fears from the South American region continues to loom over the market. Soybeans futures have posted daily losses for eight consecutive trading days but may be due for an exhaustion correction. According to NOPA member firms crushed 142.792 million bushels of Soybeans last month which is down on the month and year. The crush figure was below analysts’ expectations. Corn was barely higher after reaching making a new 2 ½ month low at one of our support areas. Like Soybean, Corn is keeping an eye on the developments in South America along with pre-planting conditions. Wheat was the strongest of the batch with an advance of 5 cents. There was some weakness in the US Dollar to day which seemed act in favor of Wheat. The Fed also announced a ¼% interest rate hike and too may weigh on the greenback. There is still concern surrounding the early emerging winter crop but the supply side narrative will in all likelihood continue to bare down on Wheat futures.
