Headlines:
- Brazil has cut interest rates 25 basis points for the first time 4 years, which should devalue the real against the dollar
- EU farmers to stick by wheat for 2017, even after this year’s poor crop
European Union farmers will stick with similar sowings of soft wheat for the 2017 harvest, despite the bloc’s disappointing result this year, Strategie Grains said, cutting again its estimate for the latest crop. The influential analysis group, in its first forecast for EU soft wheat plantings ahead of next year’s harvest, said it expected area to remain stable, forecasting little change either in seedings of winter barley. While grain seedings in the EU – the world’s top wheat producer – will fall a little, by some 300,000 hectares to 56.6m hectares, the decline will be borne by durum wheat and spring barley, Strategie Grains said. While stopping short of giving detailed area forecasts, it estimated at 6% the decline in durum sowings, from the 2.5m hectares seeded for the latest harvest, while seeing spring barley plantings drop 1.5%.
Summary:
The US Dollar is trading at levels last seen in early March of last year and looks to continue to rise is the near future. The high of the day was 98.404, and if it is able to maintain its strength it could very well make its way to the price range of 99.70 to 100.17. The USD Index sprang from what was looking like a 6 day consolidation after having made a significant advance over the course of the previous 2-3 weeks. The USD rise today has perhaps put a bit of pressure on the grains.
Export sales for the 2016-2017 marketing year for Wheat were strong, just topping trade estimates at 513.8k metric tons. The trade estimates ranged from 350k to 500k metric tons. It also appears that the CME Group is responding to the lack of volatility in the Wheat complex by dropping its price limit from 35 to 30 cents. Corn export sales for the same marketing year were essentially in line with expectations with trade estimates ranging from 700k to 1M metric tons. The sales number was at 1.02M metric tons. The 2016-2017 Soybean sales were particularly strong. Trade estimates were from 1M to 1.3M metric tons. Beans export sales figure for the 2016-2017 marking year was 2.01M metric tons.
The implied demand that we saw from export sales report was not enough to keep the grain markets from turning lower today. Profit taking and a lack of buyers stepping up were perhaps the culprit for the softness in prices today. December and March Corn dropped 6.75 today. November and January Beans each gave up 5.25. December Wheat rounded out the day losing 4.50.
