Headlines:
- THE FEDERAL RESERVE WILL KEEP INTEREST RATES UNCHANGED FOR NOW, ACCORDING TO A STATEMENT FROM THE FEDERAL OPEN MARKET COMMITTEE AT ITS ANNUAL TWO–DAY POLICY MEETING.
- WHEAT QUALITY WORRIES EXTEND TO CHINA, SUPPORTING AUSTRALIA EXPORT HOPES
The Egyptian government U-turned on its zero-tolerance policy on ergot contamination in wheat, after three failed tenders. Egypt, the world’s top wheat importer, re-instituted a zero tolerance policy on ergot, a grain fungus, last month. French wheat futures trimmed losses on the prospect of renewed demand. The re-emergence of the controversial policy, which disrupted Egyptian exports in the previous marketing year, led to a mass boycott of government tenders by sellers, who feared being left bearing the cost of rejected cargos. The difficulty of sourcing wheat appears to have forced the hand of the Egyptian government, which will reinstate a 0.05% tolerance level for ergot, in line with international standards. From now on an international firm will be contracted conduct ergot inspections on wheat shipments, the government said, in what appears to a bid to mollify grain sellers. The retroactive application of the ban has led to the suspension of 540,000 tonnes of wheat shipments to Egypt, the government said
Summary:
The 4 day rally in Soybean futures came to a grinding halt today when reports of an increase in harvest yield began to circulate across the trade. There had been widespread concern that the recent wetness would cause delays in the harvest and reported increase demand was also helping to give Bean prices a lift. The USDA reported some 364 metric tons of Beans were sold in its daily sales report but that was not enough to stave off a big selloff today. When producers were finally able to get into the fields they discovered that yields were looking to be just as large as projected. November Beans finished the day down 14.75 cent. Today’s trading range was inside of yesterday’s range so if we break and close below Tuesday’s low tomorrow then a solid sell signal will have triggered.
Corn also posted a trading range inside of the previous day’s range. When the dust settled the December contract finished off only off by 1.50 cents. After being up 4 days and getting close to resistance, investors & producers saw the opportunity to take some profits realizing that prices may not get much higher.
Wheat futures rounded out the day with a small trading range similar to Corn. It managed to finish with a small ½ cent gain and continues on the sideways to up trajectory that we have been calling for. Tuesday of next week looks to be a potential turn date for the December contract. It is approaching being oversold so its movement over the next 3-4 trading days may be very telling.
