Grains were lower overnight sinking to fresh lows on the month, while stock futures and crude oil started the day with big losses.
Overnight, Ukraine raised its grain export forecast for the 2015/16 season to around 37 MMT from 36. The increase comes from rising corn demand and expectations of a big corn crop next year. Wheat growers who suffered crop losses as a result of a severe drought last year and frost in winter would likely reseed much of the affected fields with corn. The drought has put the harvest across as much as one third of Ukrainian farmland at risk of poor yields.
In Argentina, the most important rainfall of the we
ek will occur today and Monday hitting Argentina’s driest region from eastern Cordoba through central and southern Santa Fe northeastern Buenos Aires, Uruguay and southernmost Corrientes. Rainfall in these drier areas will range from 0.80 to 2.50 inches and local totals over 4.00 inches. Two other significant rain events are slated for summer grain and oilseed crop production areas through the balance of the next two weeks. The first event occurs Friday into Sunday, Feb. 14, and the second event occurs Feb. 16 -18. If all three rain events occur as advertised corn and soybean production areas will be plenty wet and poised for good production potentials.
In outside markets, European stocks slid to fresh 16-month lows dragging down US stock futures and crude oil. Overnight, China's foreign reserves fell for a third straight month in January, as the central bank dumped dollars to defend the yuan and prevent an increase in capital outflows. China's foreign reserves fell $99.5 billion to $3.23 trillion in January, the lowest level since May 2012, central bank data showed, but higher than the median forecast of $3.20 trillion from economists surveyed in a Reuters poll. The size of the drop was second only to the $107.9 billion fall in December, the largest monthly decline on record. The central bank has intensified efforts to prop up the yuan after it staged a surprise devaluation in early August.
The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)
