Grains were listless overnight with little directional bias in the market. In outside markets, S&P futures recovered some of the losses from Tuesday, while crude oil printed its lowest price since October 2nd.
On Tuesday, corn reached a 5-week low at $3.72, but has since managed to move slightly higher as prices look to stabilize from a spat of selling. Harvest pressure seems to be limiting any prolonged rally and the lack of significant demand in the export market seems to be putting a lid on the rallies.
Some dryness issues in Ukraine & Russia are helping underpin the market as well. Ukraine’s ag minster on Tuesday said wheat acres there are likely to fall to 5.5 million hectares versus 6.2 that were previously expected as a result of dry conditions. In Russia, farmers have delayed winter grain sowing due to dry weather, analysts and traders said on Tuesday, signaling higher risks for next year's crop in one of the world's key wheat exporters. A lack of rain has been reported since September by some of Russia's southern regions, the main areas for wheat exports to North Africa and the Middle East.
S&P futures (ESZ5) were modestly higher and reached their highest point since Aug 20. Earnings data for Q3 has turned out better than expected so far. Some 32 S&P 500 companies are due to post results today. Of those that have reported so far, 43 percent have beaten sales estimates while 74 percent have beaten earnings targets.
Oil (GCLZ5 / QMZ5) prices fell on Wednesday following a big build in U.S. crude inventories that fed concerns demand may not be enough to absorb one of the largest global surpluses in modern times. The American Petroleum Institute reported on Tuesday a rise in U.S. commercial crude stocks of 7.1 million barrels to 473 million barrels in the week to Oct. 16, trumping expectations for an increase of 3.9 million barrels.
