Grains were modestly lower in the night trade with corn and soybeans off 2 cents a bushel, and wheat down 3. In other markets, S&P futures were up 0.4% while crude oil was up 1%.
Soybeans were hard hit in yesterday’s trade as news continues to be bearish from US harvest. Merchants continue to report bean yields are better than last year by 5 to 10 bushels per acre, and as yields grow, farmers are becoming more willing to make cash sales. Yesterday, FC Stone pegged the soybean crop at 3.919 BB, above their Sept outlook of 3.791 BB, but still below USDA’s Sept projection of 3.935 BB. For corn, they put the crop at 13.541 BB versus last month’s forecast of 13.457 BB and USDA’s 13.585 BB.
In international news, wheat has been moving higher thanks to dryness in Australia and Russia. However, US export business in wheat continues to disappoint with Thursday’s announcement of only 77,000 MT of wheat sales for the week compared to 250-450,000 MT expected. In South America, one private crop watcher estimates Brazil 2016 soybean crop closer to 99 MMT vs USDA of 97 MMT and Argentina closer to 60 MMT vs USDA at 57.
In stock futures, trading was higher overnight after a lower close on Thursday. Trading has been unpredictable so far this week ahead of this morning’s release of the jobs report for September. This release has taken on even more significance as Wall Street looks for signs U.S. economic strength is still intact after the Federal Reserve’s decision to keep interest rates unchanged in September. Economists expect 200,000 jobs to have been added to nonfarm payrolls in September, up from 173,000 in August. The unemployment rate is forecast to remain steady at 5.1%, while year-over-year growth in average hourly earnings expected to climb to 2.4% from 2.2%.
Oil found strength this morning from ongoing fears about the escalating violence in Syria and expectations of strong economic growth domestically. The oil market was factoring in a risk premium over Syria, where Russia and the US are conducting bombing campaigns. The situation was complicated by the arrival of hundreds of Iranian troops in Syria to join a ground offensive in support of government forces, a sign the civil war is turning still more regional and global in scope. Oil is also being supported by economic optimism ahead of US data that is expected to show the creation of more than 200,000 jobs in September.