Grains have continued to drift lower in the overnight session with corn down a penny, soybeans down three, and Chicago wheat off three.
Rains have moved through some areas of the western corn belt within the last 24 hours. Western Iowa, the Dakots, and Southeast Nebraska have all received 0.25 to 0.50 inches as the system moves east. By Saturday the system should be bringing 1.0 – 1.5 inches of rain to portions of the eastern grain belt. Harvest delays are expected as crops are reaching maturity. Monday’s crop progress report showing 12% of corn and 11% of soybeans harvested.
A positive story may be developing for the U.S. wheat market following strong domestic demand in Russia. Reuters is reporting that strong domestic demand within Russia has “priced one of the world’s leading suppliers out of export markets far earlier in the season than usual”. The major beneficiary of this is expected to be European wheat prices as they will be the primary source for end users in the Middle East. Last week we saw the first U.S. sale of wheat to Egypt in many months, signaling to traders that U.S. wheat prices may have moved low enough to compete with Europe.
Weekly ethanol figures will be out this morning. Last week’s figure showed a sharp week-over-week decline in production although this is typical during the early stages of the new marketing year. Crush margins have moved lower in recent weeks as corn future declines have slowed and the price of crude oil as eased. Crush margins remain historically very strong and weekly production has outstripped the last 4 years as we begin the 2014/15 marketing year. We continue to see ethanol facilities aggressively bidding spot and forward corn deliveries as a result of these crush margins.