Grains traded sideways to lower overnight, with corn down 2 cents, soybeans off 3 cents, and wheat trading a penny lower. November soybeans were trending lower before finding some strength on concerns about Argentine exports in the new crop year.
Argentina defaulted for the second time in twelve years last night, as the country was unable to resolve a legal battle with creditors following their last default in 2001. Standard and Poor’s labeled Argentina in default on some of their debt obligations early this morning and the move will impact the countries borrowing costs moving forward. As far as grain markets are concerned, inflation in the country is the largest issue as the Argentine Peso continues to devalue with respect to the Dollar. Argentine producers have been hoarding grain in recent months as an inflation hedge and this will only further inflame the issue. For the year inflation is expected to hit 40% in the country.
Export sales this morning were very strong for wheat, which reported sales of 801,000 metric tons up 81 percent from the week before. The large buyers included Nigeria, Panama and Brazil. Old crop corn sales slipped 40 percent from the week before reporting 173,000 metric tons sold which was also well below analyst expectations of 300,000 to 450,000 metric tons. New crop sales beat analyst expectations with 1,093,200 metric tons. Nearly half of the new crop sales were two Mexico. Old crop soybean sales were strong again with 187,400 metric tons which was on the high side of analyst expectations. New crop soybean sales were also strong booking 1,268,700 metric tons which beat analyst expectations. Soymeal reported strong export sales with both old and new crop on the high side of analyst expectations.
Overnight the southern plains received much needed precipitation with Northern Texas, Oklahoma, Kansas all receiving rain. Dryness remains a concern in Eastern Nebraska and Western Iowa as the soybean crop enters pod fill. Cool temperatures of limited loss in dry areas as temperatures across the entire grain belt remain below average. The 6-10 day outlook does look more promising for seeing above average precipitation in areas that need it most.