Grains Matter Chatter – Episode 230
Wednesday was another negative day for our markets. Harvest corn closed down 6 1/4, spot soybeans closed down 25, spot winter wheat closed down 3 3/4 and spot spring wheat closed down 3. In the overnight trade all of our markets remain on the negative side. Oil closed down $0.06 yesterday at $70.02 per barrel. It is weaker in trading again this morning with it now valued at $69.84 per barrel. Our dollar had a high yesterday morning of $0.698 US and then went down to $0.691 US in the afternoon. It has come back up some since then with it currently valued this morning at $0.695 US.
Soybean prices tumbled yesterday. They are currently at the lowest price for the front month on the CBOT since August of 2020. We keep talking about the new record crop that is growing in Brazil and yesterday thoughts of this just overwhelmed the market. With the supply side dominating there is nothing happening on the demand side to change the negative pattern for soybeans in the short term.
The US Federal Reserve decreased their benchmark interest rate yesterday by 0.25%. This was widely expected however they did state that further decreases next year would most likely be limited. With this comment their dollar immediately strengthened as the marketplace is thinking the US interest rates will remain higher than most other countries. As a result of this our dollar almost hit lows made back in January of 2015 before bouncing back some. This did help strengthen our local basis yesterday. Going forward we will be watching close to see if our dollar starts to trade consistently in the sub seventy cent range.
Ethanol production in the US jumped back up last week by 2.5% resulting in 1.103 million barrels per day. This increase came after a larger than expected decrease the previous week. At current production levels they would utilize 5.80 billion bushels of corn which is still well above the current USDA grind estimate.