London, January 28, 2015 - The two main derivatives markets for grains (corn and wheat) and oilseeds (soybeans and rapeseed complex) traded lower across products today. Malaysian Palm oil futures closed 32 higher at 2,210 ringgits. This move can only technical only since demand for palm oil is weakening at the moment.
Traders in Chicago expect markets to trade 1-2 cents lower in corn, 2-4 cents lower in soybeans and 4-6 cents lower in wheat on the opening.
Yesterday in Chicago, funds were reported to have done the following: sold 3,000 soybeans, 2,000 corn, 500 soyoil and 800 soymeal and flat in wheat. Market fundamentals and technicals are now all showing bearish signals.
The March Chicago wheat contract is now trading below the $5.20 support meanwhile the Kansas City March wheat contract made another contract low of $5.44 overnight. Taiwan is tendering for 86,280 MT US milling wheat. The bullish sentiment may now come from US weather, where traders begin to worry about warmer temperatures and its impact on the winter wheat.
On the fundamental side, the US authorities have approved Argentina proposal to qualify for biofuel credits, this will be adding supply and competition to the US market. In the meantime Ukrainian corn is currently competing with US corn exports. There is no bullish news to offset these fundamentals, even though no major announcement for cancellations were announced from China. Chinese state corn reserves are now expected to reach 120 MMT, which would be record levels.
On the macro side, the FOMC meeting minutes are expected to be released today.