Grains Continue Bearish Stance
Feb 12, 2013
Overnight, corn and wheat prices continued to grind lower with nearby March corn dropping below $7 a bushel for the first time since January 10th. Wheat also pushed lower by 3 cents a bushel hile soybeans were higher on the overnight advancing 5 cents.
Weather in South America continues to be favorable as dryness in Brazil helps farmers there get a good start on harvest, while much needed moisture in Argentina should help snap the dryspell that has plagued the crop for the past month. With China on holiday for the rest of the week, export news remains quiet giving market bears little resistance in moving prices lower.
For corn, USDA gave their long-term 10-year crop forecast on Monday showing a sharply higher level of stocks for the coming marketing year. Although USDA’s data is largely based on trend assumptions (i.e., 163 bushel yield) which one could argue is unrealistic in light of extreme drought conditions in the Western Cornbelt, the lack of any significant bullish news has kept prices on the defensive. On the ethanol front, there was some hope for corn, with talk that four ethanol plants will reopen.
In wheat, today looks to bring good chances of precipitation to parts of the southern Plains. Areas of North Central Oklahoma and Kansas are looking for 2 to 4 inches of snow mixed with rain today. Since October when the crop was planted, this region has accumulated only about 1 to 2 inches of precipitation versus a normal level of 9 inches during this time of year.