The Grain Hedge Team provides a macro-focused daily view of the world’s grain markets. Kevin McNew received a bachelor’s degree from Oklahoma State University and his master’s and Ph.D. degrees in Economics from North Carolina State University. He spent 10 years as a Professor of Economics with the University of Maryland and Montana State University focusing on commodity markets and is widely regarded for his ability to boil-down complex economic situations into easy-to-understand concepts for applied life.
Beans Hit One-Month High
Dec 05, 2012
Soybean prices rallied overnight as lingering concerns on South America’s crop conditions and circulating rumors of Chinese export interest helped lift nearby futures to a one-month high. Soybeans were up 9 cents a bushel, while corn and wheat prices were up 3 cents in overnight trade.
Analysts at FCStone do Brasil shaved 2 percent off their estimate for Brazil's 2012/13 soybean crop, pointing to dryness in the southern producing regions as a likely cause of lower yields. Informa also lowered its estimate for Argentina's 2012/13 soybean production to 58.4 MMT, from 59.5 a month ago, citing a reduction in expected plantings. But it raised its projection for Brazil's 2012/13 soybean crop to 81.4 MMT, from 81.25 previously. Traders noted that Chinese buyers were looking for US soybeans out of the PNW market on Tuesday, but no confirmed business has been reported yet. Overheard resistance at $14.68 basis the January contract continues and the next key level of support is $14.35.
While corn moved higher overnight prices seem range bound waiting for a clearer direction. Tight domestic supplies continue to prop up prices, but demand woes keep a bearish mood over the market. Tuesday’s news of Taiwan buying a 60,000 ton corn shipment from Brazil was further proof that the US is having trouble capturing any significant business at these price levels. Overheard resistance at $7.67 basis the March contract continues and the next key level of support is $7.47
In wheat the market firmed overnight after 4 days of lower closes. The U.S. Plains are expected to remain dry through this week with some precipitation expected in eastern Colorado, Kansas, Oklahoma and Texas during the weekend. Overheard resistance at $8.76 basis the March contract continues and the next key level of support is $8.45.