Kevin McNew and Cody Bills
The Grain Hedge Team provides a macro-focused daily view of the world’s grain markets. Kevin McNew, President of Grain Hedge and GeoGrain, 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. Cody Bills received his Business Administration degree, concentrating on finance, from the University of Vermont. Beginning his career as an analyst for a local investment firm, Cody’s insight and understanding of the grain markets has led to national publication as well as an invitation to host Grain TV daily and be a regular guest on AgWeb Radio.
Beans Get Bearish on China Cancellations
Nov 16, 2012
Click the play button below to hear the morning grain call
Beans were down 20 cents in the overnight session following an announcement that China had cancelled 600,000 tonnes of export bookings from the United States. Poor crush margins in China are forcing their domestic crush industry to idle some production capacity, with reports suggesting some plants are running at 50% of their normal capacity.
Soybean futures are off 20 cents this morning, with the benchmark January 13 contracts trading around $13.80 printing their lowest level in over 4 months. Critical support sits around $13.70 which would test the long-term uptrend that has been intact for over a year.
Adding fuel to the fire, Argentina gave their first soybean area estimate of the 2012/13 season. The Agriculture Ministry said 19.4 million hectares will be sown in the weeks ahead versus 18.7 million hectares in 2011/12. However, this is below the 12% expected acreage increase that USDA has pegged in their latest WASDE report.
In the corn market, new was mostly quiet overnight but prices slipped 5 cents lower following beans. High corn prices are finally starting to show a reduction in key livestock numbers, with weekly broiler chick placements showing a 3% drop in placements.
Wheat markets were 3 to 4 lower in quiet trade. News out of the EU showed strong export business, with the EU announcing weekly export licenses of 696,000 tonnes of Soft Wheat bringing their total to the year of 6.5 MMT.