China Relaxes DDG Imports
Jan 08, 2014
Wheat was a leader to the upside gaining 3 cents in the overnight session with corn posting a modest 1-cent advance. Soybeans failed to follow, giving up 2 cents in the night trade.
In corn, a bit of bright news finally came from China when it was reported that Chinese DDG inspections have improved in recent days. Last week, there was 20-25 percent of imported DDGs passing the customs inspection and the passing rate has increased to 40-50 percent this week. China accounted for 40% of US DDG business in the 2012/13 marketing year. Domestically, DDG prices in Iowa dropped $40 per ton (18.4%) between the weeks of 12/19/13 and 1/3/14 following recent DDG rejections. In turn, this pushed ethanol margins down by 41 cents a bushel, but they still remain well above last year’s levels. Estimates ahead of Friday’s USDA reports show analysts look for 14.07 BB of production versus 13.99 previously and ending stocks of 1,861 MB as compared to 1,792 MB last month
In soybeans, even a large sales to China Tuesday morning did little to spur market sentiment. Tuesday, USDA announced the sale of 350,000 MT to China with another 5 or 6 cargos rumored to have traded over the course of the day. Domestically, basis levels for beans and corn have been on the incline with slow farmer sales crimping the pipeline. Analysts look for Friday’s USDA reports to show 3.279 BB of US production as compared to 3.258 BB and 149 MB of ending stocks versus 150 MB last month
For wheat, Iraq’s state grains board has issued an international tender to buy at least 50,000 MT of wheat to be sourced either from the United States, Canada or Australia. The tender closes on Jan 19 and offers must remain valid up to Jan. 23, traders said. In its previous tender reported on Dec. 19, Iraq's state grain board purchased 350,000 MT of wheat all of Australian origin. India's State Trading Corp continues to push wheat to the global market, selling 160,000 MT at $282.62 per ton way above a floor price of $260 per ton.