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.
Corn Drops to 3-Week Low on Poor Fundamentals
Dec 10, 2012
Click Play to Hear the Morning Grain Call
Corn continued to sink lower in the overnight session hitting a 3-week low at $7.32 on March futures. Wheat also was down 4 cents in the night session while soybeans were up 1 cent.
Weak export demand and expectations of higher ending stocks in USDA’s Supply and Demand Report Tuesday morning has corn suffering a 2-cent loss in the last three trading sessions.
Over the weekend, South Korea, the 4th biggest U.S. corn market, announced a tender to buy corn but excluded US origin based on high prices. Analysts’ average expectation is for USDA’s report on Tuesday to show a 25 mb increase in ending stocks than was last forecast in November of 647 mb. Grain Hedge analysts are expecting a higher stock estimate of 100 mb on the basis of dismal exports and subpar ethanol production so far this marketing year.
In wheat, there were some limited sales of US origin wheat over the weekend to Saudi Arabia and South Korea, but in an Iraqi tender Australia and Romania garnered that business. News from Argentina indicates they will likely see 25% lower wheat exports this year as flooding has cut their production and crop quality.
Soybean prices met selling pressure at the end of last week at key resistance of $14.96 Weather in Brazil shows a favorable outlook for beneficial moisture in the next 5 days , while rain-soaked Argentina is expected to see showers and thunderstorms early in the week delaying planting, but drier weather returns for the remainder of the week. USDA’s Supply and Demand report on Tuesday should show a sizable drop in US ending stocks with exceptionally strong export demand in the first part of the marketing year.