Jul 24, 2014
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Cash Grain Insights

RSS By: Kevin McNew, AgWeb.com

Kevin McNew is President of Grain Hedge and Geograin. McNew was raised on a farm in central Oklahoma and received his bachelor’s degree from Oklahoma State University, and master’s and Ph.D. degrees in Economics from North Carolina State University. For over a decade, he was a Professor of Economics at the University of Maryland and Montana State University, focusing on commodity markets. He has received numerous academic awards for his research and outreach work, and was (and still is) widely regarded for boiling down complex economic issues into easy-to-understand concepts for applied life.

 

Corn Export Sales Surpass Trade Estimates

May 01, 2014

 Grains were lower overnight with soybeans leading the complex to the downside on a 9 cent slide. Wheat and corn had more modest losses of 3 cents a bushel in the night trade.

News from the Kansas Wheat Tour continues to point to a poor crop in the state. Day 2 of the crop tour was based in the SW part of Kansas where the drought has been the most severe, and the tour findings supported that. The Day Two average for southwestern Kansas was 30.8 bushels per acre, down from 37.1 in 2013 and a five-year average of 38.8. The tour's Day 2 figure of 30.8 is the lowest in tour records dating back through 2000.  The tour's cumulative two-day average yield is 32.8 as compared to last year's two-day cumulative tour average of 40.5. Mark Hodges of Plains Grains said that a crop tour organized by the Oklahoma Grain and Feed Association this week projected the Oklahoma wheat yield at 18.52 bushels per acre and production at 66.5 million bushels, based on 3.59 million acres harvested. Last year, USDA put the Oklahoma wheat yield at 31 bushels per acre and production at 105.4 million bushels, based on 3.4 million acres harvested.

In corn, EIA weekly ethanol production showed another decline with weekly output off 12,000 barrels per day to 898,000 barrels per day. Weekly stocks were higher by 694,000 barrels to 17.21 million. Slowing gasoline demand is putting a crimp on the ethanol market, with inventories of ethanol reaching their highest level since July. There were no major changes in the 1-5 day forecast for the Midwest with light rains seen through Friday favoring the north and east with things turning quiet for the weekend. The 6-10 day forecast looks dry early in the week with moderate to heavy rains in all areas by the middle to end of the week. Old-crop corn export sales this morning were 937,900 MT, well above trade expectations of 450,000 to 675,000.

For soybeans, prices have turned more defensive in recent sessions. First Notice Day brought larger than expected soyoil deliveries with an increase in overnight registrations. There were no strong stoppers. There were also no surprises in the monthly biodiesel report from the EIA in regards to soyoil usage. On the flip side, soymeal was the star of complex closing higher for the session while scoring new contract highs in flat price and versus the soyoil on a spread.

WEEKLY EXPORT SALES (in thousand metric tons)

 

OC Actual

OC Expected

NC Actual

NC Expected

Corn

937.9

450-675

13.8

200-500

Soybeans

-16.4

-250 - +100

78.9

250-450

Wheat

214.9

150-350

219.6

250-450

 

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