Sep 17, 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 Exports Beat Expectations Again

Feb 06, 2014

 Grains held on to gains across the board in the night session, as prices continue to try to move higher on strong demand. Beans were up 3, corn gained 2 and wheat posted a 1-cent gain in the overnight trade.

For beans, traders are looking for only modest changes to South American production in Monday’s USDA report. Average trade estimate for Argentine soybeans is 54.13 MMT vs USDA Jan estimate of 54.5 MMT and Brazilian soybeans is projected to come in at 89.76 MMT as compared to the January USDA estimate of 89.0 MMT. World soybean ending stocks are expect to inch higher to 72.67 MMT versus 72.33 MMT by USDA in January. On Wednesday, soybean bids faded by 5 cents at a processor in Lafayette, Indiana, but basis was mostly unchanged as snowfall brought movement to a halt and farmers returned to the sidelines after selling big on Tuesday.

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In corn, prices continue to build support above the $4.40 level as expanding export business helps lift prices. On Wednesday, Ethanol production was off 5,000 BPD, averaging 895,000 BPD during the week ending 1/31/14. DDG prices have improved week over week, but ethanol margins continue to slide lower as corn futures have increased 8% since the January 10th USDA report and ethanol prices in Iowa are down 30 cents per gallon during the same time period. Given higher corn and lower ethanol prices, ethanol plants are likely to use basis as a tool to preserve margins in the spot corn market. One example of this was Cargill in Blair, NE which has steadily lowered basis over the last week, now 8 cents below the board.

Japan's Ministry of Agriculture bought 50,310 MT of Hard Red Winter and 82,454 MT of Dark Northern Spring grades from the United States, as well as 99,522 MT of late June-arrival Canadian Western Red Spring wheat. Japan typically buys about 20,000-30,000 MT each of the five grades of food quality wheat from the U.S., Canada and Australia in tenders typically issued three times a month. But, Canada’s shipping problems led to more supplies being garnered from the US. Also overnight, Oman bought a 20,000 MT shipment of wheat from India. Indian state trading companies have been holding a series of international tenders to sell part of India’s huge wheat stocks, generating cheap supplies for Middle Eastern buyers.

WEEKLY EXPORT SALES (in thousand metric tons)

 

Actual

Expected

Corn

1,700

900-1,200

Soybeans

796.5

550-850

Wheat

733.6

500-750

 

 

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