Sep 16, 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 Bring Holiday Cheer

Dec 27, 2013

 Grains found modest support following Thursday’s sell-off. Corn was up 1 cent with wheat fractionally higher. Beans came back with a 7-cent advance.

The corn market got another round of negative news on Thursday when it was announced that China rejected 2,000 MT of U.S. dried distillers grains, a corn by-product.  More rejections are expected in coming weeks as Beijing imposes strict checks over an unapproved genetically-modified (GMO) strain. China, the world's top buyer of U.S. DDGs, accounted for about 40% of U.S. exports during the 2012/13 marketing season. Unlike corn, exporters fear cargoes will be difficult to switch to other destinations as the substitute for corn and meal in animal feed is not widely used in the rest of Asia. This morning's USDA export sales report was way above expectations with nearly 2 MMT sold for old-crop and new-crop combined.

For soybeans, weather continues to favor crop growth in South America. Thundershowers have been scattered across the northern half of the corn/soy areas over the past two days. Rains will continue to favor northern Brazil this week, but flooding concerns will be limited to Goias. The main showers begin to shift south this weekend, favoring central areas and providing timely rains for drier areas of Parana. In the US, spot basis continue to be on the defense, losing 7-cents a bushel for the month of December, now on par with the 3-year US average. Meanwhile corn continues to trade at about a 4-cent premium to the US average but seems destined to fall further as export woes continue.

2013 12 27

In wheat, the market has found modest support as a cold snap in the Midwest has the potential for winterkill. Some areas of central Illinois and Indiana, where snow cover is lacking, may see some damage to dormant soft red winter wheat during a cold snap early next week. But overall, temperatures are not expected to drop enough to cause winterkill in major wheat producing areas such as Kansas. Jordan's state grains buyer said on Thursday it had made no purchase in a tender to buy 100,000 MT of wheat and that it was seeking the same quantity again in a new tender.

WEEKLY EXPORT SALES (in thousand metric tons)

 

Actual

Expected

Corn

1,987.7

550-750

Soybeans

788.3

500-700

Wheat

656.9

350-550

 

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