Egypt Demand Spurs Wheat Higher
Jan 10, 2013
Wheat led the grains higher overnight as new demand from Egypt’s GASC helped lift wheat prices by 7 cents. Corn was up 4 cents, while soybeans were up 1 cent on the overnight trade.
Egypt’s GASC announced a tender for a 115,000 tons of wheat. Most expect the US to get the lion’s share of the deal after US wheat prices have come down in recent weeks and are more competitive than most key foreign sellers. Wheat also was bolstered by news of the drought in the Plains. USDA on Wednesday issued an emergency disaster making growers in large portions of four major wheat-growing states - Kansas, Colorado, Oklahoma and Texas - eligible for low-interest emergency loans.
In the corn market, Wednesday’s EIA ethanol production number came in at 826,000 barrels per day, 19,000 barrels per day higher than the previous week. Since September 1, ethanol production is running 10.4% below the same period last year. USDA has forecasted a 10% drop in corn used for ethanol in the current marketing year. In world markets, a South Korean buyer rejected all tenders for corn citing high prices as the reason for not buying any shipments.
For soybeans, expectations of record-high South American production combined with strong nearby demand keep traders in a tug of war about price direction. On Wednesday morning, USDA announced China had bought 120,000 tons of optional-origin soybeans for the new-crop 2013/2014 marketing year.
The next USDA Supply and Demand report will be issued Friday, January 11 at the new time, 11 am CST.