Aug 22, 2014
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Cash Grain Insights

RSS By: Kevin McNew,

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.


Record Large Corn Exports Left to Be Shipped

Apr 02, 2014

 Grains were mixed overnight with front-month May soybean futures moving higher and closing in on the benchmark $15 mark with a 7 cent advance. Wheat and corn were lower in the night session giving up 9 and 2 cents, respectively.

In wheat, prices continue to slide in recent sessions. Rain are expected over parts of the US southern Plains today and over the weekend. Furthermore, lack of trade disruptions from Ukraine are starting to calm fears of the trade. Swithun Still, director of Solaris Commodities, a Russia- and Ukraine-focused grains trader, said he did not expect grains exports from the region to be hit even if the West decided to slap sanctions on energy exports. He said that although it was not business as usual in grains ports such as Sevastopol in Crimea, flows of grains continued. He noted the disruption risk was overblown and that he saw no grains price rally on the back of the current crisis.Juan Luciano, president and chief operating officer at Archer Daniels Midland, said he saw no problems so far for his operations in Ukraine, where the firm has facilities in the port of Odessa, a crushing plant and a small unit in Crimea. The Taiwan Flour Millers' Association issued a tender overnight to purchase 92,550 MT of milling wheat to be sourced from the United States.

In beans, nearby prices continue to rally on exceptionally tight stocks and a strong soy oil market. However, current spot crush margins at about 30 cents a bushel will likely erode processing down the road with operating costs generally thought to be around 50 cents a bushel.

For corn, prices have held up above the $5 mark but it’s not clear how much farther they can climb. On the bullish side, USDA is reporting 18.5 MMT of US corn that has been sold in the old-crop marketing year but has yet to be shipped. This is the highest total ever reported for this time of year by USDA going back to 1990 when they began collecting the data. With such a large volume of exports left to be shipped, it could provide more of a bullish lift to the futures and cash market in the last 5 months of the marketing year.  

fuel for corn bulls

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