Selling Continues to Hit Grains in New Year
Jan 03, 2013
Corn and soybean futures were hit hard by selling overnight as prospects for a bumper South American crop continue to loom over the market. As of 6 am CST, front-month corn was off 5 cents while soybeans were off 12 cents. Wheat was mixed overnight following yesterday’s steep selloff.
Corn broke below long-held support of $6.88 over night and now seems poised to fill the gap left from July 3rd at $6.83. Struggling export business continues to underpin the market. Overnight, Kuwait purchased 30,000 tons of corn from South America.
For wheat, more bearish news came out as Egypt’s GASC announced it had purchased enough supplies from local and international sources to last until June 17 and expects to get an additional 5.5 months' of stocks from increased local wheat supplies. India also sold wheat into the world market at a price of $318/mt or $8.65 a bushel. By comparison, US Gulf HRW wheat is trading around $9 a bushel.
In soybeans, weather conditions continue to be favorable in South America with only small areas of extreme dryness or overly wet. All totaled, traders see little to stand in the way of a record large soybean crop from South America. Overnight, March futures traded to their lowest level since November, touching $13.72.
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