Sep 20, 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.


Soymeal Demand Lifts Beans

May 20, 2014

The grains traded higher in the overnight with July corn trading up 2 cents bouncing off its 100 day moving average, soybeans up 6 ¼ cents on strength out of soymeal and Chicago wheat rebounding 7 cents off of technical support.

July and new crop soybeans both traded higher in the overnight supported by the strength in soymeal which has maintained a strong up-trend since February, recently making fresh contract highs. Adding to the soymeal strength has been talk that crushing plants around the Midwest are running low on soybean stocks. In the last week the average U.S soybean basis has jumped 4 ¼ cents supported by strength at processing plants and along the river.

Yesterday’s crop progress report showed 73% of corn now planted, up 14% on the week and slightly below trade expectations. This puts planting pace now 3% behind the 5 year average for this week in May. Key states to watch moving forward are North Dakota, Minnesota, and Wisconsin where a cold rainy spring has put planting pace well behind schedule.

Soybean planting is now 33% complete, up just 13% on the week. Following last week’s rain, soybean planting progress is now 5% behind the 5 year average and giving some traders concerns about planting progress. North Dakota, Minnesota, and Wisconsin will also be important to watch in terms of soybean sowings. This week’s report showed just 16% of Minnesota, 5% of North Dakota, and 8% of Wisconsin soybean acres planted.

Looking ahead, rain is likely over the next several days across northern tier states but the 6-10 forecast looks favorable for planting. Friday and into the weekend we should see a warming trend develop that will extend from Montana into northern Illinois and help keep planters rolling as insurance deadlines approach.



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