Grain prices continued to trade in a narrow range overnight as participants eagerly await fresh supply and demand data from USDA on Thursday. Corn and soybean prices were mostly unchanged over night while wheat posted a modest 1-cent gain.
In soybeans, the market has been bolstered of late by Brazil’s ongoing logistical problems and getting their record-large crop to the export market. There is now a 20km line-up of trucks and 65 days delay in shipping, mostly for soybeans, in Brazil. Further evidence of this bottleneck was apparent as Mato Grasso cash prices traded at a $5 a bushel discount to US front-month futures, the largest such discount in over 5 years. For Thursday, traders are looking for higher soybean plantings this spring as US farmers are expected to sow 78.4 million acres of soybeans, up from 77.2 million last year.
For corn, ethanol margins continue to show signs of improving which is helping push ethanol plants to bid more aggressively for corn. Credits for blending ethanol with gasoline jumped to a record $1.06 a gallon on March 8, from 7.1 cents two months earlier, boosting the incentive to produce more. Valero said March 15 it restored operations at a plant in Bloomingburg, Ohio, and restarted a mill in Linden, Indiana, on March 22. At least 19 plants had been idled since June, according to the Renewable Fuels Association in Washington. For Thursday, traders are looking for a modest gain in corn plantings with US farmers expected to plant 97.3 million acres of corn, up from 97.2 million last year.
For wheat, temperatures have warmed up after the deep freeze conditions in the Southern Plains over the past few days. It remains to be seen whether or there was widespread wheat freeze injury in the 2013 wheat crop, but some injury may have occurred in more advanced fields where jointing is occurring. Overnight, South Korea bought 38,000 MT of wheat from Australia.