The Grain Hedge Team provides a macro-focused daily view of the world’s grain markets. Kevin McNew received a bachelor’s degree from Oklahoma State University and his master’s and Ph.D. degrees in Economics from North Carolina State University. He spent 10 years as a Professor of Economics with the University of Maryland and Montana State University focusing on commodity markets and is widely regarded for his ability to boil-down complex economic situations into easy-to-understand concepts for applied life.
Bean Selloff Continues
Feb 11, 2014
Beans were weaker in overnight trade, giving up 11 cents a bushel with most of the losses happening at the end of the night session. Corn was mostly unchanged overnight, while wheat posted a 3-cent advance.
Mondays’ revised supply and demand estimates from USDA were thought to be bullish for corn and wheat bought only wheat found any real upside following the report. In corn, USDA increased the US export forecast from 1,450 MB last month to 1,600 MB in their latest estimates. This cut the carryout to 1,481 MB. On the world front USDA cut the Argentine corn crop estimate by 1 MMT to a new forecast of 24 MMT. However, traders seem reluctant to push prices higher as some analysts believe the feed use forecast for this year – a 22% increase over last year – is too high at 5,300 MB.
For beans, analysts had been expecting at least a modest decrease in US ending stocks but the USDA kept their forecast unchanged and left carryout at 150 MB. On the international front, USDA trimmed the Argentine bean estimate by 0.5 MMT but raised the Brazilian crop estimate by 1.0 MMT. Soybean export premiums at the Gulf were mixed on Monday as new export demand is slowing as the South American harvest picks up, but tight loading capacity through March is keeping a floor under FOB basis offers. Some Chinese importers were said to be offering to resell some Feb and March US purchases today, traders said. That follows active buying of South American soy by China late last week, they said.
In wheat, USDA cut their US carryout forecast to 558 MB thanks to a 50 MB higher projection for US exports. However, overnight the Australian government revised their wheat crop estimate higher to 27.01 MMT, just above the USDA figure of 26.5 MMT.