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.
Beans Close in on $13
Jan 14, 2014
Soybeans continued to move higher overnight with front-month March closing in on the psychological $13 mark. Corn and wheat dipped in overnight trade, giving up 2 cents a bushel.
On Monday, soybeans were bolstered by more export sales when USDA announced a 140,000 MT sale for old-crop beans to unknown destinations. The weekly export report also showed better than expected export inspections of 59 MB, 9 MB above the high end of expectations. On Wednesday, the National Oilseed Processors Association's will report monthly crush figures, with analysts looking for 163.9 MB in December, up 2.3%.
In corn, weekly exports were disappointing at 20.9 MB, below expectations of 22 to 29 MB. Farmer sales of corn were reportedly strong on Monday following the recent rally, which has helped soften some basis levels around the country. At Decatur, spot corn basis was off 4 cents a bushel. Futures prices have shown signs of stalling after the price jump on Friday. Although smaller than expected, the US crop is still plenty large and with global competition heating up it may be difficult for corn to maintain its strength. Several analysts continue to expect the market to make a return to the $4 mark at some point in the future.
For wheat, Argentina announced it will be exporting 1.5 MMT of their new-crop into the global market, with 500,000 MT being exported immediately. The 1.5 MMT mark if realized would be below USDA’s latest forecast of 4 MMT of exports for Argentina. India’s state-run trading house PEC sold 120,000 MT of wheat from the Indian west coast port of Kandla was $281.31 a MT. PEC is offering the wheat for shipment between Jan. 20 and Feb. 25 as part of the Indian government's plan to sell 2 MMT of the grain overseas by March as it attempts to reduce bulging stocks.