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.
Crop Report does little to Sway Markets
Dec 11, 2013
On Tuesday, bulls and bears each got a sliver of hope in the latest round of USDA data, with corn bulls finding a silver lining in lower stocks, while wheat bears saw higher carryout than had been anticipated. But, the net result was not much in the way of strong conviction in terms of price direction. Overnight, trading was mostly sideways with soybeans picking up a few cents while corn and wheat were mostly unchanged.
The brightest news on Tuesday came from corn where ending stocks were below 1,800 MB thanks to improved usage forecast for ethanol and higher exports. Soybeans were modestly lower at a 150 MB as compared to expectations of q152 MB. USDA bumped export projections by a modest 25 MB, waiting to see if the exports will be able to sustain their lofty levels or whether deals will be canceled later this year. Wheat stocks bucked the trend showing higher than expected stocks on higher US imports from Canada.
Following Tuesday’s report, several key Western Corn Belt soy plants reduced their continuing a trend of softening spot basis levels over the past 3 weeks. However, with a negative carry beyond the next month, cash buyers are starting to bid up basis levels for March delivery with the overall cash market spread between January and March at a -14.8 cent discount across all cash buyers on average, as compared to the futures which is trading at a -16.25 discount between Jan & Mar futures.
Overnight tender business was fairly active with a Taiwan company seeking 23,000 MT of US corn and 12,000 MT of US soybeans. Bangladesh bought 50,000 MT of optional origin wheat. Egypt’s GASC is seeking wheat from a tender issued on Tuesday, but overnight they amended the tender to only source Russian wheat.