Frigid Temps Give Grains Something to Rally On
Jan 06, 2014
Grains started the week on positive footing with concerns about frigid temps impacting the dormant winter wheat crop, and wheat futures gaining 3 cents a bushel. Corn and beans were up 2 cents a bushel.
The Midwest continues to endure the lowest temperatures in two decades, with thermometer readings at negative values and wind chills in the -30 to -50F range. Countless cash grain elevators are closed on Monday due to the extreme cold. Further, cash traders report that Midwest river conditions continue to decline. Low water on St. Louis and icing on the Illinois River is raising concerns about grain movements this coming week.
In wheat, the extreme conditions pose a risk to portions of the dormant hard red winter wheat crop, particularly in drier areas of the region, meteorologists and agronomists said on Friday. Low temperatures on Monday morning were expected to hit -5F to 15F in parts of Kansas and Nebraska, cold enough to destroy some crops through winterkill. Snow cover will remain quite thin across much of Nebraska and north-central Kansas, and some extensive winterkill damage is likely there. In international news, Egypt’s GASC on Friday bought 545,000 MT of wheat from Ukraine Russia, Romania and France. Overnight, a flour mill in Oman has issued an international tender to purchase 40,000 MT of Indian-origin wheat.
For soybeans, Friday’s weekly export sales tally showed a robust 934,000 MT of new business. This was well above trade expectations and 31% higher than the previous week. Rains will fall this week over southern Brazil, where soybeans are still developing. In the center-west, rains will be more isolated, permitting harvesting. Farmers started cutting beans in top-growing Mato Grosso state around Christmas and progress was in line with the previous year. Overall, rainfall has been adequate and the Brazilian crop is shaping up to be a record of about 90 MMT. Rains last week in No. 2 soy state Parana and No. 3 Rio Grande do Sul, where harvesting starts later, alleviated concerns of dryness hurting yields.