Grain Advance Continues
Jan 15, 2013
Grain futures continued their rally overnight led by soybeans which at one point reached as high as $14.36 before pulling back to the $14.27 area. Corn and wheat both advanced overnight, with corn up 2 and wheat up 5.
Monday’s export inspections report showed another strong week for soybeans with weekly inspections totaling 39 mb. For the year, total export inspections are at 856 mb which compares to 640 mb this time last year. Based on Friday’s supply and demand data, USDA still expects export this year to be on par with last year. For corn, export inspections were only 9 mb while wheat totaled 10 mb for the week.
On Monday, Brazilian crop analyst Celeres raised its forecast for the soybean crop to 80.4 MMT compared to last month’s forecast of 79 MMT. This forecast is lower than USDA’s latest number of 82.5 MMT for Brazil. Weather in South America is mostly favorable, although conditions are starting to turn drier and hotter which is helping give some weather premium back to the soybean market.
Wheat futures continue to be buoyed by dry and cold conditions in the Plains, although it is unlikely that the recent cold snap had any lingering effects on the wheat crop. The biggest concern continues to be the widespread drought conditions in the heart of winter wheat territory. Although there have been some moisture events in the past week, total precipitation was mostly less than an inch for much of Oklahoma, Kansas and Nebraska were the drought is most severe.