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.
Grains Slide Lower Overnight
Apr 01, 2013
Nearby corn futures continued to move sharply lower overnight after Friday’s USDA stocks report triggered a limit-down move of 40 cents. In Sunday’s overnight session May corn futures were off 37 cents a bushel, while soybean futures fell 17 cents a bushel. Wheat prices lagged the other grains, but were off 7 cents a bushel as well.
USDA’s quarterly corn stocks numbers came in shockingly higher than expected with all inventories totaling 5.399 billion bushels, compared to trade estimates of 5.013 billion bushels. Implied corn usage for the Dec-Feb quarter tumbled 27% from a year earlier, the smallest corn consumption for that period since 2002. For new-crop , USDA pegged plantings at 97.282 million acres, up from 97.155 million in 2012 and the most in 77 years.
In soybeans, stocks came in on the high side of expectations totaling 999 MB, but plantings were 77.1 million acres which was at the low end of analyst estimates, and off from last year’s final acreage number of 77.2 million.
For wheat, stocks in all positions were at 1.23 billion bushels versus expectations of 1.18 billion bushels while plantings for wheat came in at 56.4 million acres, on par with analyst expectations. Overnight, trade news was limited although India again announced another export tender to sell 65,000 MT of wheat as the country continues to move massive stock piles into the global market. Egypt also announced they are looking for a better domestic crop this year which could help reduce their import needs in the future.