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.
Soybeans Soybeans Soybeans!
May 23, 2014
This morning the grains are trading higher with July corn up 2 ¼ cents, July soybeans up 4 ¾ and July Chicago wheat up 3 1/2.
Soybeans are continuing their move higher this morning, up 4 ¾ cents for July and 2 ¼ cents on November. Thursday’s export sales report confirmed that international demand remains strong for old crop U.S. soybeans even with prices near $15.00 per bushel. Net old crop sales were reported at 73,600 metric tonnes, well above the 100 – 150,000 tonne cancellations traders were expecting. Weekly cancellations are needed for the USDA’s current export projection to hold, with accumulated exports now above the 1.60 billion bushels in exports projected for the entire marketing year in the May USDA report. Demand rationing will signal the top of this market, and many soybean bulls feel that this week’s export figure and current crush data point to a market that still has some legs as we enter the summer months. New crop futures continue to follow the July contract higher, with November 14 soybeans futures up 4% so far this week. With large carryout expected for the 2014/15 marketing year we still feel this is a good pricing opportunity for a portion of new new crop bushels.
Chicago wheat is up 3 ½ cents in the overnight session after finding some support at the 200 day moving average around $6.58. The wheat trade has continued to focus on the ample global ending stocks in the recent weeks, with wheat pulling back more than 8 percent in the last few weeks. There seems to be strong demand globally with a tender this morning from Turkey for 70,000 metric tonnes and yesterday’s announcement that Jordan issued a tender for 100,000 tonnes. The business however, seems to be going to Russia with U.S wheat still uncompetitive on the global market. Yesterday, wheat export sales were reported at 142,200 for 14/15 delivery which was within analyst expectations, but even those numbers are still lackluster.