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.
Will Wheat Find New Export Biz
Jan 15, 2014
Soybeans held on to slim gains overnight after another round of higher prices on Tuesday. Corn and wheat continued to struggle with modest losses of 3 and 1 cent respectively.
For beans, prices have rallied to their highest level since Christmas, but seem to be lacking conviction to the upside. After trading as high as $13.16 in Tuesday’s day trade for March futures, prices have fallen back and consolidated around the $13.07 level. Today brings the NOPA monthly crush report for December with traders expecting a 2.3% increase over November with an average estimate of 163.9 MB and a range of expectations from 160 to 166.5 MB.
In corn, basis levels continue to move lower with Decatur posting a 4-day in a row of lower basis quotes. Since Friday’s report, spot basis in Decatur is off 23 cents a bushel. Overnight, South Korea's largest animal feed maker Nonghyup Feed Inc. (NOFI) issued an international tender to buy up to 140,000 MT of corn and 70,000 MT of feed wheat. The tender deadline is Thursday, Jan. 16, with optional worldwide origin sought for May arrival.
For wheat, the recent slide in US futures prices has some buyers looking for new supplies. Brazil mills are rumored to be seeking US HRW, and with Argentina only shipping 500,000 MT of wheat in the near term this could spell more business for the US. Further, Argentina wheat is reported to be $50/MT higher than US HRW wheat, which could fuel more buying from the US. Overnight, French government officials projected 2013/14 soft wheat ending stocks at 2.7 MMT, up from 2.4 MMT seen last month, while exports were cut from 11.8 MMT in December to 11.5 MMT in January. Meanwhile, Ukraine raised its overall grain harvest projection for 2013 to 62.9 MMT, up from 46.2 MMT in 2012.