Rain Forecasts Pressure Grains Overnight
Feb 06, 2013
Grain futures fell in the overnight session as weather models showed more precipitation coming for parched Argentina and the US Plains. Soybeans led the way lower, falling 10 cents while corn and wheat were off 5 cents.
The weather outlook for the next 6 to 10 days calls for 1 to three inches of rain to fall over large sections of central, eastern and northern Argentina. These areas have been particularly dry of late so timely rains, if realized, could help improve crop conditions.
For wheat, much needed moisture is expected in Oklahoma and Kansas over the coming days. Rainfall is expected to be heaviest in Kansas with 0.50-0.75 inch of rainfall in the western half of the wheat belt, and 0.75–1.25 inches in central Kansas. Oklahoma is also expected to receive 0.50 to 1 inch of rain.
In corn, prices pushed lower over night taking out recent support in the $7.24 area. Sluggish demand for exports and continued weak ethanol crush margins keep the demand side of the corn market tame. Ag Processing Inc in Hastings, Nebraska is the latest plant to close on weak conditions. On Friday, USDA is expected to increase their forecast of ending stocks for corn. An average of analysts' estimates pegged the U.S. corn stocks for the 2012/13 marketing year to total 618 MB, up from their forecast of 602 MB in January.