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.
Beans Retreat Overnight While Corn and Wheat Firm
Feb 28, 2013
Soybean prices fell by 10 cents overnight while corn and wheat prices managed modest gains of 1-cent a bushel.
In the soybean market, Thursday’s USDA export sales pushed prices sharply higher on the day session, as weekly sales were a combined 1.1 MMT for old-crop and new-crop delivery, surpassing the high end of analyst expectations of 1 MMT. In addition, the Buenos Aires Grains Exchange pegged the Argentina soybean crop at 48.5 MMT vs their previous estimate of 50 MMT, and well below USDA’s forecast of 53 MMT from February.
For wheat, the steep selloff in February has pushed prices low enough to be a cheaper alternative to corn any many key domestic areas. Furthermore, the recent slide has given renewed interest by international buyers. Although Thursday’s export sales of 524,900 MT were in line with analyst expectations, the US market continues to be the low-cost player in the global marketplace. However, substantial strength in the US dollar could hamper US export competitiveness. Overnight, the dollar index was trading higher and has rallied 4.1% since the first of February, while wheat prices have fallen 8.6% over that same period.
In corn, export sales on Thursday surpassed analyst expectations coming in at 512,600 MT, above the high guess of 450,000 MT. Nearby May futures surpassed the key $7 area for the first time in two weeks, but faces key resistance around the $7.05 area.
Thursday was the final day of trading for CBOT corn and soybeans for RMA to set crop insurance levels. The average prices for February were $5.65 for corn (vs $5.68 in 2012) and $12.87 (vs $12.55 in 2012) for soybeans.