Aug 2, 2014
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April 2014 Archive for Cash Grain Insights

RSS By: Kevin McNew, AgWeb.com

Kevin McNew is President of Grain Hedge and Geograin. McNew was raised on a farm in central Oklahoma and received his bachelor’s degree from Oklahoma State University, and master’s and Ph.D. degrees in Economics from North Carolina State University. For over a decade, he was a Professor of Economics at the University of Maryland and Montana State University, focusing on commodity markets. He has received numerous academic awards for his research and outreach work, and was (and still is) widely regarded for boiling down complex economic issues into easy-to-understand concepts for applied life.

 

Wheat Tour Finding Poor Yield Potential

Apr 30, 2014

 Grains were weaker overnight giving up 5 cents a bushel across the board in night trading.

In wheat, the first day of the Kansas Wheat Tour turned up below normal yields. The forecast for the first day was 34.7 bushels per acre compared to 43.8 last year and the five-year average of 43.8. Scouts sampled 271 fields on Tuesday. Today scouts will cross southwestern Kansas, from Colby to Wichita. An initial report this morning showed a 22.9 bushel field in Scott County where the soil is powdery dry. The tour is scheduled to release a final Kansas yield forecast on Thursday.  Tour leaders have warned that the crop is still behind in maturity and in northern parts of the state rains in the next couple of weeks could help boost crop potential.

In corn, widespread rain over the past 24 hours will likely slow corn planting in the Midwest. Parts of the Upper Midwest, Illinois & Ohio received an inch or more in the past 24 hours. Looking ahead to the 6 to 10 day forecast, rain is expected over a wide swath of the Midwest which could further hamper the planting pace. At this point planting delays won’t be a big market mover but as we get into May, the trade could get excited by ongoing planting problems.

In beans, domestic soybean basis continues to be strong as buyers face a tight US supply situation. Heavy hog finishing weights are said to be increasing demand for soymeal. With pipeline stocks at minimal levels, this could suggest further upside for old-crop bean prices, but a better supply situation for new-crop could take out the rally. Picking the actual day and price when traders shift from 2013 news to 2014 news will be the difficult task in trading beans this year.

Wheat Tour Expected to See Drought and Winterkill Impact

Apr 29, 2014

 Grains were mixed in the overnight session with corn and beans posting modest 4 and 2 cent gains, respectively, while wheat gave up 3 cents in the night trade.

Corn got a lift from Monday’s planting progress report which showed 19% of the US crop had been planted, slightly below expectations of 21% by market analysts going into the report. Wet weather is hampering some of the progress with rains of 1 to 3 inches this week expected to slow plantings in the North Central and Upper Midwest. Monday’s export inspections report for corn showed 1,156,332 MT of exports for the week, below trade expectations which ranged from 1,400,000 MT to 1,650,000 MT. The US still has a large amount of corn left to ship based on total commitments. As of last week’s export sales report, the US has 16.5 MMT still left to ship of the total 43.1 MMT commitments to date, or 38% of overall commitments. That implies about 900,000 MT of weekly shipments needed for the remainder of the marketing year to satisfy what is already on the books, at a time of the year when exports are typically lower.

In soybeans, prices continue to seesaw back and forth. Monday saw early gains of 20 cents a bushel on front month May futures get wiped out but May continues to trade above $15 with first notice day coming up tomorrow. Soybean exports came in strong for this time of year with 254,299 MT exported for the week versus trade expectations of 100,000 to 200,000 MT. US soybean plantings came in at 3% this week, the first report of the season and on par with what analysts had expected.

In wheat, the Kansas wheat tour will kick off today. Tour leader Rollie Sears from Syngenta said this year's Kansas hard red winter wheat is at a similar stage of development as last year, which is about 2 weeks later than normal. He noted there is probably more winterkill than we have seen in many years. However, he cautioned at this time of year, the wheat plant is as tough and resilient as it’s ever going to be. It has great capacity to recover. It’s difficult to look at crop and get a picture of what yield is going to be. In export news, Argentina announced they will allow another 500,000 MT of exports. While their wheat is fairly high priced compared to the US, they still may capture some business from Brazil, which could take a bite out of US HRW wheat sales to that country. 

Bean Export Sales Slump

Apr 24, 2014

 Grains were fairly subdued overnight. Wheat was the leader to the upside gaining 3 cents while corn was 1 cent higher. Soybeans slipped 2 cents in the night trade.

Soybeans continue to trade well below $15 for front month May futures as traders expect more cancellations of soybean exports and talks of Brazil bean cargoes coming to the US markets. Basis levels continue to hold up relatively well, but deferred delivery beyond June is starting to fade pretty quickly. Export sales were disappointing this week with only 800 MT of old-crop sales, but even more bearish was the lack of significant business for new-crop with only 118,000 MT of sales versus trade expectations of 350,000 to 550,000 MT.

In corn, EIA weekly ethanol production showed a drop from the previous week with output off 29,000 barrels per day for a weekly average of 910,000 barrels per day. The weather is expected to be wet over much of Iowa and Illinois today and tomorrow which could hamper corn plantings. However, the longer term outlook is for dry weather to return to the Midwest and with it still being April, it is probably too early to be overly concerned about planting delays. On Wednesday, USDA reported China bought 120,000 MT of US sorghum for old-crop delivery, signifying they are still in the market for feed grain even if they aren’t buying US corn.

For wheat, markets have remained downwardly biased after rain helped give some modest relief to the Southern Plains. Over the past week, 1 to 2 inches of rain were observed in Southern Oklahoma and Western Kansas. However, dry conditions are expected over the next 10-day forecast period for much of the Southern Plains, so it seems drought conditions will likely persist. In international deals, Morocco bought 30,000 MT of wheat overnight from Poland. This morning Stats Canada released their wheat plantings estimate for 2014, which they pegged at 24.766 million acres, just a bit more than 24.4 million acres expected, but off from 2013 plantings of 26.1 million.

WEEKLY EXPORT SALES (in thousand metric tons)

 

OC Actual

OC Expected

NC Actual

NC Expected

Corn

618.9

500-800

382.9

150-250

Soybeans

0.8

-200 - +100

118.2

350-550

Wheat

339.1

200-400

271.7

250-500

 

 

Soybean Selloff Continues

Apr 23, 2014

 Soybeans continued to move lower in the overnight session giving up 10 cents a bushel. Wheat and corn were mostly quiet in the night trade with fractional changes.

Front month May beans have tumbled 60 cents in the past 4 trading sessions as reports circulate of South American beans heading to the US. A pair of Brazilian soybean vessels initially sold to China by Marubeni are now US-bound. One is headed for Wilmington, NC, and the other to Mobile, AL. In production news, the Rosario Grains Exchange estimated Argentina’s 2013/14 soybean crop at 54.9 MMT versus a previous estimate of 54.7 MMT. USDA has Argentina’s crop at 54.0 MMT in its latest April WASDE report.

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In corn, weather models are beginning to hint at more rain in the Midwest in the coming week which could slow the pace of planting. Rain is expected to be about 1 inch over much of Iowa, Wisconsin and Minnesota in the coming 48 hours, with more rain expected early next week. On Tuesday, private exporters reported the sale of 240,000 MT of U.S. corn to Mexico for delivery in the 2014/15 marketing year.

For wheat, Oklahoma State Agronomist Jeff Edwards found damage from last week’s freeze in field trial plots, although damage was quite variable ranging from 5% to 80% depending on the location. Edwards goes onto to state "The drought has severely limited resilience in our crop and we are entering late April, so I do not anticipate there will be much of a recovery or rebound in fields that were severely damaged. It is important to note that 50% injury does not necessarily mean 50% yield loss. In most cases the actual yield loss will be less than the % injury. So, it is reasonable to expect that 50% injury might only result in a 35 or 40% yield loss." In overnight deals, Japan's Ministry of Agriculture bought a total of 108,789 MT of food quality wheat from the United States, Canada and Australia in a regular tender. In Australia, timely rains will boost wheat plantings by farmers when the seeding window opens later this week, analysts said, but the threat of an El Nino dry weather system may see production fail to capitalize on the good start to the season.

Weather Favors Fast Planting in Coming Weeks

Apr 22, 2014

 Grains found modest support overnight following Monday’s sharp selloff. Soybeans and wheat were up 5 cents in the night session while corn climbed 3 cents.

Beneficial weather was a key driver in Monday’s selloff as wet weather was in the forecast for the Southern Plains, which has been engulfed in a massive drought. By the weekend, a low pressure system will be approaching the Plains another opportunity for thunderstorms in the Central-Southern Plains for the weekend. Monday’s crop progress report showed no change in the overall condition of the winter wheat crop, which held steady at 34% good to excellent. In overnight deals, Iraq's state grain board has rejected all offers and made no purchase in a tender for at least 50,000 MT as prices were said to be too high. Meanwhile, Japan's Ministry of Agriculture is seeking to buy a total of 108,789 MT of food quality wheat from the United States, Canada and Australia in a tender that will close late on Wednesday.

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In corn, a dramatic warm-up in the Midwest is helping give farmers a chance to catchup on planting. All though this week’s planting pace was at 6%, below expectations of 9% by analysts, the weather outlook for the remainder of the week looks very favorable for farmer planting. Monday’s export inspections report showed another strong week with total exports hitting 1.6 MMT, above trade expectations which ranged from 1.05 to 1.55 MMT. Overnight a South Korea feed group bought 60,000 MT of corn with optional origin from the US or South America.

For soybeans, Chinese customs data released on Monday showed the country has kept up its strong appetite for beans, with total imports up 33% year to date, and most of the volume coming from the US so far. Weekly US export inspections were slim with 138,777 MT of shipments for the week, at the low end of expectations which ranged from 135,000 to 350,000 MT. In the cash market, slow farmer selling is being largely offset by limited exporter and processor demand. Bids for soybeans were weaker in Davenport along mid-Mississippi River after dealers there felt there were a touch too aggressive in hiking their bids last week. A firmer tone in barge freight costs amid lock delays on that stretch of the river also weighed on basis.

 

Favorable weather on the horizon

Apr 21, 2014

The grains are trading lower this morning on improving weather outlook for the next 10 days. This morning May corn is down 3 3/4, May soybeans is down 8 ½ and May wheat is down 12 ½ cents.

The central plains saw temperatures in the 70’s over the weekend, with Chicago recording temperatures at 79F degrees on Easter Sunday. The weather outlook favors a dramatic warm-up throughout the U.S and parts of Canada over the next 10 days which will have speeding effect on planting. Planalytics is expecting temperatures average 3 to 6 degrees F above normal in the major corn producing areas which will improve soil temperature throughout the grain belt. Two low pressure systems are expected over the Central Plains this week which are expected to move eastward. This first low pressure system is expected on the 23rd and the second is expected on the 24th and 25th. These events will interrupt planting slightly but not impact progress for more than a day.

The crop progress report will be released later today at 3 PM CST. Analysts are expecting corn plantings to be 15 percent complete which would be only 3 percent behind the average by late April.   

China’s customs data was released overnight which showed that soybean imports through March were up 33.5 percent year over year with the U.S supplying the vast majority. Corn imports were up 14.7 percent year over year with the imports largely sourced from Argentina, while U.S corn imports to China fell 16.1 percent.   

Bean Sales Still Not Being Canceled

Apr 17, 2014

 Grains climbed higher overnight with soybeans once again leading the charge for its 4th consecutive day of gains. In the night trade, front month May soybean futures were up 7 cents a bushel while wheat posted a 3 cent advance. Corn followed with a 1 cent gain.

Soybeans continue to be fueled by tight supplies in the US where strong exports and crush have cut into available supplies. This week’s sales showed only 19,000 MT of old-crop for the week, but the total commitments for the year still far exceed USDA’s projections. Total export commitments for old-crop stand at 44.6 MMT versus USDA’s projection of 43.0 MMT to be shipped for the entire year.

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In corn, weather conditions look fairly good for planting. The next few days look fairly dry across the Midwest, although a system is expected from Sunday into Monday. After that, the southern half of the Midwest through the Delta should be fairly dry in the 6-10 period. The 11-15 day, the last five days of April, looks dry across most of the central U.S. as well. Weekly ethanol production released on Wednesday by EIA showed strong levels at 939,000 barrels per day, up 45,000 from last week and the highest weekly total since December.

For wheat, weather continues to be a factor in the southern Plains. There might be some rain tomorrow, and then a better chance this weekend. But most areas are expected to see at most 0.5 inch of moisture, not enough to dramatically improve the situation. Looking ahead in the 6-10 and 11-15 outlook the region looks fairly dry across those areas

 WEEKLY EXPORT SALES (in thousand metric tons)

 

OC Actual

OC Expected

NC Actual

NC Expected

Corn

601.9

550-850

192.6

0-150

Soybeans

19.2

-100-100

400.7

175-350

Wheat

438

50-250

359.9

225-375

 

Soybeans Eclipse $15 Amid Tight Supplies

Apr 16, 2014

 Soybeans moved sharply higher in the overnight session with front-month May futures gaining 17 cents a bushel and new-crop November up 8. Wheat was also higher with a 3 cent advance, while corn was fractionally lower.

Yesterday brought bullish news for beans with NOPA monthly crush figures being released. For the Month of March, US crushers used 153.8 MB which was above trade expectations of 146.1 MB going into the report. With tight stocks and strong exports, the strong crush number suggests even more tightness going forward. While some imports have occurred of late to help alleviate tightness, it seems the US is well shy of reaching the 65 MB import projection to keep stockpiles from disappearing altogether by the end of the marketing year. Some crushers are boosting their basis sharply in recent days with +50K or higher becoming the norm across much of the Midwest with 2 weeks left until first notice day on May beans.

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For wheat, prices were weaker on Tuesday for the first time in three sessions, but recovered some of the losses overnight. Damage from the freeze in the southern Plains is still being debated. Oklahoma State agronomist Jeff Edwards said "Most of Oklahoma spent at least four hours below freezing last night and some areas spent an extended period of time below 28F. While temperatures in the wheat canopy might have remained slightly higher than reported air temperatures, they were still probably low enough to result in significant injury to wheat."  In Ukraine, the situation is getting worse and more and more operators are challenging the ability of the country to properly produce and export grains. But no concrete impact can be observed for the moment.

In corn, the market continues to be somewhat of a follower of the wheat and soybean market. However, its own fundamentals remain supportive with export activity exceptionally strong, and ethanol margins running high. Today will bring the latest EIA ethanol production figures which should continue to show robust production for the ethanol producers.

 

Cold Weather Threatens US Plains Wheat

Apr 15, 2014

 Grains were mostly lower overnight following Monday’s rally. Nearby May soybeans was the exception, gaining 8 cents a bushel, while corn and wheat lost 2 cents each.

Cold temperatures across the southern Plains poses a threat to the wheat crop. According to Oklahoma State agronomist Jeff Edwards, wheat in Oklahoma ranges from just past jointing to late boot and if forecasts are correct wheat injury is likely. Given the limited moisture and limited time prior to harvest, Edwards thinks, it is not likely that the crop will recover from a complete loss of tillers. In Monday’s Crop Progress report, USDA saw ratings slip slightly, going from 35% good to excellent last week versus 34% good to excellent this week for the winter wheat crop.

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In corn, plantings got underway this past week with 3% of the corn crop planted according to USDA. That’s up from 2% last year, but behind the 5-year average pace of 6%. Export inspections for corn were strong, totaling 1.44 MMT, which was above the 1.350 MT upper end of trade expectations going into the report. It was also the highest weekly total going back to 2008.

For soybeans, export inspections were on the low side of trade expectations. Actual inspections came in at 267,000 MT versus analyst expectations of 325,000 to 450,000 for the week. Soybean cash basis bids are mostly steady at elevators and processors around the U.S. Midwest, a touch firmer on the Mississippi River.   

Wheat Skyrockets on Ukraine Tensions

Apr 14, 2014

 Wheat jumped higher in the night session reacting to escalating tensions between Ukraine and Russia over the weekend. At the end of the overnight session, wheat was up 15 cents a bushel while corn and soybeans gained 4 and 6 cents, respectively.

Ukraine has given pro-Russian separatists a Monday deadline to disarm or face a full-scale anti-terrorism operation with full force. This has raised the risk of military conflict, with the market building in a premium for potential trade disruptions or production issues down the line. In the case of wheat however, Ukraine farmers planted their winter wheat and face little constraints, but the same is not true for spring planted corn where farmers are reported to be facing resource constraints. However, trade has not been noticeably impacted. Indeed, Russian agricultural consultancy SovEcon has raised its 2013/14 grain export forecast due to more active March shipments than previously expected, it said on Monday.  Global wheat prices have been rising in recent months on concern over grain supplies from the Black Sea, triggered by Russia's annexation of the Ukrainian region of Crimea. Russia’s exports have been higher caused by global price growth and a weakening rouble. Russian wheat was the lowest offer in a tender from Iraq’s state grains board to buy at least 50,000 MT of wheat to be sourced from the United States, Canada, Australia, Ukraine or Russia.

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In corn, South Korea's largest animal feed maker Nonghyup Feed Inc has purchased 193,000 MT of optional origin corn and 65,000 MT of optional origin feed wheat in a tender which closed on Monday.     The tender had sought September/October arrival. In Ukraine, a grains conference on Friday suggests that production there could fall sharply in the coming year with analysts looking for a 23-24 MMT crop as compared to 31 MMT last year.

For beans, export activity has been mostly quiet of late with most business occurring for new-crop delivery. At least one soybean cargo defaulted on by Chinese importers was sold by Japan's Marubeni Corp, three sources said, as slowing demand and tightening credit in the world's top importer hits oilseed trade. One Tokyo-based source with direct knowledge of the situation said Marubeni incurred a loss of $4 million on 4-5 soybean cargoes which were defaulted on by Chinese buyers as they could not get letters of credit.

 

Chinese Crushers Default on Bean Purchases

Apr 10, 2014

 Grains were weaker overnight following Wednesday’s volatile trade from the latest round of USDA supply and demand data. In the night session, beans were down 10 cents while wheat and corn gave up 3 cents a bushel.

USDA’s supply and demand report released on Wednesday showed tightening US corn and soybean carryout. For corn, USDA raised US exports by 125 MB, which led to an equal decline in ending stocks at 1,331 MB, and below trade estimates going into the report of 1,403 MB. For soybeans, exports were raised by 50 MB over the previous forecast in March, but imports were raised 30 MB to a record high level of 65 MB if achieved. These adjustments, combined with a 5 MB drop in crush cut into the US carryout by 10 MB from the March forecast, and now stands at the razor thin mark of 135 MB.  

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While the markets were spurred on immediately after the report, prices quickly eroded as sell triggers were reportedly hit and farmer selling was said to intensify. May corn breached below the $5 mark but managed to inch above it in the night session. Overnight there was chatter that several Chinese soy crushers were going to announce a default on soybean export deals in the wake of poor margins in China and this morning it was confirmed. Chinese importers have defaulted on at least 500,000 MT of U.S. and Brazilian soybean cargoes worth around $300 million, the biggest in a decade, as buyers struggle to get credit amid losses in processing beans. Three companies in the eastern province of Shandong had defaulted on payments for shipments as they were unable to open letters of credit with banks.

For wheat, prices continue to be dogged by ample world supplies. World wheat carryout increased from 183 MMT to 186 MMT in the latest supply and demand report. Also, logistics problems in Canada seem to be waning as CN Rail announced it would be meet the government target to move 500,000 MT of grain for the week in Western Canada. In the drought stricken US Plains, the weather looks dry over the coming days with only a modest chance of a rain even towards the beginning of next week. The next month should be critical for crop development there.

WEEKLY EXPORT SALES (in thousand metric tons)

 

OC Actual

OC Expected

NC Actual

NC Expected

CORN

960.6

700-900

37.9

0-200

SOYBEANS

66.2

0-150

19.3

100-300

WHEAT

336.4

250-375

310.5

150-300

     

Corn Bookings Exceed USDA Annual Forecast

Apr 08, 2014

 Grains were subdued overnight as traders wait on a delayed Crop Progress report this afternoon and the next WASDE report to be released on Wednesday. Corn and wheat fell 2 and 4 cents, respectively, while nearby May beans were unchanged in the night session.

On Monday, USDA failed to release their first Crop Progress report of the season, instead pushing the report to today at 3 PM CST. However, state offices in the Plains gave some key data on crop conditions there. Oklahoma and Texas saw another week of lower winter wheat conditions as both states fell by 2% in their good to excellent ratings as compared to last week. Kansas sees its winter wheat crop at 29% good to excellent while Oklahoma rated its crop at 15% good to excellent. Texas saw a modest improvement going from 11% last week to 13% this week.

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In beans, prices have been under pressure of late as traders look for an end to the strong export surge for old-crop delivery. News of a vessel of Brazilian soybeans arriving in the US Gulf over the weekend pushed prices down on Monday and have nearby May hovering around support at $14.60. On Monday, USDA announced a 120,000 MT sales of new-crop 2014/15 soybeans that were sold to China.

For corn, Monday saw a strong showing for export inspections with 1.3 MMT as compared to expectations of 1.00 to 1.25 MMT going into the report. China, the world's second-largest corn consumer, has signed an agreement with Brazil to allow imports of corn from the South American country, the Chinese quarantine authority said on Tuesday. Brazil is the 2nd largest exporter of corn in the world market next to the US, who stands to lose business from trade restrictions on US GMO corn. However, in the near term US corn export bookings for old-crop have exceeded what USDA has penciled in for the entire year, with 5 months remaining in the marketing year. Total export commitments for the marketing year stand at 41.3 MMT versus USDA’s annual forecast of 41.2 MMT, which seems to suggest WASDE export forecasts will need to be revised higher.

Brazil Beans Arrive in US Gulf

Apr 07, 2014

 Grains started the week on a quiet note with wheat and beans advancing 6 and 3 cents a bushel while corn slipped 2 cents a bushel.

Over the weekend, A bulk shipment of Brazilian soybeans arrived at the U.S. Gulf Coast on Saturday, one of several South American cargoes that will be imported this season to alleviate tight supplies in the world's top soy producing country.  The Ocean Life, a 75,000-tonne capacity vessel that was loaded at Brazil's Santos port in mid-March, entered the Southwest Pass shipping channel at the mouth of the Mississippi River early on Saturday morning, according to Reuters shipping data. USDA’s FAS shows US export sales so far this marketing year a MMT, much larger than what the USDA’s WASDE report shows as the annual export expectation of 41.6 MMT.

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For wheat, traders will be looking forward to the first USDA crop progress report for all key growing states to get a sense of crop conditions. In Oklahoma, Texas and Kansas the state offices there have shown poor conditions over much of the region.  Over the weekend, very light showers were reported in the Western Plains, which will provide only limited relief to the wheat crop there, where the drought has been severe.

In corn, China has still not approved a gene-modified strain of corn known as MIR162, the government said on Friday, prolonging a ban that has seen nearly 1 MMT of the U.S. grain turned away from Chinese ports since November.  Asked if its biosafety panel had made a final decision, the agriculture ministry said it was still evaluating materials related to the strain that had been submitted late last year by developer Syngenta.  In the US, Midwest weather looks to see warmer and drier patterns starting on Tuesday and into the weekend which could help get some seeding going in the Southern reaches of the Midwest.  Even as far north as Minneapolis, temperatures are expected to reach 70 degrees by Wednesday.

 

Bean Export Sales Disappointing

Apr 03, 2014

 Grains tried to recover some ground in the overnight session following Wednesday’s steep slide. Soybeans were up 10 cents a bushel, while corn and wheat gained 5 and 3 cents respectively in the night trade.

After getting close to the $15 benchmark on Wednesday, May soybean futures fell sharply yesterday falling back to the $14.60 area. Basis levels on Wednesday at some key end users in the Eastern Corn Belt jumped as a result of the slide in futures.  Beans had an exceptionally bad week for sales with old and new-crop a combined 85,000 MT.

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For corn, ethanol production was up sharply thanks to exceptionally good margins for processors. Ethanol prices hit an 8-year high in the past week but have started to back off those highs. Even so, processor margins remain healthy and should continue to encourage some output in the rest of the marketing year. On Wednesday, a group of Israeli private buyers purchased about 35,000 MT of optional-origin corn likely to be sourced from the United States or South America in a tender for up to 85,000 MT. Overnight, China rejected 65,225 MT of U.S. Corn and DDGS because they contained MIR 162, a transgenic trait unapproved by the Chinese Ministry of Agriculture, Xinhua Daily reports on website.

In wheat, rains in the Southern Plains along with improving weather conditions in Australia helped push wheat lower.  Wheat export sales for the week were on par with expectations as both old-crop and new-crop were around 300,000 MT.

WEEKLY EXPORT SALES (in thousand metric tons)

 

OC Actual

OC Expected

NC Actual

NC Expected

Corn

960.7

850-1,150

38

0-200

Soybeans

66.1

0-200

19.4

350-550

Wheat

336.4

200-400

310.5

200-400

 

 

Record Large Corn Exports Left to Be Shipped

Apr 02, 2014

 Grains were mixed overnight with front-month May soybean futures moving higher and closing in on the benchmark $15 mark with a 7 cent advance. Wheat and corn were lower in the night session giving up 9 and 2 cents, respectively.

In wheat, prices continue to slide in recent sessions. Rain are expected over parts of the US southern Plains today and over the weekend. Furthermore, lack of trade disruptions from Ukraine are starting to calm fears of the trade. Swithun Still, director of Solaris Commodities, a Russia- and Ukraine-focused grains trader, said he did not expect grains exports from the region to be hit even if the West decided to slap sanctions on energy exports. He said that although it was not business as usual in grains ports such as Sevastopol in Crimea, flows of grains continued. He noted the disruption risk was overblown and that he saw no grains price rally on the back of the current crisis.Juan Luciano, president and chief operating officer at Archer Daniels Midland, said he saw no problems so far for his operations in Ukraine, where the firm has facilities in the port of Odessa, a crushing plant and a small unit in Crimea. The Taiwan Flour Millers' Association issued a tender overnight to purchase 92,550 MT of milling wheat to be sourced from the United States.

In beans, nearby prices continue to rally on exceptionally tight stocks and a strong soy oil market. However, current spot crush margins at about 30 cents a bushel will likely erode processing down the road with operating costs generally thought to be around 50 cents a bushel.

For corn, prices have held up above the $5 mark but it’s not clear how much farther they can climb. On the bullish side, USDA is reporting 18.5 MMT of US corn that has been sold in the old-crop marketing year but has yet to be shipped. This is the highest total ever reported for this time of year by USDA going back to 1990 when they began collecting the data. With such a large volume of exports left to be shipped, it could provide more of a bullish lift to the futures and cash market in the last 5 months of the marketing year.  

fuel for corn bulls

Bullish Momentum Continues for Corn

Apr 01, 2014

 Monday’s barrage of USDA data gave the corn market a lift and the bullish move continued in the night trade. May corn was up 4 cents a bushel in the overnight session and May soybeans climbed 13 cents a bushel. Wheat fell 6 cents a bushel.

For corn, both stocks and acres came in lower than expected from USDA’s reports on Monday. The biggest surprise was 2014 corn acres at 91.7 million, one million lower than analyst expectations going into the report. Stocks of corn as of March 1 were pegged at 7,006 MB vs 7,099 expected. Overnight, the Taiwan Sugar Corp purchased 20,000 MT of U.S.-origin corn.

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In soybeans, USDA estimated March 1 soybean stocks at 992 MB vs 989 expected. While not overly bullish, front-month May futures shot higher as traders now focus on the fact that US export commitments have nearly outstripped available supplies for the old-crop marketing year. For new-crop, USDA estimated 2014 soybean acres near 81.5 million vs 81.1 expected. Overnight, the Taiwan Sugar Corp purchased 15,000 MT of U.S.-origin soybeans.

For wheat, USDA estimated US March 1 wheat stocks near 1,056 MB vs 1,042 expected. They also estimated US 2014 wheat acres near 55.8 million vs 56.3 expected. The 2 numbers almost cancel each other out leaving wheat to trade weather. Japan's Ministry of Agriculture skipped buying food quality wheat via a regular tender this week due to a custom of not conducting tenders in the first week of the new fiscal year starting April as well as in the first week of a calendar year.

         

 

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