Aug 22, 2014
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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.

 

Soy Sales Slump, Corn/Wheat Beat Expectations

Dec 19, 2013

 Beans posted a modest 2 cent recovery following Wednesday’s 20 cent selloff with wheat and corn also advancing modestly in overnight trade.

Soybeans took a hit on Wednesday thanks to technical selling and a sharp move lower in soymeal. Basis bids continue to hold firm at most export points as strong near-term demand keeps cash buyers in the market. Load out capacity at the Gulf continues to be a problem. Gulf export loading capacity is effectively sold out for December and nearly all of January. Some exporters have offers for late January, but they are at a steep premium to more distant months when capacity is more readily available. Gulf bids continue to hold at elevated levels.

 2013 12 19

In South America, corn and soybean growing conditions currently are favorable in Argentina but a turn to drier and warmer conditions into January could stress crops. High temperatures in the upper 90s are expected to persist there for the coming week. In Brazil, showers and moderate temperatures continue to benefit corn and soybean crops in Brazil.  

In corn, ethanol production for the past week was slightly lower by 16,000 barrels per day at 928,000 barrels per day. However, year-to-date production continues to outstrip last year’s pace by 10%, while USDA looks for only a 5% jump in corn used for ethanol in the current marketing year.

For wheat, prices continue to slump on large global supplies and foreign competition in the export market. Iraq bought 350,000 MT of Australian wheat overnight. French Analyst Strategie Grains sees the  2014/15 EU-28 wheat crop at 138.0 MMT, up 2% on the year due to higher plantings. Argentine exporters are still awaiting the government's green light to ship 1.6 MMT of 2013/2014 wheat that has already been sold. Brazilian mills bought 50,000 MT of US HRW wheat, and are thought to be in the market for more as their shipments purchased from Argentina are not moving out of ports.

WEEKLY EXPORT SALES (in thousand metric tons)

 

Actual

Expected

Corn

872

550-750

Soybeans

495

700-900

Wheat

659

300-400

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