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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.

 

Wheat Ratings Worst on Record

Nov 20, 2012

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Grain prices held mostly steady Monday night and Tuesday morning with limited news to drive prices off their strong close from Monday’s session.

USDA reported a slightly lower than expected winter wheat crop condition on Monday afternoon. According to their weekly Crop Progress report, USDA pegs 34% in good to excellent condition, below analysts' expectations of 35% and last week’s estimate of 36%.  The ratings are a record low for November and should keep a bullish undertone to new crop futures prices. 

On the export front, traders still look for wheat export business to return to the U.S. with Ukraine and other Black Sea markets running out of wheat, and a recent run-up in the Euro making French wheat less favorable.  

In the corn market, prices remain mostly unchanged around the $7.40 benchmark. Monday’s export inspections for the week of 14 mb were at the upper end of trade expectations, but still a sharp distinct from previous years when totals of 50 mb or more were common.  For soybeans, export inspections of 63 mb were above trade guesstimates and continue to suggest higher exports than what USDA has factored in.

Grain markets should continue to be range bound in this holiday shortened week.  Corn and wheat continue to look for signs of any significant demand news, which has mostly been limited in recent months. This must be what demand destruction looks like! For soybeans, eyes continue to be focused on South America weather and any potential hint of business from China on soybeans. Until we get some surprises one way or the other, markets may continue to hold their ground. 

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THERE IS A SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PLEASE READ OUR RISK DISCLOSURE.

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