Grains finished mixed with more large moves in the spreads. March corn settled 4 ¼ cents higher at $6.34 ½, March beans finished down 6 ½ cents at $12.13 ½, and March wheat up 7 ¾ cents at $6.41 ¼.
Published on: 16:12PM Jan 25, 2012
Not much has changed from yesterday. The market continues to move the corn/soybean spreads back in favor of corn, this time the corn is being led higher by wheat. The concern that Russia will put a tariff on wheat exports continues to float our front month wheat contracts. This is also the commodity with a massive short position held by the “managed money” and if they are indeed exiting the trade it could push this market even higher. Given the winter conditions in Russia/Ukraine, the spread between their prices and the rest of the world has probably bottomed until spring. If wheat prices around the world gain ground from this, this strength could easily transfer back over to US corn as our current supply situation becomes of higher importance/concern and that substitute is no longer an economically viable option.
Stronger wheat has been helping corn, but it has also been stronger interior cash bids. The lack of producer selling has kept the cash markets strong and futures are reflecting the strength as well. Short term I wouldn't be surprised to see the price of front month grains continue to rise between now and the first week of February.
This week we are expecting another big week for soybean exports as South American demand has switched back to US. This could be a temporary adjustment until their export business comes back on line. Here are the average estimates for tomorrow’s Weekly Export Sales market:
Corn 650,000 – 850,000 MTs
Soybeans 700,000 – 850,000 MTs
Wheat 500,000 – 700,000 MTs
Source: Reuter’s Poll
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