Bean Prices Stabilize But for How Long?
Feb 25, 2013
Grain prices were mixed overnight with soybeans gaining 4 cents while wheat prices were down 4 cents. Corn was mostly unchanged.
Soybeans started Sunday’s session sharply lower, trading down to $14.53 but managed to recover those losses by Monday morning and post a positive gain. Brazil’s dock strike has seemed to come to an end as government officials and laborers met over the weekend and dock workers called off their strike. Ports in Brazil have 192 vessels waiting to load oilseeds and grains, more than double last year’s number of 90. The Brazilian soybean harvest is 27 percent complete, ahead of last year’s 20 percent pace. Although China was in the market last week for US beans, it seems likely that their buying will turn to bountiful South American supplies in the coming weeks.
For corn, CFTC data on Friday showed large speculators added to their short positions cutting their overall bullish bet to the lowest level in eight months. Improved moisture in the Western Cornbelt in recent weeks, combined with an outlook for bumper supplies in the coming 2013/14 crop year will make it difficult for prices to regain their highs of recent months.
Wheat prices continue to be pressured by improved precipitation in the Plains. Last week’s storm dumped a foot of snow in key areas of Kansas and Oklahoma last week, and a second storm system is hitting the region again this week expected to bring another foot of snow. But, demand strength from export business may keep prices from pushing significantly lower. Friday’s USDA export sales report showed a robust week of nearly 700,000 MT of US wheat sales, compared to 400,000 to 600,000 MT expected by analysts.