Grains Dip Lower Overnight
Jan 17, 2013
Grains took a break from their recent run-up as overnight trade saw mostly lower prices across the complex.
Traders continue to watch weather conditions in South America, as dry weather seems to be a key feature of most forecasts over the next week. Agronomists and farmers in Argentina say the corn crop needs rain by the end of the month to achieve the record-high crop forecast of 28 MMT. Rains have been limited lately and meteorologists see only sparse showers on the horizon.
In the corn market, little in the way of export business seems to be materializing. On Wednesday, EIA showed ethanol production took a hit for the week as production averaged 784,000 bushels per day, the lowest level since the agency started releasing weekly data in June 2010. Grain Hedge still expects final corn use for ethanol to fall short of USDA’s current target of 4,500 MB as weak margins for ethanol producers should limit production.
For wheat, dryness in the Plains continues to ve a focus of the trade. But, India’s competition in the global marketplace seems to be putting a damper on the wheat market. India offered 200,000 tons of wheat for export overnight, and for the year they are expected to export 6.5 MMT, up from 0.9 MMT last year. Crop forecaster Lanworth on Wednesday cut its estimate of U.S. wheat production by 500,000 tonnes due to persistent drought in key production areas of the U.S. Plains states. Lanworth pegged U.S. wheat production for the 2013-14 crop year at 53.8 MMT compared to its previous outlook of 54.3 MMT.