The grains continued their rise in the overnight session as more export sales of wheat and soybeans were announced.
In the overnight session the grains traded higher again with corn up 2 cents, soybeans up 7 cents and wheat trading up 7 1/2 cents this morning. Yesterday there was talk that China purchased 233,000 metric tons of wheat which was seen as a positive sign for the grain. The origin of the grain is unclear but traders suspect Australia and U.S. wheat are the most likely. China is the world’s largest producer and consumer of wheat, but currently faces a need for high-protein wheat. Japan also purchased 122,770 metric tons of food-quality wheat from the United States in a tender closing on Thursday.
Yesterday’s rally brought soybeans off of the low side of the range it has been trading in since late October. The rally was primarily driven by short covering after four straight days of selling. It was further fueled by an export sale to China for 233,000 metric tons of soybeans and concerns of dryness in Brazil’s north eastern growing area. Recently, weather models have turned drier over the next 15 days causing traders to monitor this region more closely. This morning another reportable export sale of 243,000 metric tons delivered to China was announced.
Export inspections were released yesterday showing wheat and soybeans met analyst expectations with 352,829 metric tons and 1,406,496 metric tons respectively. Corn inspections came in below the estimates reporting only 538,945 metric tons inspected for export. Analyst guesses ranged from 675,000-800,000 metric tons for corn.
Informa Economics will release its January crop estimate at 10:30 AM CST this morning.
The grains bounced in the overnight as traders see the possibility of increased demand after prices fell for four days in a row.
In the overnight session the grains are higher with corn up 6 ½ cents, soybeans up 11 ¾ cents and wheat up 10 ½ cents as we have moved past the holiday trade schedule into a more normal environment. The bounce this morning in the overnight comes after four straight days of selling pressure going through the New Year. Traders will be focusing and positioning themselves for the Grain Stocks report, the USDA Supply and Demand report and the Crop Production report which will be released at 11 AM CST on the 12th.
Another cold front is expected to push into the Midwest Wednesday night bringing low temperatures between -5 and -15 degrees Fahrenheit in the northern Midwest. Some snow is expected, but the 1-5 inches in the forecast will not be enough to adequately protect the wheat. Nearly 1/3 of the belt will be at risk of winterkill damage.
There have been fresh inquiries by China into buying U.S. DDG’s following purchases last month. In each of the last two years China has purchased over 4 million metric tons of DDG’s from the U.S. However, in late 2013 and early 2014 nearly one million metric tons of DDG’s were rejected by customs because of trace amounts of the unapproved GMO strain MIR-162. China has since approved the strain but many traders are still expecting a much larger down payment for DDG’s to be purchased and shipped to China.
The holiday-shortened week did little to move cash basis levels across the country even as futures prices drifted lower. Corn basis on average across the US was unchanged for the week while soybean basis slipped a penny.
In corn, basis levels found some modest gains in IA, MO & IL, but southern reaches of the Mississippi river terminals were slightly weaker. Overall, barge rates continue to inch lower and are now trading below historical norms for this time of year which is helping keep basis levels firm. For ethanol, basis changes were minimal this week at plant locations. But, a big drop in ethanol production for the week could spell the start of easing demand for corn from ethanol plants. Margins for ethanol manufacturing are quickly eroding in the face of ethanol prices plummeting, and are a $1 a bushel lower than the same time last year.
For soybeans, Gulf basis was off 9 cents a bushel as slowing export movement cuts into bids. River markets saw some modest movement lower as a result. On the Eastern Seaboard, basis levels jumped about 10 cents a bushel with plants in NC & MD gaining ground on slower farm sales.
Corn export sales are now ahead of the pace needed to meet USDA expectations.
The market is expected to open at 8:30 AM CST today. This morning there was a reportable sale of 210,000 metric tons of corn to Japan for the 14/15 marketing year.
Export sales were released this morning, delayed a day due to the New Year’s holiday. Wheat sales were reported within analyst expectations with 354,100 metric tons booked for 14/15 delivery over the last week. Corn sales beat analyst expectations with 895,100 metric tons which brings cumulative sales to 26.9 million metric tons which is now ahead of pace to meet USDA expectations. Soybean export sales were on the lower side of expectations only booking 611,000 metric tons. However, soybean sales have been running well ahead of pace in the first four months of this year’s marketing season, and has already booked 88% of the sales expected for this marketing year.
Ethanol production was released on Wednesday showing that weekly ethanol production dropped 20,000 barrels per day to 972,000 BPD from the marketing year high reported last week. Ethanol stocks increased 479,000 barrels to 18.09 million barrels which was the largest stocks number since October 10th. The decline in production is due to the holiday week, but is also beginning to feel the effects of declining ethanol crush margins. Over the last two weeks ethanol margins fell $1 per bushel and are now $1.50 below the crush margins last year during this time.
Cold weather looks to return to the plains late this weekend, but winterkill concerns during that event are relatively low. The middle of next week shows more risk of a winterkill risk with temperatures expected to usher in low temperatures between -5 and -10 across 2/3 of the wheat belt. Of the area effected, only ¼ of the northern region is protected by snow cover.
Look back at the most popular Feed & Grain content from 2014
New Years is a time to both plan for the year ahead and contemplate the year that’s past. Like all years, 2014 had its ups and downs, but ultimately Feed & Grain had a great year and we hope that all of our readers did too. The following is a list of the top articles and blogs of the year; in case you missed something or just want to reflect. Have a great new year and we look forward to helping you manage the high and low points in the year to come.
The grains are seeing some selling in the overnight as we move into the last trade day of 2014.
In the overnight session corn slipped ¾ of a penny, soybeans fell 5 ¼ cents and wheat fell 3 cents. Today is First Notice day for soybeans, soymeal and soyoil. First day deliveries included 20 contracts of soybeans, no soymeal and 1,143 contracts of soyoil which was well above expectations.
Last night, temperatures fell to as low as -20 in parts of the northwest plains with 1/3 of the winter wheat belt subject to the freezing temperatures. With only 1-3 inches of snow cover, winterkill damage has certainly occurred. Temperatures should ease over the next few days but by late weekend more low temperatures will put the winter wheat crop at risk throughout Nebraska and northern Kansas.
South Korea is disinfecting farms around the country in an effort to try to contain the spread of Foot-and-mouth disease and bird flu. Foot-and-mouth disease had been confirmed in the center of the country but a recent case just 30 miles out of Seoul has the country on alert.
In the overnight corn is trading 2 3/4 pennies lower, soybeans is down 2 3/4 cents and wheat is up 1/2 a penny after closing last week near one month lows. This weekend the Korea Feed association purchased 110,000 metric tons of corn from optional origin.
Soybean futures continued to erode this week giving up 14 cents a bushel while corn found modest strength in a 3 cent advance. In the cash market, basis movements were fairly muted this week with US average corn basis gaining 1 cent a bushel while soybeans added 2 cents to the US average...
In the overnight, soybeans and wheat traded lower slipping 5 ¾ and 5 ¾ cents respectively, while corn stayed mostly unchanged increasing by ¼ cent. The export sales report was very supportive for corn, neutral for wheat and bearish for soybeans which missed analyst expectations by a...