The grains turn lower in the overnight session with only two days left to trade in 2014
In the overnight session corn traded down 3 ¼ cents, March soybeans slipped ¼ cent and wheat fell 5 ¾ cents as it tests the 20 day moving average on the daily chart. This morning a reportable sale of 157,500 metric tons of corn was sold to Mexico for 14/15 delivery.
Wednesday the 31st is the first notice day for January Soybean, Soyoil and Soymeal contracts. To avoid delivery make sure all long positions have been liquidated by the close of trade today. Thursday January 1st, the market will be closed. Trading will resume on Friday at 8.30 AM CST. The USDA will release the weekly export sales report on Friday January 2nd.
Weather in the U.S. will be monitored closely by wheat traders as a cold blast from the north brings temperatures below zero in much of the plains region. Snow accumulation of 1-3 inches will help insulate some of the crop from the harsh temperatures, but 1/3 of the winter wheat crop will be at risk of winterkill tonight.
South American weather is continuing to provide adequate moisture for crop development. Argentina corn crop is 60% planted which is 5.5% behind last year’s pace due to excess moisture which has slowed progress. The two week weather outlook anticipates normal rainfall to continue benefiting crops in this region.
The grain markets are mixed this morning with light trade volume expected on this holiday shortened trade session.
In the overnight session corn traded ¼ cent higher, soybeans is down 4 cents and wheat in Chicago is down 3 ½ cents. The market closes early today at 12:00 CST today and will reopen at 8:30 CST on Friday morning.
A cold front is moving into the plains region on New Year’s Eve providing a threat of winterkill throughout the winter wheat producing states. New snowfall is expected between 1-2 inches in most of the area, but possible sub-zero degree temperatures may threaten some of the wheat crop. Confidence on this event is still relatively low.
Southern Brazil is likely to see heavy rains over the next 10 days which should then make its way north keeping crop concerns low throughout the country. Argentina is expected to get precipitation in the north and north eastern parts of the country, with another rain event expected next week which should provide relief to some of the dryer areas of the country. The driest areas currently include central and southwest Cordoba, western Buenos Aires and La Pampa which accounts for about 15-20% of corn and soybean production. The rains next week should provide relief to nearly half of the driest areas.
The head of Russia’s Grain Union said Russia may not be able to supply wheat to Egypt’s GASC in January due to the export curbs now existing in Russia. GASC’s Mamdouh Abdel Fattah responded by stating “Traders have to abide by their contracts.”
Shipments have been arriving in Egypt regularly each month in the 2014 calendar year
This week’s U.S. Grains Council’s (USGC) Chart of Note illustrates the significant market share that U.S. corn has regained in the Egyptian market compared to last year.
Following the United States’ record 2013 corn production of 355.3 million metric tons (13.9 billion bushels), U.S. corn sales to Egypt rebounded to more than 3 million tons (118 million bushels) from January to November 2014, compared to almost nothing during the 2013 calendar year. As the chart shows, this has made the United States the largest supplier of corn to the Egyptian market this year.
U.S. corn has been arriving in Egypt regularly each month in the 2014 calendar year, with no Ukrainian corn or other Black Sea-origin corn coming in during the summer months. However, Black Sea-origin corn did come in this fall as new crop Ukrainian corn became ready for export.
The Council will work to carry this momentum into 2015 as the predicted record 2014 U.S. corn crop of more than 365 million tons (14.4 billion bushels) hits the export channels.
The wheat market has priced in the effects of a Russian export duty last week, but talks of cold temperatures with limited snow cover over the next two weeks has traders on edge.
The markets were mostly mixed in the overnight session with corn down ¼ cent, soybeans down 4 cents on the January contract and wheat up 3 ¼ cents higher. The U.S. made a wheat sale to Taiwan for 78,320 metric tons of milling wheat for delivery between February and March 2015.
Next week will usher in colder weather which may threaten the winter wheat areas throughout the U.S. There is potential for temperatures to dip below zero in in Nebraska, Colorado, Kansas and Missouri which could leave winter wheat areas vulnerable with limited snow potential over the next few weeks to help.
The wheat market was unable to rally yesterday despite the news that Russia will be imposing an export duty. The market seemed to view this headline as justification for the rally throughout last week and not as fresh bullish news. Traders have mostly factored Russia out of the export scene for now leaving the market to sort out the relatively high price for U.S. wheat. Domestic wheat is trading around $30 per metric ton higher than Europe, Russia and the Black sea.
Yesterday, export inspections were released with all grains beating analyst expectations. Soybeans recorded 2,234,262 million metric tons while analysts expected between 1.5 and 2 million metric tons. Wheat recorded 442,055 million metric tons inspected which was well above the high side of expectations at 400,000 metric tons and corn recorded 790,415 metric tons inspected for export with analysts expecting between 575,000-700,000 metric tons.
The wheat market is trading higher again this morning with more news out of Russia that it will introduce an export duty. The restrictions of exports has been largely factored into prices so be wary any immediate move higher this morning.
Corn and soybeans are trading lower by ½ a cent and 3 cents respectively, while wheat is trading up 3 ¼ cents on more export news out of Russia. A reportable sale of 166,600 metric tons of corn was reported this morning to be delivered to unknown destinations for the 14/15 marketing year.
This is a holiday shortened trade week with Wednesday observing an early close at 12 CST. Thursday the grain markets will be closed for Christmas and Friday the markets open at 8:30 CSTwith a regular close. Volume is expected to be light which can allow for unexpected price movement.
Over the weekend, the Egyptian state grain buyer GASC announced it had bought 300,000 metric tons of wheat from France and Russia. Out of the tender France won a majority of the sale booking 240,000 metric tons of wheat. According to Interfax news agency, Russia is planning on imposing a grain export duty. It is widely believed by the market that Russia is for the most part out of the export scene, but the export duty represents a more formalized trade restriction.
Rains over the weekend continue to help crop development in Argentina and Brazil, giving the market little reason to be concerned about South American production.
In the overnight the grains traded higher with corn up ¼ of a cent, soybeans up 3 ½ cents and wheat up 6 ¾ cents going into this morning’s pause. Wheat seems to be bouncing higher this morning after holding a major support level of $4.92 ¼ which was the low back on February 2nd. Today is...
In the overnight session the grains traded mixed with corn and soybeans up 2 ¼ each and wheat trading 1 ¼ cent higher going into the morning pause in trade. Today is the last day to get out of any March grain contracts with first notice day Friday the 27th.
The grains are moving lower this morning with corn down a penny, soybeans down 4 cents and wheat in Chicago down 3 ½ cents. Yesterday’s rally in Soybeans sparked some farmer selling after prices rose sharply to an intraday high of $10.29. Keep a close watch on corn today as it trades next...