November 5, 2013
Grain Marketing Specialist
Corn looks to be trading steady in early going. December corn closed down 1.0 yesterday in a narrow pre-report 3.5c trading range. Outside markets saw DJIA at 15571 up 29 at 4:12 Central Time, crude and gold were little changed. Harvest progress was reported at 73% up 14 on the week. This is 2% above average in spite of the late start we got off to. Cargill announced it is opening the Ft. Dodge IA 150kbu/day ethanol plant it bought from Tate and Lyle in 2011 as ethanol margins continue to be strong. Export demand is now pulling on supply as well with 31.3mbu shipped last week. Big crop still must be pried out of the farmers hand as adequate storage, abundant cash flow, and prices ½ of last year leave him an uninterested seller.
Soybeans: 2 Higher
Beans are slightly higher this morning. Big export inspections again this week, with another 81 mbu pushed out, Last week was 85 mbu. China accounted for 60 mbu all by themselves. Harvest progress comes in at 86% complete, as 90% was expected, so we continue to lag there. Rains slowed progress last week, and the central belt is expecting rains again this week, stretching remaining harvest out. Friday at 11 am, is the USDA Crop Production report, and expectations are for crop size to increase. Perhaps that increase is already in the marketplace. Market structure still has the market inverted, and the pipeline will still want beans to be put in the pipeline.
We saw a nickel lower start to the week for the wheat futures on poor technical signals and drying up of export business. Weekly Export sales only tallied 7.1 mbu vs the 17-21 expectations and recent weekly totals of 17ish. The YTD inspections now total just less than 600 mbu, though that’s 180 mbu more than last year’s YTD number. Slowdown in exports shouldn’t really come as a big surprise given the capacity being covered by corn/soybeans and high freight which is discouraging wheat from making it to an export location. A couple of the global highlights were Saudi Arabia buying 720K MT of optional milling wheat and the Ag Attaché clipping 3 MMT off the Chinese wheat crop expectations to 188 MMT. Deutsche Bank started their roll today moving to the Dec 14, while Goldman roll will start on Thursday. Winter wheat conditions inched up to 63% good/excellent versus 61% last week, though realistically the only correlation to good fall conditions is reduced abandonment next year, but it’s a start. USDA also estimating 91% of the wheat crop has been planted. Missouri and Arkansas lagging slightly at just 2/3’s completed. Kansas estimated at 96% complete as the Nov 1st planting insurance date has passed.