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Weekly Cash Comments

Cash Commentary-

Corn grain basis was unchanged for the week, while soybeans posted a 2-cent advance.

In corn, basis levels were up one-cent a bushel at the Gulf export market, but river terminals were on average unchanged for the week. Barge rates dipped slightly on the week but did little to stimulate the river basis levels. For ethanol plants, basis levels were off 1-cent a bushel on average as strength in the corn futures market in the past week has helped keep pipeline supplies adequate.

For soybeans, basis levels improved for the first time in nearly 6 weeks. River terminals were up 6 cents a bushel with the Gulf export market posting a 7-cent advance. For soybean crushing plants, basis levels were up 4 cents a bushel in the past week.

Futures Commentary-

The grains were mixed this week with soybeans and corn both gaining, while wheat fell 12 3/4 cents for the week ending Thursday 27th. Corn showed relative strength improving 17 3/4 cents, while soybeans increased 12 3/4 cents. Traders are eyeing two major reports including the Planting Intentions report scheduled for release at 11 AM CST on Tuesday the 31st.

Lanworth released their latest planted acreage forecasts this morning raising its U.S. soybean seeding's estimates to 85.5 million acres and its U.S. corn planting estimate to 88.2 million acres. This compares to Informa Economics estimates of 88.5 million acres of corn planted and 87.5 million acres of soybeans planted in the 2015 growing season.

Wheat was unable to continue its move higher after an improvement in crop conditions in the plains states. Kansas wheat good to excellent winter wheat ratings were unchanged from the previous week at 41 percent, Oklahoma increased 4 percent to 44 percent good to excellent and Texas improved 4 percent to 55 percent good to excellent. Patchy showers are expected over the plains in the 6-15 day outlook which should provide very limited relief to the parched soil. Russia's weather stressed crop looks to receive more moisture over the next week as rains expand across Europe, Ukraine and into Russia.

Weekly export sales were strong for soybeans which booked 505,808 metric tons, up 48 percent week over week. This beat analyst expectations which ranged from 100,000-300,000 metric tons. The market has been looking for soybean export sales to taper as Brazil harvest is over halfway complete. Major buyers this week included Indonesia, China, Germany and the Netherlands. Soybeans have cumulative export sales of 48.5 million metric tons which is well ahead of last year's pace of 44.4 million metric tons.

Corn sales were on the low side of expectations this week booking 435,000 metric tons compared to expectations of 400,000-600,000 metric tons. This week's sales were down 13 percent from the previous week and did little to help along the overall pace of exports this year. So far cumulative corn sales have totaled to 37 million metric tons which is still ahead of the 34.7 million metric tons needed at this time to meet the USDA expectations.  China purchased 60,800 metric tons this week which is the largest weekly purchase in nearly a year.  China has turned to Ukraine to source corn importing 574,000 metric tons in February, up nearly 200 percent from last year. In January only 13,663 metric tons of U.S. corn was imported into China which was down 93 percent from last year.

Wheat sales were reported at 102,000 metric tons this week down 74 percent from last week and a marketing year low for the grain. Expectations were for sales between 200,000-400,000 metric tons. The strength in the U.S. dollar continues to weigh on wheat export sales.

This week's EIA ethanol production report showed an increase in output by 6,000 barrels per day bringing weekly production to 953,000 barrels per day. This is the 3rd straight week of ethanol production increases despite the lagging energy sector. Seasonally, it is normal to see an increase in ethanol production from March through June. Ethanol ending stocks were also increased this week by 497,000 barrels per day to 21.32 million barrels.

Brazil's Agroconsult increased their soybean crop estimate to 95.8 million metric tons from 94.7 million in their previous forecast. Brazil soybean harvest is 61 percent complete which is about 4 percent behind last year. Dry conditions recently has helped move along harvest, but light precipitation over the next few days may slow the pace temporarily. Precipitation should clear by early next week to provide more opportunity for harvest.

 

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