Grain Markets Update Week Ending 12-22-2017

Grain Marketing

Market Overview:

Grains found only modest cheer heading into the Christmas holiday weekend as a modest lift helped nudge corn and wheat off the weak prices from last week while soybeans sunk to a 3-month low. Weekly changes were corn up 5, Chicago wheat up 7, Kansas City Wheat up 5, but soybeans were off 18 and Minneapolis wheat down 8.

Friday saw soybeans reverse their 7-day losing streak but the trade continues to focus on near-ideal weather in South America. Weekend showers are forecast for Argentine crop belts, which on top of recent rainfall has eased concerns about drought in the world's third-largest soybean exporter. In Brazil, government forecaster CONAB this week pegged the crop at 109 MMT slightly higher than USDA’s estimate of 108. As traders look for next year’s US acreage to be near record-high this spring at 90 million, it is getting hard to justify prices when US carryouts should balloon north of 500 MB.

On the export front, this week’s USDA tally sheet showed robust deals for all three commodities. Wheat sales were 796 TMT which brings total sales so far this year to 18.8 MMT, off of last year’s pace of 20.2. Corn sales were at 1.5 MMT this week lifting annual YTD sales of 25.3 vs 34.3 last year while bean sales topped 1.7 MMT putting annual volume at 39.5 vs 46.9 this time last year. Soybean pace is certainly the most discouraging with this year’s pace 16% less than last year but USDA expects soybean sales to be 2% higher on the year.

 

National Cash Market:

In the cash market, basis levels were slightly firmer with US soy basis up 3 cents on the week helping reverse some of the futures selloff while corn basis inched up a penny.

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For both commodities the driver of strength was the river market regions along the IL/OH river. Soybeans saw an impressive 6 cent gain on average across river markets this week with double-digit gains occurring at some key markets on the IL & OH river. For corn, basis was up 2 cents on the river terminals.

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End users, however, where more content with their positions going into the long holiday period. Ethanol plants were unchanged as a group. Cargill Eddyville dropped their basis 7 cents on the week, but in nearby NE, ADM’s Columbus plant lifted basis 7 cents for a quick ship deal. For soybean plants they were up a modest 1 cent on the week. Strong gains were noted at Bunge’s Cairo, IL plant with a 9-cent gain and ADM’s Quincy, IL plant up a dime.

 


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