Corn prices. The market was entirely under the influence of the March 1 stocks report from the prior week, and continued the losses which removed $1.06 from the value of May futures. But the basis remains strong and processor-delivered corn was +40¢ over May. The acreage report, which projected expected numbers, still cut 35¢ from the value of Dec corn. Processor bids for fall corn take off another 25¢. With a -25¢ basis now, your marketing plan should protect against a deeper basis with a large crop. The continuation of cool, wet weather across much of the Cornbelt will soon begin to be felt by the market as a reason for planting delays and reduced yields. So far that has not been a significant factor, but with rain predicted for the current week, planting will shift beyond the April 15 date for the greatest yield potential.
Corn inspected for export the prior week totaled over 19 mil. bu. USDA also reported 14 mil. bu. in old crop sales and barely over 1 mil. bu. in new crop sales. As of Thursday, USDA reports 22 mil. bu. were shipped in the current week. There were rumors of China looking for corn bids, but US corn is still priced at a premium to new crop supplies available from Brazil. With corn planting continuing to move northward, some farmers are wondering if poor-looking wheat stands may yield more money than corn with higher wheat and lower corn prices. While that calculation would not pan out with the stronger basis in the heart of the Cornbelt, it could in marginal areas and that could result in fewer acreage shifts from wheat to corn.
Ethanol production rose marginally, but is above the level of 90% of 2012 production which USDA projects for the current marketing year. Late week action saw traders consolidate ahead of the April Supply and Demand Report, which is set for Wednesday. The issues in that report are how the USDA will handle the additional grain found in the March stocks report. However, in past years, USDA made those adjustments in June. Informa Economics raised its projection for the 2013 global crop to 976 mmt, compared to the 851 mmt produced in 2012. Part of the increase was due to higher corn production expected for China in 2013.
1) May 13 corn closed at $6.29, down 1¢ for the day and down 67.75¢ for the week.
2) Dec 13 corn closed at $5.35, down 5¢ for the day and down 3.5¢ for the week.
Soybean prices. Soybean prices have moved in sympathy with corn, losing 99¢ since the USDA’s acreage and stocks reports. While those numbers were not bearish for soybeans, the drop in corn prices means soybean buyers don’t have to pay as much to ensure there is sufficient acreage to guarantee enough of a crop. A speed-up in loading at Brazilian ports has also contributed to the weakness in prices. After losing several shiploads of soybean orders to Argentina, Brazilian port officials saw the writing on the wall.
The US is still exporting some soybeans, and inspections totaled 16 mil. bu. for the prior week, but not the 50-60 mil. bu. orders filled weekly earlier this year. Current week exports were reported at 17 mil. bu. with old crop sales at 14.4 mil. bu. and new crop sales at 13 mil. bu. Some of the cut back has been due to tight supplies, and while USDA found 1 bil. bu. of soybeans on hand at the first of Mar. 98% of USDA’s projected export sales for the marketing year have already been contracted. But, it was a huge week for product exports of 339.9 mil. lbs of soybean oil and 1.232 mil. tons of soybean meal.
Decatur processor offers a +44 basis bid over May futures to obtain beans. Both beans and corn may see much higher cash bids than futures prices due to tight stocks. Keep an eye on the bird flu issue in China, which could have a detrimental impact on grain purchases if China has to reduce infected pork and poultry numbers. Informa Economics estimated the global soybean crop in 2013 at 276 mmt, compared to 268 mmt last year, but that is a slight drop due to fewer soybeans to be produced in China in 2013 and a slight drop for Brazil. Both Brazil and the US are forecast at just over 3 bil. bu.
Source: Farmgateblog
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