Morning Market Review by Bryce Knorr
Futures are trading higher this morning, abruptly reversing profit-taking declines after news Ukraine was banning wheat exports after Nov. 15. Though the news was not unexpected, it raised hopes that U.S. sales will finally pick up.
Corn is following wheat higher today, rekindling yesterday’s rally with new highs for the week. Higher wheat costs could price more of that grain out of the feed supply chain, an important consideration as the livestock industry searches for the least cost ration in an expensive market.
South Korea, for example, filled only 45% of a tender for corn, buying 2.5 million bushels of U.S. and South American origination, while also picking up 2 million bushels of feed wheat. Japan already shifted its rations, with the percentage of corn used dropping to 20-year lows. As a result, U.S. Export Sales continue to lag, totaling only 6.6 million bushels in the latest week, less than half the rate forecast by USDA for the marketing year.
Still, with harvest winding down, bin doors are shutting tight, causing considerable strength in the western Corn Belt. For more, see my Weekly Basis Review. To check tends in your area, see the Cash & Basis Charts pages.
Storms are focusing on the Great Lakes today, which could continue to slow harvest in Michigan. Volume rose 57% on yesterday’s rally, but remains thin at 204,342, according to the preliminary report from the CBOT. Open interest was up 13,216 on fund buying.
Overseas prices were mixed today. Futures on the Dalian exchange in China posted fractional losses before the Ukraine news broke, while corn in Paris is 1.25% higher.