|
|
|
|
21 Nov 2008 09:49 EST US Cash Grain Outlook: Corn Prices Exceed 1-Year Low
By Gary Wulf
Of DOW JONES NEWSWIRES
CENTRAL CITY, Neb. (Dow Jones)--Cash corn prices had fallen to their lowest level in almost 13 months throughout the U.S. interior Friday, as crumbling futures buried fractionally firm basis premiums.
The Minneapolis Grain Exchange said 2,604 grain elevators, ports, terminals, warehouses and buying stations surveyed for the exchange's national cash price index found those facilities bidding an average of just under $3.35 per bushel for corn as of the close of business Thursday, representing the most depressed level seen since Oct. 25, 2007. U.S. cash corn prices have now dropped $1.05 in 7 weeks.
"The demand for corn is almost non-existent, and the only really bullish factor right now, is there is a tight [cash] supply in some parts of the country," said Linn Group analyst Jim Riley.
That tightness - caused by a reluctance of farmers to sell into a depressed market - helped to strengthen interior corn basis by an average of 3/4 cent per bushel Thursday, although that small gain was completely overwhelmed by a 15-cent plunge in Thursday futures.
Basis analyst Kevin Mcnew notes that corn basis has strengthened by an average of 1 1/2 cents during the past week.
"With futures showing few signs of rallying, look for basis levels continue to climb to encourage supplies into the pipeline," he said. "Lower fuel costs also will help keep interior basis levels strong."
Domestic basis for soybeans (+1 1/2 cents) and soft red winter wheat (+2 3/4 cents) had also appreciated Friday, although premiums paid for hard wheat and sorghum had declined by 1/2 to 2 1/2 cents from levels reported early Thursday.
Grain futures were weaker once again overnight, registering additional losses of some 2-5 cents in cash-contracts for all commodities.
"Continued economic uncertainty will keep prices on the defensive and further price erosion could happen if the credit crisis more directly affects the world grain trade, which it will eventually," said Benson Quinn Commodities analyst Kevin R. Kjorsvik.
National cash price indices maintained at the Minneapolis Grain Exchange currently stand at $7.99 1/4 for soybeans, indicating an average basis of -56 3/4 cents relative to the Thursday settlement for January CBOT soybean futures. Domestic cash prices also average $3.34 3/4 for corn (-29 cents basis December CBOT corn), $4.82 for hard red winter wheat (-66 1/4 cents basis KCBT December wheat), $3.56 for soft red winter wheat (-$1.55 3/4 basis CBOT December wheat) and $6.09 1/4 for hard red spring wheat (+5 cents basis MGEX March wheat futures).
CROP WEATHER
Clear weather dominated the vast majority of the U.S. grain belt Friday - aside from rain in far southern Texas and scattered snow showers from the Great Lakes to the Carolinas.
"Pockets of dryness remain a concern with respect to Northwestern winter grain establishment," said USDA agricultural meteorologist Brad Rippey.
Late-season harvesting of corn, soybeans and grain sorghum continues in most areas of the U.S.
"Southeastern fieldwork, such as cotton and soybean harvesting, is largely advancing, but cold weather has slowed winter wheat emergence and development," noted Rippey.
-By Gary Wulf; Dow Jones Newswires; Gary.Wulf@dowjones.com
(END) Dow Jones Newswires
November 21, 2008 09:49 ET (14:49 GMT)
|
| |
|