Grain prices, futures retreat

U.S. cash grain and soybean contracts drifted lower Tuesday, sinking in step with declines in the futures market amid the absence of cash supply movement. Cash basis levels held steady as most of the market activity for spot supplies was for delivery of inventory that was contracted weeks or months ago.

The steady basis is not a surprise in this type of market environment, with no fresh demand push, as end users don't have a great need for additional supplies with contracted sales moving to elevators, said Dave Marshall, independent marketing adviser and commodity broker.

Spot bids are moving with futures, as farmers who anticipated cash flow needs in January forward booked sales in the fall, allowing them to take advantage of a carry in the market and shift income from the 2010 tax year to 2011, Marshall said. A lot of action at elevators was from producers picking up checks rather than delivering grain, he added.

Cash sources said there is not a lot of movement of supplies, with end users unwilling to bid up prices with forward-booked contracted sales filling the local supply pipelines. Farmers were not presented with any incentives for additional sales, with broad-based losses reported across grain and oilseed futures markets Tuesday. Corn and wheat futures slid two percent and soybeans were down nearly one percent in value Tuesday. Read more...


This blog is written by Martin Little The Global Miller, published and supported by the GFMT Magazine from Perendale Publishers.