USDA cut its estimate for the U.S. corn harvest for the fourth time due to stressful summer weather, and the government's forecast for U.S. corn supplies at the end of marketing year on Aug. 31, was dragged down to a 15-year low. Federal forecasters also trimmed soybean supply forecasts to a precariously low level of 140 million bushels. The supply data propelled cash prices in unison with soaring futures prices.
However, despite the spike in prices, there wasn't a great deal of additional activity in the cash market beyond already contracted movement of supplies, said Dave Marshall, independent commodity broker and adviser. Cash basis levels showed some weakness, with corn lower and soybeans basis declining 7 cents for soybeans in St. Louis, Marshall said.
End-user buying remained subdued, as the market digests fresh supplies already filtering into the cash pipeline in the past week. Producers sold sizable amounts of grain last fall for delivery in January, and the delivery of the inventories has pressured basis levels at interior elevators and river terminals. The initial push to limit up levels in the futures market sent many end users to the sidelines, awaiting lower prices, particularly if they weren't looking for immediate needs, Marshall said. Read more...
This blog is written by Martin Little The Global Miller, published and supported by the GFMT Magazine from Perendale Publishers.
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