Cash grain prices jump as processors bid for supplies

Cash prices for US grains and soybeans rose Thursday as buyers scrambled to snap up limit inventories. Users of the crops, such as processors and ethanol plants, continued to raise purchase bids in an attempt to secure supplies, traders said. Farmers remained reluctant to sell because of projections for prices to rise above already lofty levels.

Cash and futures prices for grains have climbed this spring on concerns about strong demand draining supplies. Basis levels, or the difference between cash prices and futures, "continue to be quite firm," said Dave Marshall, an independent commodity broker in Illinois. "You still have some reasonably good underlying demand, particularly in the processing industry," he said. Read more ...

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

U.S Cash grain bids rally

U.S. cash grain bids rallied following U.S. Department of Agriculture supply forecasts pointing toward very low year-end corn and soybean inventories.

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.

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.