The cash market saw loses yet again this week with soybeans getting hit especially hard.
Corn continues to hold up as unseasonably strong export movement is holding basis up for the time being. On average corn saw basis losses of 1 1/4 cents per bushel. Ethanol plants are holding strong as well only off 1 cent. River facilities were the biggest loser in the corn market this week losing 3 1/2 cents.
Soybeans were off an average of 9 1/4 cents being heavily weighed down by crush facilities and river terminals. Crush facilities saw losses of 12 cents moving even lower from last week’s 23 cent drop. River terminals were hit the hardest this week off 22 3/4 cents per bushel. Potentially adding more pressure was the closure of three Mississippi River locks in southern Iowa and northern Missouri earlier in the week.
Grains saw negative movement this week giving up all of last week’s gains. Corn was off 7 1/2 cents, wheat down 6 1/2, and soybeans off 26 1/4 cents.
This week was marked by huge export announcements from the USDA. Export sales of 133,000 MT of soybeans for delivery to China and another 211,171 MT to Unknown for the 2016/2017 marketing year. For corn, there was a 1,577,340 MT deal to Mexico, with 1,036,320 MT for delivery during the 2016/2017 marketing year and 541,020 MT for delivery during the 2017/2018 marketing year.
On Monday, USDA reported that 15 percent of the US corn crop has been harvested, up from 9 percent last week but below the 5-year average of 19 percent. Likewise, soybean harvest progressed to 10 percent from 4 percent last week, but slightly below the 5-year average of 13 percent. Rains continue to slow harvest in the Eastern Corn Belt and should limit the pace thru the weekend.
The International Grains Council on Thursday cut its forecast for the 2016/17 world corn crop by 3 million tonnes to 1.027 billion, largely reflecting a downward revision for China. World wheat production in 2016/17 was upwardly revised by 4 million tonnes to 747 million driven by higher outlooks in Kazakhstan, Canada and China
China has given approval to at least two companies to export corn, trading sources said. In what could be the first bulk exports in a decade, the Chinese government has issued permits to two state-owned companies, top grains trader Cofco and major processor and trader Beidahuang, allowing them to sell grain abroad. The green-light was for around 2 million tonnes of corn to be exported by the state-owned companies. China last exported significant volumes of corn in 2006/07, when it sold almost 5 million tonnes.
In a surprise move, OPEC countries agreed to reduce oil production to 32.5 million barrels of oil per day from 33.4 million. Saudi Arabia, the largest oil producer, is expected to give up 350,000 barrels a day, according to a senior OPEC source quoting the final proposal. Other OPEC nations are expected to lower production too, though more details were not immediately clear. Three countries are exempted from the production cuts: Iran, Nigeria and Libya.