The grain market gave back some of Wednesday’s gains in the overnight session, with corn down 5 1/4, soybeans down 6 1/2 cents, and Chicago wheat off 8 cents.
Corn futures traded lower in the overnight session, with little new demand side information to help firm prices. This morning’s export sales report was well below analyst expectations, with just 593,600 tonnes of corn sold for the current marketing year. It has yet to be seen if the move higher in corn prices this week has any staying power. While export sales missed the mark this week, yesterday’s EIA ethanol production report confirmed that domestic demand remains strong. The table below shows weekly ethanol production compared to last year. Ethanol crush margins currently sit at some of the highest levels since November 2011 which should continue to support basis at ethanol facilities across the grain belt.
Soybean futures traded lower in the overnight session on light news. This morning’s exports sales report was below expectations for the current marketing year, with just 805,000 tonnes reported sold. Traders were expecting between 900,000 and 1,200,000 reported sold for 2013/14. From a technical aspect, $13.11 is shaping up as an important technical level for January soybean futures as the market has traded lower but found buying interest there the last two days. A close below $13.11 could signal that this soybean market is ready to make a leg lower.
Wheat was pressured in the overnight session by a Stats Canada report which projected the largest Canadian wheat crop since 1990, up 38% year over year. At 37.5 million tonnes this was well above even the highest private analyst expectation and raises concerns about US competitiveness with Canadian production ramping up. Further pressuring the wheat complex today will be reported export sales of 229,200 tonnes, coming in below analyst expectations. Look for technical support around $6.50 on March Chicago wheat futures in today’s trade session.