FOB Gulf Grain-Soybean basis steady as futures soar

CHICAGO, May 21 (Reuters) – U.S. FOB Gulf soybean basis offers were steady to firm on Wednesday after Chicago futures soared late on talk of Chinese demand for new crop and tight U.S. stocks before harvest, traders said.

* Corn and wheat basis was also steady with corn supported by continued good export demand and wheat by the erosion in futures which exporters hope will revive demand before winter wheat supplies hit the market in the next month.

* CBOT July soybeans closed 35-1/2 cents higher at $15.05-1/4 a bushel with spec buying piling late in the day, Chicago traders said. Talk that domestic supplies will remain tight into harvest even with cheap South American cargoes landing soon sparked buying as did continued strength at major U.S. processors. China has backed off buying old-crop soybeans due to price but has been booking old-crop soyoil.

* FOB June/July soy offers were 90 cents over July futures, respectively, while October/November were 116 cents over November futures – all unchanged.

* CIF soybeans also remain firm on Wednesday reflecting a strong interior market.

* FOB corn offers stayed steady underpinned by slow country movement with farmers busy with spring planting. CBOT July corn closed up 1 cent at $4.74-1/2.

* FOB corn June and July loadings were quoted unchanged at 85 over CBOT July futures.

* Demand for U.S. corn remains steady with Argentine and Brazilian new-crop supplies not due in export channels in large numbers for a while yet.

* HRW and SRW wheat basis was unchanged as futures dropped again with recent rains aiding crop conditions. CBOT July closed 6-1/4 lower at $6.64-1/4 while KC July wheat fell 6-3/4 to $7.61-1/2.

* Southern hemisphere wheat is now more competitive than U.S. wheat. Additionally, Black Sea wheat was restraining U.S. values. The lack of any risk premium into Ukraine wheat despite the continuing tensions with Russia and NATO over Ukraine continued to surprise the market, traders said.

* Egypt at its tender last Friday bought only one cargo which was Ukraine, sending the market a message about U.S. prices.

* FOB SRW wheat was offered at 70 over July futures for first half June and 68 over for last half. But nearby offers were thin given tight loading capacity at the Gulf. July offers were also unchanged at 60 over, reflecting new-crop supplies.

* HRW values were unchanged with some offers of 155 over KC futures for the last 10 days of May. June was offered at 148 over and July at 145 over futures.

* Traders waiting news of China’s corn auction to sell 1.0 million tonnes from reserves on Thursday.

* Trade estimates for USDA’s weekly export sales report on Thursday (in tonnes):

Trade estimates

Trade estimates

for 2013/14

for 2014/15 Wheat

50,000-250,000

150,000-300,000 Corn

325,000-525,000

50,000-200,000 Soybeans

(-150,000)-100,000

500,000-700,000 Soymeal

25,000-150,000

50,000-200,000 Soyoil

0-20,000

0-10,000 (Reporting by Christine Stebbins; Editing by David Gregorio)

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