Weekly grain report

Byron Behne watches the grain markets for the Odessa Union Warehouse.

2/10/12: Chicago futures closed down 16 cents Friday, however white wheat again faired very well in the face of that pressure. Since Thursday’s report, wheat futures have lost 30 cents and corn futures are down a dime. White wheat prices have followed corn prices much more closely, which isn’t surprising, since much of the export business done recently has been feed.

The only significantly bearish item on the supply-and-demand report was that world wheat ending stocks were increased by 3 million metric tons on a production increase in India and cuts to demand. U.S. wheat ending stocks were cut almost 50 million bushels, with 15 million of that being white wheat due to increased exports. Prices had been on a good run going into the report, so perhaps the numbers weren’t bullish enough to generate any further enthusiasm. However, futures spreads – the price increase between contracts going further out into the future – have narrowed considerably during the rally and even the last two days’ decline, which is an indication that demand remains strong.

2/13/12: Grain futures came out of the gate hot on Monday, with wheat, corn and soybeans all posting solid gains. Egypt bought U.S. soft red wheat over the weekend, which I believe is their first purchase of U.S. wheat on a public tender since harvest. There were no Russian or Ukrainian offers, which is odd but probably validates the rumor that their export terminals are empty and awaiting shipments from the country to be refilled. The extreme cold temperatures they’ve been dealing with have made shipping extremely difficult. Greece also passed some of the spending cuts required to keep them in the EU bailout package, which had everyone feeling good for at least a day. Prices faded during the session but blasted higher on the close, as Chicago March wheat finished up 11 cents and white wheat added a dime.