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US Cash Grain Review: US Cash Grain Stocks Increase168 days ago
By Tom Sellen
Of DOW JONES NEWSWIRES
KANSAS CITY (Dow Jones)--Commercial inventories of U.S. cash soybeans dipped, but corn and wheat supplies grew, resulting in a net increase in grain stocks.
Grain stockpiles have now filled 57% of the nation's bins to capacity, up slightly from 56% last week, the U.S. Agriculture Department said Tuesday in its weekly Grain Stocks report.
Soybean stocks fell to 7.426 million bushels in the week to Tuesday, from 9.108 million the previous week. Corn stocks increased to 63.61 million bushels from 62.15 million, while stockpiles of wheat increased to 214.18 million bushels from 210.67 million last week.
The net increase in stocks coincides with the lack of grain movement in the country, as farmers remain tight-fisted with their corn and also with what few soybeans they have to sell, merchandisers and analysts said.
Interior soybean basis - the difference between the cash price and the nearby futures contract on the Chicago Board of Trade - appreciated an average of 2 3/4 cents a bushel as of Tuesday morning, while corn basis was flat. Hard red winter wheat basis edged down by 1/4 cent, soft red winter was down 1/2 cent and hard red spring basis strengthened by 1 3/4 cent a bushel.
Soybean basis continues to strengthen on worries over an early frost this year with crop maturity lagging the five-year average. Strong Chinese demand has also buoyed the market. The soybean crop improved to 69% good to excellent, up 3 percentage points from last week.
Corn maturity also lags because of a wet spring and a cooler-than-normal summer, with just 57% in the dough stage of development compared with the 79% five-year average.
One Iowa-based merchandiser said there is very little grain movement, as farmers are mostly sold out of soybeans and are sitting on their corn stocks waiting for higher prices. "With the large corn and soybean crops in the fields, storage will be an issue this year," he said.
Jack Scoville, analyst and vice president at Price Futures Group, agreed there aren't many soybeans left to sell, though the market needs the commodity.
"This market clearly wants soybeans but there just aren't many to sell," he said. The need for soybeans is evident as soybean basis strengthens and corn remains nearly flat.
CBOT futures fell, with December corn down 8 3/4 cents to $3.26 3/4, November beans lost 8 1/2 cents to settle at $9.99 and soft red wheat for December delivery edged down 1/2 cent to $4.98 3/4.
In export news, China bought 110,000 metric tons of U.S. soybeans for 2009-10 delivery.
Egypt is tendering for 55,000 to 60,000 tons of wheat on a free-on-board basis for Sept. 21-30 shipment.
Showers and thunderstorms spread into areas west of the Mississippi River Tuesday, maintaining mostly favorable soil moisture for late developing corn and soybeans. Across the remainder of the Midwest, warm, dry conditions are promoting crop growth, said Brad Rippey, USDA agricultural meteorologist.
The wheat harvest on the northern High Plains advances with favorably hot, dry conditions.
A slow-moving cold front will generate showers and thundershowers from the Great Lakes to the central Plains over the next few days, Rippey said.
In the National Weather Service six- to 10-day outlook, drier-than-normal conditions across the upper Midwest will contrast with near- to above-normal rainfall elsewhere.
-By Tom Sellen, Dow Jones Newswires; 913-322-5177; tom.sellen@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=qfqGwzzRL07xEZkd3yNjoA%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
August 25, 2009 15:26 ET (19:26 GMT)
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