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US Cash Grain Review: Movement Remains At Trickle166 days ago
Cash grain movement has been reduced to a trickle as producers keep a tight hold on supplies in the event of a crop problem this fall, brokers and analysts said.
Marketings are nearly at a standstill, even as end-users raise prices in a scramble to lock down supplies, thus strengthening soybean basis levels across the nation.
"Cash sales have been extremely hard to come by," said one northeastern Illinois merchandiser.
Normally, producers would be selling more grain as the crops mature in the fields to make room for the upcoming harvest, but this year is different.
"Farmers are not selling on ideas the crop may not be as big as the government thinks," the merchandiser said.
In addition, a wet spring and cool summer has left corn and soybean maturity below five-year averages, putting the crops at risk for an early frost. Cooler-than-normal temperatures at this stage continue to pressure crop development.
Chicago Board of Trade futures closed mixed, with December corn rising off its lows to settle at $3.29 1/4, up 3 cents on the day. November soybeans lost 1/2 cent, to settle at $9.96 a bushel. December soft red winter wheat fell 3 3/4 cents to $5.03 a bushel.
Soft red winter wheat basis at the Gulf of Mexico strengthened, lifted by export demand from a sale of 60,000 tons to Egypt on Wednesday and stronger-than-expected weekly export sales on Thursday, a trader said.
U.S. wheat sales totaled 652,700 tons, a marketing year high and above expectations for 300,000 to 500,000 tons, the USDA said.
Japan bought 160,000 tons of wheat on Thursday, with 97,000 tons coming from the U.S.
Gulf soybean basis was unchanged, as values took a breather after appreciating significantly this week on weather worries and strong export demand from China. Corn basis at the Gulf was flat to 1-2 cents lower, following its weak trend.
Crop development will continue to lag the five-year averages, especially corn, due to below-normal temperatures, said Bryce Anderson, DTN meteorologist.
Corn and soybeans will be more vulnerable to an early freeze this year, though it is still too early for a large freeze event. The cool conditions, however, will keep crop development behind schedule for the next few days, he said.
Moderate to heavy rainfall in the Midwest will also slow crop maturity and will increase disease risk to soybeans.
Warmer conditions are expected to arrive in the Midwest next week, with mild weather also encompassing the Canadian Prairie. This keeps the frost threat out of the Midwest, said Anderson.
-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=CIsrIqgd%2BLmkhB0nEsDfWg%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
August 27, 2009 15:18 ET (19:18 GMT)
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