Corn May '19 (ZCK19)Get Real-Time Futures
Corn Futures Market News and Commentary
Corn futures saw fractional to 1 3/4 cent losses in most contracts on Monday. Midwest flooding is further delaying the likely start of planting. It is still very early, however. The weekly Export Inspections report from USDA showed corn shipments in the week of 3/14 down from the week prior at 795,241 MT, which was 44.75% below the same week in 2018. YTD exports are still 25.71% above a year ago at 27.397 MMT (1.079 bbu). State by State Crop Progress data shows the Southern most states (TX, MS, LA, and AR) all lagging a year ago for planting progress, though it is still early even for those states.May 19 Corn closed at $3.71 1/2, down 1 3/4 cents,Jul 19 Corn closed at $3.80 3/4, down 1 1/2 cents,Sep 19 Corn closed at $3.87 1/2, down 1 1/4 centsDec 19 Corn closed at $3.94 3/4, down 1 1/4 cents--provided by Brugler Marketing & Management
If you’re keeping up to date on my basis postings, you’ll recall my most recent piece on soybeans (“Soybean Basis: The Weight of Futures”) talked about the often-inverse relationship between futures and basis. In other words, if the futures market posts a strong rally, grain merchandisers will often soften basis a bit on the idea that futures will do a good enough job of sourcing enough supplies to meet demand. Last week saw national average soybean basis firm, slightly, despite solid gains in futures, until Friday.Spring wheat was different, though. Here we saw the national average basis (cmdty National Hard Red Spring Wheat Index minus futures) actually weaken as the futures market firmed late in the week. To be exact, the May Minneapolis futures contract gained 5 1/2 cents, paltry indeed compared to the rest of the grain and oilseed complex, while national average basis weakened 1 1/4 cents from the previous to finish at 53 1/4 cents under the May. When one considers much of the U.S. Northern Plains remains buried by feet of snow, in mid-March, it seems counter-intuitive that spring wheat basis should be weakening.Until you factor in where bushels are being held. Most of the wheat in the U.S. winds up in commercial storage, where ownership is more easily transferred from seller to buyer. Therefore, if one doesn’t have to wait for the snow to melt before pulling grain out of an on-farm bin, it creates a situation where winter (into spring) weather doesn’t create a similar search for supplies like what has been seen in corn and soybeans. Darin NewsomPresidentDarin Newsom Analysis Inc.
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