Grain sales from farmers typically increase early in the new tax year as cash is needed to pay last year’s bills and to order this year’s supplies, but the lower start to 2016 crop markets stilled farmer selling on the first business day of the 2016.
Bearish economic news from China and the United States pushed a number of markets lower including commodities. Contract lows were set in corn and wheat futures and soybeans dropped to a two-week low.
“We bought about 10,000 bushels today. I thought maybe they (farmers) would cut loose today for cash flow, but they are still sitting tight,” said a central Illinois grain dealer.
Similar comments were heard throughout Illinois and Iowa. However, grain dealers do expect farmer selling to increase at some point to secure the money needed to buy supplies for spring planting. Basis bids to farmers for corn and soybeans were largely unchanged, although at a few Illinois locations the soybean basis bid dropped 2 to 3 cents when the basis moved to the March from January.
Weather conditions improved throughout the Midwest since last week. Drier weather since then has rivers and streams retreating to within their banks and standing water has soaked into fields. However, more rain or snow is forecast on Wednesday.
Grain shipments from grain elevators to end users were fairly light. A corn train was sent from central Illinois elevator last week to a poultry farms in the southeast.
A river dealer said floodwaters on the Mississippi were receding and navigation had resumed from St. Louis to Cairo. The river was still closed closer to the Gulf but sections were expected to gradually reopen as the flood waters move past.
“The general panic seems to be over with,” an Iowa river dealer said of the flooding.
USDA’s grain transportation report released last week said grain rail car loadings for the week ended Dec. 19 were down 9% from a year ago and that 2015 year-to-date loadings were up 4%. Year-to-date grain barge movement as of Dec. 26 on key waterways was up 1.5%.
In the report’s fuel segment, USDA said the average U.S. diesel fuel prices in the week ended Dec. 28 decreased 5 cents from the previous week to $2.23 per gallon, down $0.98 from the same week last year.
“Prices have fallen 27 cents in the past 7 weeks to reach the lowest diesel price since 2009. The Energy Information Administration expects diesel fuel prices, which averaged $3.83 per gallon in 2014, to average $2.71 per gallon in 2015 and $2.67 per gallon in 2016,” it said.
USDA’s weekly export inspections on Monday showed soybean shipments at 55.5 million bushels, up slightly from last week and a year ago. China was again the largest recipient. Year-to-date shipments for the crop year are 1.017 billion bushels, down about 10% from a year ago.
Corn export shipments of 12.8 million bushels were down 44% from a week ago and down 40% from a year ago. Peru was the largest market followed by Mexico and Colombia. Year-to-date shipments for the crop year are about 372.1 million bushels, down 22% from a year ago.
Weekly wheat shipments of 12.8 million bushels were up 12% from a week ago but down slightly from a year ago. The Philippines, Japan and Indonesia were the leading markets. Year-to-date shipments for the crop year that began June 1 are about 446.7 million bushels, down 12% from a year ago.