November 7, 2003

Brief Roundup on Global Soy, Corn & Wheat Markets

Soybeans - the upward momentum of soybean prices has stopped.  The US soy export sales announced this morning were record large.  Market action turned into a "buy the rumor, sell the fact" affair.  Also, private estimates of the soybean crop released the past few days were definitely larger than the market anticipated.  The prior thought had been small crops get smaller.  So, while many were looking for a 20 million bushel reduction in the bean crop, now the attitude is that crop size should be about the same as in the October report.
 

Corn - the corn market had a small piece of news this week with long-term positive implications.  The US, for the first time in two years, sold a Panamax-size vessel of corn to South Korea.  The presence of Starlink in U.S. corn had caused South Korea to rely on China for corn.  South Korea was a huge U.S. customer and the Starlink mess caused a 200-300 million bushel reduction in exports.  If China really is as speculated slowly exiting the corn export business, South Korea will have to turn to U.S. for corn supplies.
 

Wheat - China is viewed as a potential customer sometime this crop year as their wheat stocks have been drawn down quite a bit.  A Chinese delegation has visited the U.S. and held discussions regarding the size and quality of the U.S. wheat crop.  Some view the visit of the Chinese premier in December as a possible time for announcements of wheat sales.