Daniels Trading Senior Broker & Grain Analyst Contributing Editor Craig Turner was quoted in the January 14th, 2014 Dow Jones Newswires article titled “Corn Prices Fall as Farmers Sell Grain on Recent Gains.”
Corn Prices Fall as Farmers Sell Grain on Recent Gains
By Tony C. Dreibus
Corn futures prices fell for the first time in three sessions on speculation that farmers have increased selling after a 5.5% price spike in the previous two sessions. Soybeans and wheat also declined.
Corn prices surged after the U.S. Department of Agriculture unexpectedly cut its estimate for domestic production in a report on Friday. Growers last fall harvested 13.925 billion bushels of corn, less than the 13.989 billion forecast in December. As prices rise, farmers may be more willing to sell grain they’ve stored, anticipating higher prices, analysts said.
“Farmers are probably selling because they’re looking at the balance sheets” and realizing that the U.S. will have ample stockpiles this year, said Craig Turner, a senior broker at Daniels Trading in Chicago. “Farmers are thinking if they can sell their corn at $4.35 or $4.40 a bushel, they’ll do some of that.” Corn futures for March delivery fell 5 cents, or 1.2%, to $4.29 1/2 a bushel on the Chicago Board of Trade.
The price also declined on speculation the USDA overestimated how much corn will be used to feed animals. The government on Friday raised its outlook for feed and residual use to 5.3 billion bushels and to 100 million bushels into feed rations. That may not be sustainable due to the porcine epidemic diarrhea virus, or PED, which has killed thousands of hogs in 22 states, Mr. Turner said.
PED, which appeared in the U.S. for the first time in April and causes severe diarrhea and vomiting, is fatal only to young pigs and poses no threat to human health or food safety, according to swine veterinarians.
Soybeans prices fell, as showers are forecast to fall in parts of Brazil, the world’s biggest exporter of the oilseeds, for the next seven days, improving prospects for crops. Brazil is forecast by the USDA to produce a record 89 million bushels this year. Price gains will be limited because of increased Brazilian production, analysts said.
Soybean futures for March delivery declined 3 1/2 cents, or 0.3%, to $12.90 3/4 a bushel in Chicago trading. Soybeans for January delivery, the thinly traded front-month contract set to expire, fell 10 1/4 cents, or 0.8%, to $13.16 1/2 a bushel.
Wheat declined as Argentina reportedly approved 1.5 million metric tons of the grain for export. While that’s a large amount, it won’t satisfy needs in Brazil, said Sterling Smith, a futures specialist at Citigroup in Chicago. Still, South American countries are bound to trade with each other to avoid import tariffs, so U.S. shipments to Brazil may slow, he said.
Wheat futures for March delivery fell 1/4 cent, or 0.04%, to $5.73 1/4 a bushel on the CBOT.
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