Milling & Baking News - April 16, 2013 - 20

Grain Market Roundtable 

Large stocks, hope for better
weather set stage for lower
but choppy grain prices
Corn leads markets lower before rebound

Continued from Page 1

two sessions, nearby wheat futures
tumbled about 70c a bu in Chicago,
more than 60c in Kansas City and
about 48c in Minneapolis, while nearby soybean futures fell about 60c a bu.
Amid some wide daily price swings,
grain and soybean futures had recovered some of their losses from the
Grain Stocks surprises by late last
week, with wheat contracts seeing the
best recovery. Where prices go from
there was open to debate.
While corn continues to lead the
grain and soy complex markets overall, since late March, wheat has been
awash in market-moving news and
rumors including large sales to China,
improved export demand overall, ongoing drought, lingering cold, excess
moisture and, of course, spring weather, which, like last year and most years,
will be a key unknown factor.
Despite the varied market influences, most but not all analysts expected
lower prices in the months ahead as
values continue to decline from last
summer’s highs, mostly the result of
larger-than-expected stocks and anticipation of large new crop supplies,
although tight old crop supplies of
corn and soybeans will support prices
nearby. Of course, it all depends on
improved or more “normal” weather.
20 / April 16, 2013 Milling & Baking News

Drew Lerner, president at World
Weather, Inc., Overland Park, Kas.,
said the eastern Corn Belt and states as
far west as Missouri and Iowa should
return to more normal conditions, the
Delta appeared poised for more favorable weather conditions and only the
High Plains wheat region was likely to
remain overly dry.
Mr. Lerner characterized prospective 2013 weather patterns as a return
to “quasi-normal conditions.”
This year and last year seemingly
couldn’t be more different. The 2012
season was characterized by two major weather “events,” the warm early
spring and the late drought. In contrast, early in the 2013 season, there
appeared to be no single defining
market feature but rather a conglomeration of varied domestic and global
weather, supply and demand, and
outside factors that add an unsettling
tone to the markets.
Last year, historically early summer-like weather allowed a jumpstart
to planting of spring wheat and row
crops, but the real effects of weather
were felt later in the summer as the
worst drought in decades developed
quickly and spread across the Midwest, devastating corn yields and reducing soybean production.
Unlike early last year, weather this

year was playing a largely negative
role as cold, wet conditions in many
areas delay corn and spring wheat
planting, freezing temperatures in late
March and again last week continue
to threaten the hard red winter wheat
crop in western parts of the Southwest
growing region, and excessive moisture was affecting some key soft red
wheat areas.
“I surveyed freeze injury in southwest Oklahoma and the damage is
extensive,” Jeff Edwards, Ph.D. and
small grains extension specialist at
Oklahoma State University, said in an
e-mail and on his blog on April 6. “In
my experience, most freeze events are
overhyped; however, this one was the
real deal. Most of these fields are too
far past the tillering stage to have yield
compensation from secondary tillers.”
Working in the crop’s favor this
spring was late development of the
hard red winter crop with jointing in
some areas well behind average due to
the same cold weather.
The damage Dr. Edwards observed
occurred when temperatures across
Oklahoma and surrounding areas
fell into the teens and 20’s March 2526. While the fields with the greatest
yield potential likely were irrigated
and further developed than much of
the dry land wheat in the region, the
bakingbusiness.com / world-grain.com
http://www.bakingbusiness.com http://www.world-grain.com
Milling & Baking News - April 16, 2013

Table of Contents for the Digital Edition of Milling & Baking News - April 16, 2013
