Traders said core offers for barge-bound corn to the US Gulf Coast fell on Thursday, suggesting a slowdown in demand from exporters and recent drops in barge freight costs.
After easing this week due to improved river conditions in the Midwest and weak shipper demand, empty barge supply and demand were relatively unchanged.
In its monthly supply/demand report, the US Department of Agriculture revised its forecast for 2022-2023 US corn exports (WASDE06) down by 150 million bushels, noting “ the poor pace of shipments through December.”
On Thursday, barge-loaded CIF corn in January was offered at 86 cents over March futures (CH3) on the Chicago Stock Exchange (CBOT), down 5 cents from the previous day. Barge-loaded March corn traded at 87 cents over March futures, down a cent from Wednesday.
FOB Gulf corn cargo offers in January were about 105 cents above March futures, down 5 cents from Wednesday, while February cargoes were about 100 cents above March futures, also a nickel less.
In the case of soybeans, barges loaded in January were re-bid at 114 cents on March futures and traded at 126 cents on March CBOT (SH3) futures, with offers hovering around 128 cents on futures. . Barge bids for February soybeans were flat since Wednesday at 103 cents over March futures (SH3).
More about corn barges
February charges rose 2 cents to 132 cents over March futures. However, FOB soybean offers loaded in January held steady at about 140 cents above March futures.
Following suspicions that odd cargoes were being booked at this time of year, a Brazilian trade body representing international grain traders confirmed it was “atypical.” According to Anec, which represents companies including Cargill and Bunge, the Brazilian soy supplies are needed because a wave of depleted local sales of Argentine soybeans triggered by the government’s “soy dollar” initiative in the fourth quarter of the year.
The cost of fuel is an indirect measure of a significant portion of the price of grain. The fuel is used (a lot) in the production of corn and its transport to markets. Additionally, ethanol is produced using corn as a fuel additive.
We should expect continued increases in corn prices as long as federal policy prioritizes ethanol as a motor fuel component. Not surprisingly, political candidates are expected to trample the snow in Iowa every four years to worship the Corn God, whose altar has become the ethanol business.
