KANSAS CITY (Dow Jones)--Cash grain markets are expected to remain relatively quiet as futures prices look to open mixed and many producers choose to wait for higher prices before selling their grain and soybeans, analysts said Wednesday.
Interior basis for corn, wheat and soybeans at select locations across the country held mostly steady in quiet trade.
Scattered grain sales were reported Tuesday, however, sparked by a futures market rally that put at least a temporary stop to the sharp losses that took place in January.
"Many analysts had expected speculative funds to be buyers in the grain complex at the start of the new year, but just the opposite has happened," said Karl Setzer, analyst with MaxYield Cooperative.
Since the start of the new year, speculative funds have liquidated 100,000 corn contracts, 40,000 soybean and 30,000 wheat contracts, Setzer said in his morning commentary.
In export news, South Korea is tendering for 6.5 million bushels of corn and up to 2 million bushels of feed wheat, said Bryce Knorr, analyst with Farm Futures.
Based on national averages supplied by the Minneapolis Grain Exchange, soybean basis firmed 1/2 cent overnight, while corn strengthened 1 1/2 cents a bushel. Wheat basis softened, led by a 1 3/4 cent loss in soft red winter, a 1 1/2 decline in hard red spring and a modest 1/2 cent loss in hard red winter.
National cash price indices maintained by the MGE Tuesday closed at $8.77 1/2 for soybeans, reflecting an average basis of -48 cents relative to the days settlement of March CBOT futures.
Domestic cash prices also averaged $3.28 1/2 for corn (-36 1/2 cents basis March CBOT), $4.10 1/4 for hard red winter wheat (-88 3/4 cents basis March KCBT), $3.97 1/2 for soft red winter wheat (-89 3/4 cents basis March CBOT) and $5.14 1/2 for hard red spring wheat (-2 1/4 cent basis March MGE).
Chicago Board of Trade soybean futures are expected to open mixed, with corn and wheat called 1 cent to 2 cents lower.
A firm U.S. dollar and choppy to weak action in the key energy and precious metals markets may exert light selling pressure in the grain pits, a trader said.
CROP WEATHER
Mostly dry conditions are seen in the Midwest Wednesday, with a chance for snow developing in the west and spreading east Thursday and Friday, said Joel Burgio, meteorologist at DTN Weather.
Some areas could receive several inches of snow, particularly in central and southern areas of the western Midwest.
In the eastern Midwest, snow is likely Thursday night through Friday night, with the heaviest totals from 3 to 6 inches in the south and east-central areas.
On the central and southern Plains, snow is expected Wednesday night and Thursday in the feedlots of the Texas and Oklahoma panhandle regions, as well as southwestern Kansas, Burgio said.
Snow accumulations in the panhandles may total 4 inches.
-By Tom Sellen, Dow Jones Newswires; 913-322-5177; tom.sellen@dowjones.com
(END) Dow Jones Newswires
02-03-10 1000ET
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