Soybean, Corn Premiums Rise as Farmers Halt Sales

Bloomberg reports that Soybean, Corn Premiums Rise as Farmers Slow Sales of Inventory.

(emphasis mine) [my comment]

Soybean, Corn Premiums Rise as Farmers Slow Sales of Inventory
July 06, 2010, 5:40 PM EDT
By Jeff Wilson

July 6 (Bloomberg) -- Cash premiums for soybeans shipped to export terminals near New Orleans rose relative to Chicago futures after farmers halted sales of dwindling inventories of last year' s crop. Corn premiums widened after futures fell.

The spot-basis bid, or premium, for soybeans delivered this month was 75 cents to 89 cents a bushel above August futures, compared with 74 cents to 83 cents on July 2, U.S. Department of Agriculture data show. The corn premium rose to 38 cents to 41 cents a bushel September futures from 38 cents to 40 cents on July 2.

“Farmers are not selling soybeans” after rains delayed planting and stunted early development of this year' s crop, said Tim Emslie, a research manager at Country Hedging Inc. in Inver Grove Heights, Minnesota. “We did see a little corn selling early, but that dried up after futures fell.”

Soybean futures for August delivery fell 4 cents, or 0.4 percent, to $9.405 a bushel on the Chicago Board of Trade. The oilseed climbed 1.5 percent in the previous two sessions after the USDA said that inventories as of June 1 dropped to the lowest level since 2004.

Soybean futures rallied 5% in the last two days. This rally is being driven by the growing shortages in the physical market.

My reaction: Remember that the fall harvest is over two months away. I expect the soybean rally to continue and intensify quickly.

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One Response to Soybean, Corn Premiums Rise as Farmers Halt Sales

  1. dabba says:

    eric, i believe the soybean rally is just about out of steam. we will have plenty of beans for another year. it will stop well short of your magic 20.00 mark. my concern is 2011 and beyond. as the gulf goes black what will the rains hold as hurricanes come thru the gulf and into the breadbasket of the usa. nobody knows. farmer dabba

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