All Three Futures Markets Fell to Contract Lows,Pressured by Rising Global Supplies

All three futures markets fell to contract lows this week, pressured by rising global supplies that will compete with U.S. exports. CBOT and KCBT March contracts each lost 15 cents this week to close at $6.14/bu and $6.57/bu, respectively. MGEX March fell 10 cents to $6.51/bu. CBOT March corn added 8 cents to $4.33/bu and CBOT soybeans closed 17 cents higher at $13.31/bu.

In the last four weeks, the CBOT March contract has lost $15/MT ($0.41/bu). But basis has increased to largely compensate and the FOB price has dropped just $4/MT to $273/MT for January delivery. Basis has also mostly compensated for the $22/MT ($0.60/bu) drop in MGEX March futures. FOB January delivery of 14.0 HRS from the Gulf has fallen just $2/MT to $336/MT. HRW basis at the gulf has not compensated. Both the KCBT and 12.0 HRW FOB dropped $16/MT ($0.43/bu) since November 15.

The Argentine Agriculture Ministry increased its 2013/14 production forecast 500,000 tons to 9.0 MMT, compared to 9.5 MMT in 2012/13.

The Baltic Panamax Index fell for the first time in three weeks after a sharp two-week increased. The index closed down 238 points at 1,858. Strong U.S. grain exports and Chinese iron ore imports helped support the market.

The US Dollar Index increased from 80.22 to 80.75.