Corn, Soy Premiums Fall as U.S. Supplies Overwhelm Slower Demand

Cash premiums for corn and soybeans shipped this month to terminals near New Orleans declined relative to Chicago futures as demand slowed and inventories at export depots increased.

The spot-basis bid, or premium, for corn delivered in January at Gulf of Mexico ports fell to 35 cents to 36 cents a bushel above March futures from 36 cents to 39 cents yesterday, government data show. It was the 12th session without an increase, leaving the average spot bid at the lowest since Sept. 23. Soybean premiums were 57 cents to 70 cents above March futures, compared with 59 cents to 69 cents yesterday.

“Buyers are comfortable with the amount of physical inventories they own, and the basis is weakening,” said Diana Klemme, the director of the grain division for Grain Service Corp., a consulting and brokerage company in Atlanta.

Corn futures for March delivery rose 10.75 cents, or 1.8 percent, to close at $6.1925 a bushel at 1:15 p.m. on the Chicago Board of Trade. Before today, prices fell 3.3 percent this week after gaining 52 percent in 2010.

Soybean futures for March delivery rose 24 cents, or 1.8 percent, to close at $13.935 a bushel, after falling 2.4 percent during the prior two days. Prices advanced 34 percent in 2010 on rising demand for animal feed and cooking oil made from the oilseed.

Export Inspections Drop

In the week ended Dec. 30, the government inspected 20.151 million bushels of soybeans for export, down 34 percent from a week earlier, the U.S. Department of Agriculture said Jan. 3 in a report. Corn inspected for export last week fell 63 percent to 15.616 million bushels, the government said.

Corn shipped to grain depots along the Illinois River and deliverable against Chicago futures totaled 2.076 million bushels in the two days ended Jan. 4, or more than double the 964,545 bushels shipped to exporters in New Orleans, data from the CBOT show. Soybeans received by elevators were 45 percent more than the amount shipped over the same period.

Grain processors and exporters “simply have too much inventory for slower January demand,” Klemme said.

To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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