Export premiums for corn, soyabeans and wheat were steady on Friday at the US Gulf Coast as surging futures chilled demand for overseas shipments, traders said. Traders described a largely quiet day in the cash markets as futures for all three commodities locked up the daily trading limit after USDA slashed corn and soyabean production.
It was the first time in more than three years that futures for corn, soyabeans and wheat settled up the daily limit and options indicated futures may continue to rise when trade resumes on Sunday. Talk that China bought as many as 20 cargoes of US soya as the world's top soyabean buyer returned from a national holiday added further support to futures, but the purchase could not be immediately confirmed.
CIF basis bids for corn and soyabeans were slightly weaker following the sharp rise in futures. Barge freight costs rose amid active soyabean harvest in the US Midwest. One trader said early Friday that Midwest river terminals were running out of storage space and sending shipments downstream to the Gulf.
Surging US corn prices should boost export demand for US distillers dried grains, a competing animal feed produced when corn is processed into ethanol, industry experts said on Friday. USDA put US 2010/11 corn production at 12.664 billion bushels, below a range of estimates from 12.811 billion to 13.300 billion. USDA pegged US 2010/11 soya harvest at 3.408 billion bushels, below average trade estimate of 3.475 billion.