UPDATES
GRAIN
Corn movement finally visible
F
By Joe Kelley
inally, after months of limited activity in the country, we are beginning
to see some movement of yellow
corn in the region. Both domestic
and foreign markets are beginning to
pick up a little bit. Although prices aren’t in the
range that we would like to see, at least there are
the beginnings of some traction with regards to
movement.
As for the Mexican yellow corn market, many
Mexican end-users estimate that Mexico will be
short about 500,000 metric tonnes — approximately 20 million bushels — of yellow corn
between now and June, which is the beginning
of local corn harvest in the northern states. To
alleviate the shortfall, Mexican end-users are
being forced to buy yellow corn from the states
and/or South America. The end-users that have
the capacity to receive 106 to 114 car shuttle
or incentive trains will do so, originating these
trains from the Midwest, where they can take
advantage of low basis levels and what is typically considered high quality yellow corn. Additionally, with the low fuel prices and relatively
light rail traffic, rail freight is definitely more
attractive now than in years past, at least from a
price stand point.
However, the Mexico end-user does have
a troublesome concern — the exchange rate.
In fact, earlier this year the exchange rate was
roughly 20 Mexican Pesos to 1 USD. As most
U.S. sellers will sell bushels in U.S. dollars, the
Mexican end-user has to go to the market and
buy dollars with pesos. What sounds like a
cumbersome process to Americans is part of
Mexico’s and the rest of Latin America’s daily
routine. The Mexican buyer is often much more
“aware” of factors affecting international trade
than what most Americans give them credit
for. In fact, they have to deal with more factors
influencing trade on a daily basis than Americans ever do.
Information from Chinese buyers seems
to indicate that the Chinese government will
look to move much of its multi-year stockpile
of yellow corn, which has been stockpiled for
about seven years, to the industrial market,
encouraging Chinese businesses to use this corn
for starch and ethanol production. Chinese
companies seem to think that this might allow
them to source better quality yellow corn from
foreign markets. In fact, we have seen inquiries
from certain companies in China that are seeking price indications on DDGS, grain sorghum
and yellow corn once again, albeit in small
quantities.
No doubt the coming year will provide challenges and opportunities for farmer and grain
merchandiser alike. The stress of uncertainty
can be at times overwhelming; especially when
we in agriculture have strong emotional attachments to the land and what it produces. Our
land, crops, family and culture are intermingled
together in this area. This, like everything in life,
is a mixed blessing. But we show up for life and
continue on, thankful for our family, friends
Facilities make room for harvest
H
By Steven Craig
illje and Danevang crews continue to carry out preventative maintenance tasks throughout the facilities. The
majority of repairs are being carried out in-house to reduce maintenance costs. Outbound trucks have shifted
to Hillje to create space for the upcoming harvest.
Currently, available storage at Hillje is at 66 percent of total capacity
compared to 80 percent space at Danevang. The Port of Victoria facility has begun loading out trucks as well to prepare for harvest. The
traffic is on pace to empty POV by the end of the month. Overall, the
facilities are in great shape for the upcoming harvest expectations.
Corn bagging plant up and running
Corn bagging has officially begun at the United Ag Bagging Plant.
As of February 19, 250 pallets have been created. Expectations are very
high for the volume to pick up tremendously over the next few months.
Feedback has been 100 percent positive on our bagged corn. Overall,
the facility is working perfectly. Employees throughout United Ag are
being trained to operate the facility to quickly and efficiently meet the
demand whenever necessary. The corn bagging facility is sure to be a
great addition to all that United Ag has to offer.
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