September 02, 2015 | Grain Hedge Insights | Cody Bills | Views: 57

Can Corn Hold Support?

The corn market is trading next to a critical price level which has acted as support multiple times since January.

In the overnight session the grains traded slightly lower with corn down 1/2 a cent, soybeans up 3 cents and wheat down 3/4 of a cent. The outside markets are somewhat positive this morning with the Mini S&P up nearly a percent, the U.S. dollar index up .38 percent and crude oil down $.64 this morning. Corn is hovering right around a critical support level of $3.65 which it has tested two times in the last three weeks. If corn closes below $3.65 today, probability increases that prices move another leg lower.

 

Last night at 3:30 CST, FC Stone released its latest yield and production forecast. Their latest corn yield forecast was set at 165.9 bushels per acre up from 165 which it estimated last month. This is on the low end of expectations right now with Planalytics yield estimate at 166.8 bushels per acre, the USDA at 167.2 bpa and Pro Farmer at 164.3 bushels per acre. Corn production was estimated at 13.457 billion bushels from 13.381 billion last month.

 

FC Stone pegged the national average soybean yield at 45.4 bushels per acre up from 45 last month. This is still on the low end of estimates with Planalytics yield forecast at 46.2 BPA, USDA at 46.9 BPA and Pro Farmer yield at 46.5 BPA. FC Stone is looking for 3.791 billion bushels of U.S soybean production, up from 3.797 billion bushels this month.

 

Traders await the September WASDE report set for release at 11 AM CST on the 11th. NOPA crush numbers will then be released on the 15th of this month. 

September 01, 2015 | Grain Hedge Insights | Cody Bills | Views: 119
September 01, 2015 | Grain Hedge Insights | Cody Bills | Views: 78

Soybeans Pressured By Negative Manufacturing News Out of China

The soybean market is being pressured this morning by negative manufacturing news out of China which has triggered a selloff throughout the Global market.

In the overnight session the grains traded lower with December corn down 4 cents, November soybeans down 8 1/4 cents and December wheat up 2 cents. The outside markets are sharply lower this morning with the Dow down 2.5 percent and crude oil down $2.13 dollars after surging $4.00 higher yesterday. The global markets are lower this morning after China’s official manufacturing purchasing managers index for August fell to 49.7 from 50 in July. This marks the lowest level for the index since August 2012.

Crop conditions this week showed that corn good-to-excellent ratings declined 1 percent to 68 percent this week which was in line with analyst expectations. As of Monday 92 percent of corn was at Dough stage and 60 percent of the crop was Dented. Soybean conditions remained unchanged at 63 percent rated good-to-excellent this week which was better than expected.​​

 

Export inspections were strong this week with corn recording 1,000,175 metric tons beating the average guess which ranged between 775,000-900,000 metric tons. Soybeans was on the high side of expectations with 184,285 metric tons inspected for export, and Wheat beat expectations with 601,639 metric tons inspected at ports compared to the average guess of between 275,000-400,000 metric tons.

 

The Planalytics Agribusiness Weather brief showed that this week’s temperatures will remain above normal throughout the Midwest with chances of precipitation through eastern South Dakota, eastern Nebraska and Minnesota on Sunday. The 6-10 day forecast looks to bring wide coverage of precipitation throughout the corn and soybean belt with above average temperatures.

August 31, 2015 | Grain Hedge Insights | Cody Bills | Views: 130
August 31, 2015 | Grain Hedge Insights | Cody Bills | Views: 160

Can the Grains Recover?

The grains are moving lower early in the week, but can late growing season weather help lift them out of their lows?

In the overnight session the grains are trading lower with corn down 2 1/2 cents, soybeans down 9 1/4 cents and wheat down 4 1/2 cents by the morning pause in trading. The outside markets are also trading lower with crude oil down $1.20, the U.S. dollar down .22 cents and the mini Dow Jones average down 1 percent. Today is first notice day for September grain contracts.

 

The grains could continue to move lower this week as optimal weather helps finish off the grain, however we believe that corn could show relative strength in a weakening grain complex. Planalytics, lowered its corn yield forecast by .4 bushels per acre to 166.8 bushels per acre on Friday. This is below the USDA estimate of 168.8 bushels per acre, but a couple bushels per acre higher than the Pro Farmer forecast a couple weeks ago. We believe that the USDA is more likely to move corn yield lower in the September report than higher, and the warm temperatures triggering rapid maturation of the crop will only rob yield potential in the eastern parts of the grain belt.  Planalytics soybean yield was increased last week up to 46.2 bushels per acre, just shy of the 46.9 bushels per acre forecast by the USDA in the August report.

 

Over the weekend Iowa received precipitation as the moisture passed eastward from the South Dakota. Over the next 5 days little if any precipitation will assist the filling grain. Exceptional coverage is however expected in the 6-10 day outlook and more precipitation covers the Midwest in the 8-14 day forecast. Chances of an early frost are still low. Temperatures in the 6-10 day forecast remain above average for the majority of the central to eastern grain belt. 

August 28, 2015 | Grain Hedge Insights | Cody Bills | Views: 178
August 28, 2015 | Grain Hedge Insights | Cody Bills | Views: 333

Weekly Cash Comments

Cash Commentary for week ending August 28, 2015

Grain basis was mixed again this week with corn basis gaining 1.5 cents a bushel, while soybean basis gave up 4 cents on average across the U.S.

 

In corn, basis levels were bolstered by strength at river terminals and the Gulf. Gulf corn bids were up 12 cents a bushel this week and surpassed their 5-year historical average for the first time since mid-June. At river terminals, basis levels were up 4 cents a bushel as gains were muted by a slight uptick in barge freight costs.

 

For soybeans, the premium of spot delivery over new-crop fall delivery continues to erode with harvest likely to start in the next month. Spot bean basis was off 4 cents for the week, but at the Gulf basis levels bucked that trend by posting a 9 cent advance. River terminals, however, failed to follow the Gulf market as losses upstream were about 7 cents a bushel. For soybean plants, double-digit losses were fairly typical this week, although as a group soy plants lost 5 cents a bushel. 

August 28, 2015 | Grain Hedge Insights | Cody Bills | Views: 169

Grains pressured by positive weather outlook

The grains continue to be pressured by a positive weather outlook, higher global production and economic concerns out of China.

In the overnight session, the grains inched higher with corn up 1 1/4 cents soybeans up 5 cents and wheat up 1 cent. The U.S. dollar is trading mostly unchanged and crude oil is down 46 cents. The EU cut its corn production forecast this month to 58.7 million metric tons from 65.5 million metric tons last month. Europe was plagued by hot dry weather during a critical development period which reduced yield prospects significantly. The EU however raised their soft wheat harvest estimate to 140.7 million metric tons from 139.4 million metric tons last month.

 

Yesterday, the International Grains Council raised its global wheat production by 10 million metric tons to 720 million metric tons citing improved Russian production. The council also increased their global corn crop by 2 million metric tons to 968 million metric tons this month, mentioning a decline in EU production being more than offset by more favorable U.S. crop prospects.

 

The GASC tender set mid-week was won by Russia on Thursday with the low bid of $180.47 dollars per ton FOB. Egyptians grain buyer GASC issued another tender for 60,000 metric tons on Thursday which was also filled by Russian wheat at $190.07 per ton including freight.   

 

The western grain belt saw rain last night with the heaviest rains in South Dakota. The storm should move eastward into the Midwest over the next couple days. Following this rain event the forecast looks mostly dry until late next week when the northern half of the grain belt looks to be wetter than normal. Showers will aid the crop in the 11-15 day forecast. 

August 27, 2015 | Grain Hedge Insights | Cody Bills | Views: 265
August 27, 2015 | Grain Hedge Insights | Cody Bills | Views: 154

Can Soybeans Rebound Higher?

Export sales, a rebound in the Chinese stock market and positive U.S. news helped lift soybeans early Thursday morning.

In the overnight session the grains are trading higher with soybeans leading the charge up 14 1/2 cents, corn up 1 1/2 cents and wheat up 3/4 of a penny. The U.S. dollar index is trading 1/2 a percent higher and crude oil is up $1.33. This morning exporters sold 130,000 metric tons of new crop soybeans to unknown destinations making this the third reportable soybean sale this week. 

 

Last night the China market rallied over 5 percent in the last hour of trading after the government took steps to stabilize their stock market before a September 3rd military parade which celebrates the 70th anniversary of the WWII victory over Japan. With China showing strength late in the session soybeans have been able to rebound. Positive news about the U.S. economy was also announced this morning with GDP expanding at a 3.7 percent annual pace up from the 2.3 percent reported last month.  Unemployment claims also fell more than expected last week by declining 6,000 to 271,000 for the week. 

 

Export sales this week were disappointing for old crop but new crop beat expectations for corn and soybeans. New crop corn booked 986,600 metric tons of sales compared to expectations which ranged between 450,000-650,000 metric tons. New crop soybeans booked 1,457,400 metric tons of sales which was nearly double last week’s sales and well outside the estimates which ranged from 600,000- 900,000 metric tons.  Old crop sales however were disappointing with cancellations of 131,000 metric tons of corn and 131,600 tons of soybeans. Wheat sales beat expectations, booking 572,100 metric tons which is up 68 percent from the previous week. 

Ethanol production decreased 13,000 barrels per day this week to 952,000 barrels per day. Despite the decline in production cumulative ethanol production is still running 4.5 percent ahead of last year’s pace. This week’s production was 87,000 barrels per day above the four year moving average for this week and 39,000 barrels per day ahead of 2013/14 production during the same week. Ethanol stocks rose by 67,000 barrels this week to 18.63 million barrels this week.​

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