March 20, 2015 | Grain Hedge Insights | Cody Bills | Views: 179

Will we get a Friday rebound?

The grains positive over the night session as the dollar pushes lower.

In the overnight session the dollar pulled back slightly helping grains push higher. Going into the morning pause corn was up 2 1/4 cents, soybeans were up 3 1/4 cents and wheat was up 5 3/4 cents. Keep in mind that at 10:30 CST this morning Informa will release their latest crop planting forecasts. A recent survey from Farm Futures Magazine forecast soybean acreage at 87.25 million acres, up 4.2 percent from the last year. The farm futures poll also saw corn plantings at 88.34 million acres versus 90.6 million acres planted last year.


Yesterday, the Buenos Aires grain exchange held their soybean production forecast for Argentina steady at 57 million metric tons. The Ag Ministry did the same, keeping their forecast at 58 million metric tons compared to the March WASDE report which is looking for 56 million metric tons of soybean harvested in Argentina this year. Over the last two weeks temperatures across Argentina have been above normal putting some strain on the southern growing regions which missed out on the increased precipitation throughout February and early March. Overall there is still very little concern over the crop size in Argentina.   


Dryness in the plains continues to provide a reason for traders to cover short positions. The latest drought monitor shows parts of the Texas panhandle and western Oklahoma in “Extreme Drought” with only minor relief expected over the next 30 days.  Scattered light showers of 1/4 inch or less was seen across the plains yesterday with some 1/4-1” inch totals observed along the Kansas and Oklahoma border. However, the forecast turns drier over the next 10 days with only chances of light and spotty relief in the 11-15 day forecast.      

March 19, 2015 | Grain Hedge Insights | Cody Bills | Views: 291

Export Sales Breakdown

Cody goes in depth about why analysts are expecting a decline and flattening of export sales.

March 19, 2015 | Grain Hedge Insights | Cody Bills | Views: 146

Dollar Triggers Overnight Volatility in Grains

The U.S. dollar traded sharply lower following the FOMC minutes yesterday triggering the grains to jump in the first few minutes of the overnight session.

The overnight session saw significant volatility with the U.S. dollar selling off sharply following the FOMC statement and then recovering in the overnight to an index level of 99.20. Corn, soybeans and wheat all gapped higher in the opening 5 minutes of the night session and spent the remainder of the night backing off of those gains. Corn went into the morning pause unchanged, soybeans are up 1 1/2 cents and wheat gained 2 1/4 cents in the overnight session.


Yesterday, the FOMC issued their latest statement which indicated that a rate increase will be unlikely in the April meeting. The statement issued announced that they will make a rate hike after they are “Reasonably Confident” inflation will move back to the 2 percent target and after further improvement in the labor market. The dollar traded sharply lower following the statement as traders viewed this as continuation of extremely low interest rates and the delay of any interest rate hike that was expected in the near future.


Export sales were within analyst expectations for soybeans and wheat, but on the low side of expectations for corn. Wheat booked 391,900 metric tons for the week ending March 12th, up 12 percent from the previous week. Corn sales were reported at 502,300 metric tons up 20 percent from last week but on the low side of expectations which ranged from 500,000-700,000 metric tons. Soybean sales fell within analyst expectations with 342,000 metric tons booked for 14/15 delivery. Expectations for soybean sales ranged from 250,000-450,000 metric tons.


Yesterday, the EIA announced that ethanol production increased 3,000 bpd to 947,000 barrels per day. This is the second consecutive week of ethanol production gains. This year’s ethanol production is now up 5.7 percent compared to last year’s production during the same time period. In the March WASDE report the USDA lowered its corn used for ethanol to only a 1.3 percent increase year over year. Recently, there has been talk of Brazilian ethanol being imported into the U.S. due to the strong shift in currency rates. This news is a negative sign for the ethanol and corn markets. 

March 18, 2015 | Grain Hedge Insights | Cody Bills | Views: 164
March 18, 2015 | Grain Hedge Insights | Cody Bills | Views: 143

Grains Bounce Overnight

The grains recovered a couple pennies in the overnight after hard selling during yesterdays session that chart support levels broken.

In the overnight session the grains rebounded a bit after breaking through key support yesterday. The dollar index remains steady and crude oil has fallen a dollar overnight. Corn is up 2 1/4 cents, soybeans are up 6 cents and wheat is up 2 1/2 cents this morning. Today the FOMC statement will be released at 1 PM CST. Traders are watching the statement closely for indication that the first rate hike since 2006 may be near.


In the overnight, corn and soybean prices are testing the failed support levels that were broken during yesterday’s trade session. These support levels are likely to turn to resistance after failing to support prices in yesterday’s trade action. Keep a close watch on prices around 3.73 ¾ for corn and around 9.61 ¾ for soybeans.


China purchased over 600,000 metric tons of corn from Ukraine this year which is not a positive story for the U.S. corn market. China, a country which typically doesn’t import large amounts of corn, has turned to Ukraine to source its needs. In a statement made this month, China intends to double the nearly one million metric tons of corn it imported from Ukraine in 2014. In January Ukraine shipped 470,000 metric tons to China, which was well over the amount exported to China by the U.S.

March 17, 2015 | Grain Hedge Insights | Cody Bills | Views: 213
March 17, 2015 | Grain Hedge Insights | Cody Bills | Views: 132

Traders Eye FOMC Meeting

The grains turned slightly lower in the overnight after selling yesterday in corn and soybeans. Wheat continues to benefit from short covering as traders focus on dry conditions in the Plains and western Russia.

The grains are trading lower in the overnight with corn down 2 cents, soybeans down 2 1/2 cents and wheat down 1 cent. The U.S. Dollar index is pulling back a fraction of a percent this morning and crude oil has slipped under $43 per barrel. Today marks the start of the FOMC meeting which will continue until Wednesday.


NOPA crush numbers showed 146.970 million bushels of soybeans crushed in the month of February, the largest recorded since 2010. This figure was lower than the average analyst guess of 148.537 million bushels, but up from last year’s figure of 141.612 million bushels. The trade reaction to the report was relatively mute with little action following the release of the NOPA numbers.  


Yesterday export inspections were disappointing for corn which only showed 735,311 metric tons were inspected last week for export, missing analyst expectations of between 900,000 and 1,100,000 metric tons. Soybeans and wheat both met expectations showing 583,944 and 519,592 metric tons respectively were inspected for export last week.  


Wheat continued its short covering rally yesterday as the national weather service issued a “red flag” warning across the plains covering Texas, Kansas, Nebraska and western Iowa. The warning for very warm temperatures, low humidity’s and southwest winds created an environment at risk of rapid wildfire growth. The dry conditions throughout the plains have lead Kansas into dropping its weekly wheat crop rating to 41 percent good-to-excellent from 46 percent last week. Texas weekly crop report showed a one percent increase in good-to-excellent rating and Oklahoma wheat conditions declined to two percent week over week.  Russian growing conditions have also been unfavorable, receiving unseasonably warm dry weather fueling crop concerns as farmers begin seeding. 

March 16, 2015 | Grain Hedge Insights | Cody Bills | Views: 267

Wheat Trading Higher

Higher wheat prices are coming at a cost as some European and American wheat is emerging from dormancy. NOPA crush numbers were released and were within analyst expectations.

March 16, 2015 | By Steve Davidson | Views: 1981

BNSF: Determined Not to Disappoint

CEO Carl Ice reassures NGFA annual meeting attendees in San Antonio, TX

BNSF: Determined Not to Disappoint

​"We disappointed, but we're going to do better. In fact, we already are."

That was the key message from Carl Ice, president and chief executive officer of BNSF Railway as he addressed the more than 600 members of the National Feed & Grain Association meeting at their 119th annual convention in San Antonio, Texas.

Ice reiterated what has recently been reported in Feed & Grain; that is, that the company  introduced a $5 billion capital investment plan for 2014 that added  more than 5,000 employees, 500 locomotives and 5,000 freight cars plus overall infrastructure improvements.

While the NGFA audience was understandably focused on the oil vs. grain capacity issues, Ice noted that BNSF measures 22 business segments, and in 2014, 19 of those segments were up. Domestic intermodal is the largest segment, at all-time records.

As such, Ice talked about investments that benefit the entire system, rather than targeting any particular segment. Overall capital investments for 2015 will approach $6 billon and include a new-generation signal system.

"Generally, our railroad is in the best shape it's ever been, as it should be," he said.

Ice also noted how unique it is to address an organization marking its 119th anniversary. "What's even more impressive," he noted, "is that our company and the ag industry have been working together since the 1850s."

March 16, 2015 | Grain Hedge Insights | Cody Bills | Views: 149

NOPA Expectations

The NOPA crush numbers are expected out today which could show the largest crush on record for the month of February. Here are the expectations.

In the overnight session corn, soybeans and wheat all traded lower but were able to recover to mostly unchanged going into this morning’s pause in trade. Corn is down ¼ a cent, soybeans are down ½ a cent and wheat is down 1 ¼ cents. The U.S. dollar is trading slightly below the 100.785 high which was printed last Friday. This week traders will be paying close attention to the FOMC meeting on Tuesday and Wednesday to get more clues on the direction of interest rate policy.


The NOPA crush report will be released at 11 AM CST today. Analysts are expecting 148.537 million bushels of soybeans crushed in the month of February which would be the largest February crush on record and a nearly 7 mllion bushel increase from last year. In a poll of eight analysts the average crush estimate ranged from 143.2 million bushels to 160.5 million bushels. Analysts see soyoil stocks coming in at 1.332 billion lbs which would be up from 1.228 billion lbs last month.


The recent warm-up has triggered flooding on the Ohio River which has halted grain loading at many river terminals. The National Weather Service has issued a flood warning in the Cincinnati area and expects the river to stay at flood levels at least through Thursday. This will hurt spot basis along the river this week.


Weather this week is expected to be wetter for the Plains which have been experiencing excessive dryness. Although the precipitation is expected to be light throughout the next 10 days the added moisture should provide some benefit to the region’s wheat. Brazil continues to get precipitation in the north which has slowed harvest in the region. Despite the rains, there are no significant concerns for that region yet. Argentina looks to see drier weather over the next 6-15 days which should help the northern fields which have been saturated by heavy rains throughout February and March.    

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