October 07, 2015 | Grain Hedge Insights | Cody Bills | Views: 234

Grains Nearing Resistance

The grains are nearing resistance in the charts. Can corn and wheat continue marching higher?

The grains are moving higher with corn up 3/4 of a cent, soybeans up 6 cents and wheat up 3 1/2 cents this morning. The outside markets are mostly supportive with the dollar unchanged, the E-MINI S&P up .61 percent and crude oil up 48 cents this morning.


The grains have been drifting higher over the last couple days but be wary as corn and wheat near resistance levels. Corn resistance at $4.02 could be relatively potent if corn has the momentum to test it. The resistance level was a gap on July 27th and was unsuccessfully tested back on August 10th. If prices can close above that price level we could see further short covering added to this rally. Wheat resistance is at $5.33 ¼ cents which was also a high back on October 10th. With wheat and corn only cents away from testing these resistance levels both corn and wheat could find it hard to continue the climb higher in today’s session.


The Midwest harvest should be mostly uninterrupted over the next couple weeks. The Planalytics 6-10 day forecast shows 50-60 percent drier than average weather throughout the heart of the grain belt. The 8-14 day forecast also shows no significant moisture entering the Midwest which will provide a large window to progress through the bulk of harvest. 

October 06, 2015 | Grain Hedge Insights | Cody Bills | Views: 165
October 06, 2015 | Grain Hedge Insights | Cody Bills | Views: 257

Corn Looks to Move over $4

Corn prices look to move over $4 as prices break from consolidation at the 100 day moving average.

In the overnight session the grains traded a bit higher with corn up 1 3/4 cents soybeans down 1/2 a cent and wheat up 4 1/2 cents. The outside markets are mixed with the U.S dollar trading .22 percent lower, E-Mini S&P futures .1 percent lower and crude oil up 41 cents this morning. On Friday the USDA will release its October Supply and Demand report.


Crop progress was reported yesterday after the market closed and showed that corn harvest was behind analyst expectations with only 27 percent of the crop harvested below the four year average of 32 percent complete. Analysts were expecting to see corn harvest advance to at least 30 percent complete this week. Soybean harvest progressed strongly last week with 42 percent of the crop rated good to excellent, beating analyst expectations of 41 percent and ahead of the 4 year average of 32 percent harvested. Soybean harvest jumped 21 percent this week. Crop conditions remained steady for corn with 68 percent of the crop rated good-to-excellent. Soybeans on the other hand jumped 2 percentage points in the good-to-excellent category to 64 percent.


Export inspections were strong for soybeans on Monday providing strong support for the oilseed. For soybeans export inspections totaled to 1.1 million metric tons last week which was well above the expectations which ranged from 450,000-600,000 metric tons expected by analysts. Corn inspections disappointed with 469,697 metric tons inspected for export and wheat met expectations at 557,109 metric tons.  


Keep a close watch on Corn which is breaking out of its consolidation pattern on the 100 day moving average. At Grain Hedge we believe it is quite likely that we retest $4 and probably move even higher based on the technical trading of the grain. Remember, the gap at $4.02 will likely act as resistance in the near future.  

October 05, 2015 | Grain Hedge Insights | Cody Bills | Views: 180
October 05, 2015 | Grain Hedge Insights | Cody Bills | Views: 163

Grains Higher Monday Morning

Wheat is trading higher Monday morning with dryness concerns in Australia and the Black Sea region.

In the overnight session the grains traded higher with corn up 1/2 a cent, soybeans up 3 3/4 cents and wheat up 3 cents. The outside markets are mostly supportive with the U.S. dollar lower by a fraction of a percent, the S&P trading marginally higher and crude oil up 56 cents this morning. Traders are anticipating the Friday release of the USDA October Supply and Demand Report.  


Wheat continues to move higher on dryness concerns in Ukraine and Russia. Both countries precipitation is running roughly 40 percent behind normal and forecasts of dryness and cold weather over the next 10 days continues to help support under wheat.


Egypt’s GASC purchased 60,000 metric tons of wheat from Ukraine and another 60,000 metric tons of Russian wheat with an average price of $199.72 dollars per metric ton.


Weather will remain mostly clear throughout this week with Thursday bringing some showers to the grain belt. The 6-10 day forecast shows drier than normal conditions throughout the majority of the grain belt with Ohio showing slightly wetter conditions. The 8-14 day forecast continues to bring dryness throughout the Midwest providing little opportunity for weather to disrupt harvest in the near term. 

October 02, 2015 | Grain Hedge Insights | Cody Bills | Views: 260
October 02, 2015 | Cody Bills | Views: 230

Markets Weaker on Supply Woes

Grains were modestly lower in the night trade with corn and soybeans off 2 cents a bushel, and wheat down 3. In other markets, S&P futures were up 0.4% while crude oil was up 1%.

Soybeans were hard hit in yesterday’s trade as news continues to be bearish from US harvest. Merchants continue to report bean yields are better than last year by 5 to 10 bushels per acre, and as yields grow, farmers are becoming more willing to make cash sales. Yesterday, FC Stone pegged the soybean crop at 3.919 BB, above their Sept outlook of 3.791 BB, but still below USDA’s Sept projection of 3.935 BB. For corn, they put the crop at 13.541 BB versus last month’s forecast of 13.457 BB and USDA’s 13.585 BB.

In international news, wheat has been moving higher thanks to dryness in Australia and Russia. However, US export business in wheat continues to disappoint with Thursday’s announcement of only 77,000 MT of wheat sales for the week compared to 250-450,000 MT expected. In South America, one private crop watcher estimates Brazil 2016 soybean crop closer to 99 MMT vs USDA of 97 MMT and Argentina closer to 60 MMT vs USDA at 57.

In stock futures, trading was higher overnight after a lower close on Thursday. Trading has been unpredictable so far this week ahead of this morning’s release of the jobs report for September. This release has taken on even more significance as Wall Street looks for signs U.S. economic strength is still intact after the Federal Reserve's decision to keep interest rates unchanged in September. Economists expect 200,000 jobs to have been added to nonfarm payrolls in September, up from 173,000 in August. The unemployment rate is forecast to remain steady at 5.1%, while year-over-year growth in average hourly earnings expected to climb to 2.4% from 2.2%.

Oil found strength this morning from ongoing fears about the escalating violence in Syria and expectations of strong economic growth domestically. The oil market was factoring in a risk premium over Syria, where Russia and the US are conducting bombing campaigns. The situation was complicated by the arrival of hundreds of Iranian troops in Syria to join a ground offensive in support of government forces, a sign the civil war is turning still more regional and global in scope. Oil is also being supported by economic optimism ahead of US data that is expected to show the creation of more than 200,000 jobs in September.

October 01, 2015 | Grain Hedge Insights | Cody Bills | Views: 212

Beans Turn Sharply Lower

Even with positive exports beans take a turn. Will they continue their break through the $8.78 mark?

October 01, 2015 | Grain Hedge Insights | Cody Bills | Views: 197

Grains Mixed in the Overnight

Outside Markets were higher for crude oil; S&P Futures were also marginally higher.

Grains were mixed overnight with wheat up 3 and soybeans up 2, but corn traded fractionally lower. Outside markets were higher for crude oil, gaining $0.85 a barrel or 1.9 percent while S&P Futures were marginally higher on a 0.13 percent improvement.


Yesterday’s quarterly grain stocks report had little follow through impact on market prices as inventory levels were mostly on par with expectations. The most bullish of the numbers was for wheat stock levels thanks to lower than expected spring wheat production. Wheat stocks on hand as of Sept 1 were 2,089 MB versus trade expectations of 2,149 MB. Soybeans were also lighter than expected with old-crop carryout pegged at 191 MB as compared to 205 MB. Corn was mostly on the mark as stocks were estimated to be 1,731 MB versus 1,739 MB.


Overall the report figures were deemed neutral by the trade and market participants will go back to watching crop harvest reports from the fields. So far, it would appear yields are coming in better than expected especially for soybeans. Merchants in IN & IL are saying soy yields from farmers are coming in very good and in most cases surpassing last year’s yield and in some instances reaching all-time highs.


In demand news, weekly ethanol output reported on Wednesday was up 5,000 BPD to 943,000 BPD. Overnight export news was relatively quiet with only Japan showing any noted interest in US commodities, by making a regular purchase of 128,489 MT of wheat to be sourced from the US, Canada and Australia. Weekly export sales reported this morning by USDA were better than expected for soybeans, on par with expectations for corn and worse than expected for wheat.



                                               Weekly Value                Pre-Report Estimates

Corn                                            748.2                              700-900

Soybeans                                      2,506                           1,300-1,700

Wheat                                          77.1                               250-450


In equity markets, S&P futures (ESZ5) were up nearly 1 percent in early night trade but retreated by the end of the overnight session to only a 0.2 percent gain. Equity markets on Wednesday recovered some of their losses improving about 1.5 percent on the day but closed out the third quarter of the year with its worst quarterly performance in four years. Despite the gains, the major indexes are still set to post steep losses for the quarter with the Dow down 8.9 percent for the third quarter in its worst performance since the third quarter of 2011 when the blue-chip index tumbled 12.1 percent. The rally on Wednesday was helped by encouraging news about the labor market. Businesses added 200,000 private sector jobs in September, according to a report by payroll processor ADP.


For crude oil (GCLX5 / QMX5), prices were up sharply as sentiment was boosted by a modest improvement in economic data out of China. China’s official purchasing manager’s index, a gauge of nationwide manufacturing activity, ticked up slightly last month to 49.8 from 49.7 in August, beating analysts’ expectations. Markets were also tracking the developments in Syria, where Russia launched its first airstrikes on Wednesday. The intervention added to the uncertainty in the Middle East, the world’s biggest oil producing region.

September 30, 2015 | Grain Hedge Insights | Cody Bills | Views: 182

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Grains Sluggish in the Overnight

October 12, 2015 | Grain Hedge Insights | Cody Bills

Grains were sluggish overnight with only soybeans showing significant movement, gaining 5 cents in the night trade.  Corn and wheat were mostly unchanged in the overnight.


Friday’s USDA report did little to change the mood in the markets, as only modest changes in US supply had little...

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