September 17, 2015 | Grain Hedge Insights | Cody Bills | Views: 250

Exports in Line with Expectations

Grains are pulling back a bit this morning after a few days of higher prices following the USDA WASDE report.

In the overnight session the grains traded lower with corn down 4 cents, soybeans down 5 3/4 cents and wheat down 3 1/2 cents. The U.S. dollar is also trading lower by .26 percent and crude oil has slipped 55 cents. The number of unemployment applications fell last week by 11,000 to a seasonally adjusted 264,000 for the week ending September 12th which is a sign that the labor market is improving.


Export sales were in line with expectations this morning for all the grains. Corn booked 533,000 metric tons within expectations which ranged from 400,000-600,000 metric tons. Soybeans also met expectations with 912,000 metric tons sold this week. Soybean sales were mostly made up of sales to China and unknown destinations. Wheat booked 377,500 metric tons which was up 30 percent from last week. Wheat sales were within the expectations which ranged from 275,000-450,000 metric tons.  


Ethanol production increased week over week by 3,000 barrels per day to 961,000 barrels per day. This is a strong start to the new marketing year, already 34,000 barrels ahead of last year during the same time period. Ethanol stocks declined this week by 351,000 barrels to 18.29 million barrels.    


This morning Strategie Grains cut its forecast for the 2015 EU corn crop by 2.3 million metric tons to 57.4 million metric tons. The company also raised their forecast for EU soft wheat by 3.5 million metric tons to 147.5 million metric tons. 

September 16, 2015 | Grain Hedge Insights | Cody Bills | Views: 236
September 16, 2015 | Grain Hedge Insights | Cody Bills | Views: 315

NOPA Crush Met Expectations

In the overnight session the grains traded mostly lower with corn down 1 1/4 cents, soybeans unchanged and wheat down 1 1/4 cents.

NOPA Crush Met Expectations

In the overnight session the grains traded mostly lower with corn down 1 1/4 cents, soybeans unchanged and wheat down 1 1/4 cents. The U.S. dollar is trading down .09 percent and crude oil is up $1.10 to $45.68 per barrel. The markets are eagerly waiting the Federal Reserve meeting later on Wednesday which will discuss whether or not they will increase rates on Thursday.


Yesterday, the NOPA crush numbers were released at 11 A.M CST and met expectations. August crush was reported at 135.304 million bushels compared to the average analyst guess of 135 million bushels. Although this crush number slipped lower from July’s 145.227 million bushels it is still well over the four year moving average of 117.414 million bushels and the largest August crush since 2007. Soyoil stocks were reported at 1.480 billion pounds which is higher than 2014 soyoil stocks of 1.213 billion pounds. Soymeal exports were reported at 491,510 metric tons.


Temperatures are forecast to be above normal this for most of the grain belt which will be pushed out toward the end of the week by a cooling trend in the northern plains. Precipitation will be light in the western part of the U.S with some moisture expected in Missouri, Eastern Iowa, Illinois and Indiana on Friday and Saturday.


Harvest in Ukraine is now 72 percent complete with an average yield of 3.61 metric tons per hectare according to the agriculture ministry. So far this year Ukraine has harvested 38.3 million metric tons of grain for the 2015 crop. 

September 15, 2015 | Grain Hedge Insights | Cody Bills | Views: 253

Grain Prices Lower this Morning

NOPA Crushings Report to be Released Today

Grain had trouble holding on to Monday’s gains as prices were lower across the board going into the morning break. At the close, corn was off 2, wheat was off 5, and soybeans were fractionally lower.


Grains found strength on Monday led by wheat were concerns about Brazil’s crop which saw two consecutive frosts over the weekend. Parts of the southern state of Rio Grande do Sul saw deep frost Friday night and more freezing temperatures on Saturday night, said Pedro Aguiar, of Cotrisa cooperative in northeastern Rio Grande do Sul. Also giving the market a bit of a boost was a better than expected wheat export inspection report on Monday which showed 647,000 MT versus trade expectations of 325,000 to 475,000 MT. Soybeans also came in better than expected at 370,000 MT versus trade estimates of only 150,000 to 350,000 MT. Only corn failed to meet expectations with a sub-par week of 711,000 MT as compared to 775,000 to 950,000 MT expected.


After the close on Monday, USDA reported corn harvest at 5 percent complete across the US, lagging slightly the 5-year average of 9 percent at this time of year. The condition of the corn crop was unchanged with 68 percent of the crop rated as good-to-excellent. For soybeans there was a surprising dip in conditions with 61 percent of the crop good-to-excellent as compared to 63 percent last week.

Today, the NOPA monthly soybean crushings report is expected to show a strong pace for August as total crushings are expected to reach 135.018 million bushels. If realized, that would be the highest total for the month since 2007, when members' soy crushings totaled 137.564 million bushels.


In financial markets, the Fed will begin meeting this week to discuss the possibility of an interest rate hike. While expectations for a rate increase at this week’s Fed meeting have declined over the past month, many investors remain hesitant to place big bets ahead of Thursday’s announcement.  This morning, U.S. consumer spending appeared to grow at a fairly healthy pace in August, pointing to solid domestic demand. The Commerce Department said on Tuesday retail sales excluding automobiles, gasoline, building materials and food services increased 0.4 percent after an upwardly revised 0.6 percent increase in July. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Core retail sales were previously reported to have increased 0.3 percent in July.

September 14, 2015 | Grain Hedge Insights | Cody Bills | Views: 161

Grains found modest strength to open the week

Action following Friday's USDA Supply and Demand report tepid.

Grains found modest strength to open the week with soybeans leading the complex on a 6-cent advance, wheat posted a 3-cent gain, and corn followed on a one-cent improvement.


Action following Friday’s USDA supply and demand report seems somewhat tepid this morning. Friday’s report was mildly bullish for corn and modestly bearish for beans and wheat. But, the central theme of the supply and demand data continues to be large carry-outs for all crops. With harvest fast approaching it seems unlikely that this report will prove to be a catalyst for upside potential in the next 30 days.


In wheat, eyes are on Russia this week to see if the government there will reduce the tax, which stops traders from fully capitalizing on Russia's weaker rouble. Russia's Agriculture Ministry said it will raise the purchase prices for its grain intervention fund and has drawn up proposals to ease the burden of wheat export duty, Deputy Agriculture Minister Evgeny Gromyko said on Saturday.


For beans, traders will look for demand side news on Tuesday when the August NOPA crush estimate is released. Export business for both corn and beans has been relatively good in recent weeks, but going into the 2015 marketing year, new-crop sales are still lagging behind last year’s pace. Both corn and soybeans have less than 30 percent of last year’s commitments but USDA’s official forecast for 2015 has only a 6 percent drop expected for soybeans and 1 percent slip in corn. The lack of strong export demand could hamper the prospects for a long-term rally.

September 11, 2015 | Grain Hedge Insights | Cody Bills | Views: 285

Weekly Cash Comments

Cash Commentary for week of September 11

Soybean basis was off yet again this week as old-crop premiums get closer to new-crop fall delivery levels. For the week, soybean basis was off 7 cents a bushel on average, while corn basis was unchanged for the week.


In corn, basis levels were mostly flat this week although there were some notable improvements along the river terminals as basis levels at the Gulf firmed 2 cents a bushel. River terminals as a group were up 1 cent a bushel, but most of the strength was confined to the Mississippi River south of St Louis. For ethanol plants, basis levels on average were weaker by a penny this week. However, some key plants showed losses of a nickel or more especially in the Western Cornbelt.


For soybeans, soy crushing plants continued to be a leader to the downside this week with losses of 10 cents on average. Double digit losses up to 20 cents a bushel were fairly common this week across the plants. For river terminals, there was actually some modest strength this week thanks to a 6-cent advance at the Gulf. As a group, river terminals were up 1 cent a bushel.

September 11, 2015 | Grain Hedge Insights | Cody Bills | Views: 307

USDA Supply and Demand Report Expectations

Traders will be looking for crop revisions in today's USDA Supply and Demand report.

In the overnight session the grains were mostly unchanged with corn up 1/4 cent, soybeans up 2 1/1/2 cents and wheat down 1/2 a penny. The dollar is trading a fraction of a percent higher and crude oil has fallen $1.32. This morning there was a reportable new crop sale of 180,000 metric tons of soybeans to unknown destinations.


The latest WASDE report will be released at 11 AM CST today. The August report produced significantly higher yield estimates and ending stocks than the market was looking, especially after the drowned acres and excessive rains damaged the crop in the eastern grain belt. The August surprise sent prices tumbling for the next month, so what is in store for the September report?


The September report is expected to bring slightly lower corn and soybean yield forecasts according to the latest Reuters poll of 20 analysts. The average analyst is guessing that corn yield will be 167.6 bushels per acre compared to 168.8 bushels per acre last month, with ending stocks declining 70 million bushels to 1.643 billion bushels for the 15/16 corn crop. In the latest forecasts from Planalytics, Pro Farmer, Informa and FC Stone three out of the four company's project yield at least two bushels below the August USDA forecast. Planalytics currently sees corn yield at 166.8 BPA, Pro Farmer projects 164.3 BPA, FC Stone forecasts 165.9 BPA.  Informa corn yield is currently matching the August USDA expectations. Both Informa and FC Stone increased their yield estimates this month from around 165 bushels per acre last month.


Analysts are also expecting soybean yield to decline but only by a modest .5 bushels per acre to 46.4 BPA. Planalytics, Informa and FC Stone all increased their yield forecasts this month as weather throughout August remained mostly optimal for the oilseed’s development. Ending stocks are expected to decline to 415 million bushels which is still a burdensome carryout.


Global ending stocks are also expected to decline this month with expectations for global corn ending stocks at 193.44 million metric tons compared to 195.09 million metric tons last month. Global soybean ending stocks are expected to fall to 86.21 MMT from 86.88 MMT in August, and Wheat ending stocks are expected to rise this month to 221.90 MMT from 221.47 MMT last month.   


Export sales were strong this morning for both old crop and new crop. Old crop corn beat expectations with 411,200 metric tons of sales with analysts anticipating cancelations around 50,000 metric tons. Old crop soybean sales also beat analyst expectations with 1,790,200 metric tons of sales. New crop sales were very strong also with corn booking 1.9 million metric tons and soybeans booking 2.6 million metric tons of sales this week which were well over the range of analyst expectations. 

September 10, 2015 | Grain Hedge Insights | Cody Bills | Views: 260

Strong Ethanol Production

Cody looks at ethanol production and stocks as well as expectations for tomorrow's export sales report.

September 10, 2015 | Grain Hedge Insights | Cody Bills | Views: 272

Market Eyes Friday’s Report

With the market eyeing the UDSA report on Friday here is the yield forecast of some top analysts.

In the overnight session the grains are trading mostly lower with corn down 3/4 of a cent, soybeans down 3 3/4 of a cent and wheat up 1 1/2 cents. Crude oil is trading pennies higher and the U.S. dollar is trading down .1 percent. Export sales will be released on Friday due to the holiday shortened week. This morning, the weekly jobless claims report showed new unemployment applications dropped 6,000 to a seasonally adjusted 275,000 this week which was generally regarded as improvement in the strength of our labor market.


Tomorrow we will also see the USDA release their September Supply and Demand report as well as their Crop production report at 11 AM CST. Below are some analyst’s forecasts for corn and soybean yield.  


In August the USDA pegged U.S corn yield at 168.8 bushels per acre and soybean yield at 46.9 bushels per acre which dropped prices in a sharp sell-off following the release of the report. In the latest forecasts from Planalytics, Pro Farmer, Informa and FC Stone three out of the four company’s project yield at least two bushels below the current USDA forecast. Planalytics currently sees corn yield at 166.8 bushels per acre, Pro Farmer projects 164.3 BPA, FC Stone forecasts 165.9 BPA and Inform corn yield matches the August USDA expectations of 168.8 bushels per acre. Both Informa and FC Stone increased their yield estimates this month from around 165 bushels per acre last month.


Soybean yield appears to be increasing with Planalytics, Informa and FC Stone all increasing their yield forecasts this month. Since the USDA pegging soybean yield at 46.9 bushels per acre in the August, the oilseed has continued to selloff. Planalytics yield this month projects soybean yield at 46.2 bushels per acre and increase of .3 BPA from the previous forecast. Pro Farmer forecasts 46.5 bushels per acre soybean yield only .4 bushels under the USDA. Informa increased their yield forecast this month by 1.6 bushels per acre to 47BPA and FC Stone also increased their yield estimate, but only by.4 bushels per acre to 45.4 BPA. 

September 09, 2015 | Grain Hedge Insights | Cody Bills | Views: 300

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