Soybeans Exports Continue to Impress
Soybean export sales continue to impress during a period when sales are typically weak and pressured by South America.
In the overnight session the grains are mostly unchanged with corn down 2 3/4 cents, soybeans unchanged and wheat in Chicago up 3/4 of a cent. The U.S. dollar is up a fraction of a percent this morning and crude oil is trading 14 cents higher.
Export sales provided another strong week for corn and soybeans and yet again disappointed for wheat. Corn booked 841,000 metric tons which was above analyst expectations which ranged between 300,000-600,000. Soybeans reported strong export sales for the second week in a row by booking 338,000 metric tons which was on the high side of expectations which ranged from 0-350,000 metric tons. Soybean have booked a cumulative 49.4 million metric tons of sales which is well ahead of the roughly 44.6 million metric tons last year and the 45.8 million metric tons expected to meet current USDA expectations.
Wheat sales disappointed expectations this morning with cancellations of 148,000 metric tons. Analysts were expecting sales that ranged from -100,000 to 100,000 metric tons. New crop sales booked 446,800 metric tons which was up from the previous week but below the 4 week average.
Ethanol production on Wednesday fell 35,000 barrels per day to 887,000 barrels per day. The decline was the smallest weekly production data since the second week in November and was partly due to routine facility maintenance. Ethanol stocks declined 35,000 barrels to 20.76 million barrels this week. Despite the decline in production this week, overall ethanol production is still running 5 percent over last year.
Relative Strength in the Wheat Market
Cody talks ethanol production, stocks, and what caused wheat to trade sharply higher today.
Is Corn Ready for a Rebound?
The grains are mixed this morning as corn bounces of support found at $3.55 during yesterday’s session
In the overnight session the grains were mixed with corn up 1 1/4 cents, soybeans down a penny and wheat up 3 1/4 cents. Corn prices are moving higher after finding some support around $3.55 per bushel during yesterday’s trade session.
Yesterday, the Egyptian grain buyer GASC purchased 120,000 metric tons of wheat sourced from Russia and Romania. The Russian FOB wheat was offered at $194.22 per metric ton, the Romanian offer was $200 per metric ton and the U.S. wheat was offered at $227.50 per metric ton. Despite the sustained decline in wheat prices, U.S. wheat is still not competitive enough on the global market to trigger above average buying interest.
Yesterday marked day one for the annual Wheat Council’s survey of HRW fields. Throughout the next few days roughly 90 scouts are taking to the fields to survey the quality of the wheat crop which suffered from dryness in the early part of the growing season. The tour is scheduled to release their final yield forecast for Kansas wheat production on Thursday.
In Argentina, port activity returned to normal after a port workers strike vote was postponed. Argentina has been struggling with delays at export ports caused by stevedoring strike that left cargo vessels delayed.
This morning StatsCan announced that total wheat stocks in Canada on March 31st was 16.74 million metric tons down 25 percent from the previous year. Durum wheat on stock was reported at 2.32 million metric tons this year which was down from 4.01 million metric tons in 2014. Canola stocks were reported at 7.04 million metric tons down 18.9 percent from the previous year.
Grain Trends Update
As grains continue to trend lower, Cody looks at what it will take for them to break through.
Corn Planting Leaps Forward This Week
Corn planting jumped from 19 percent to 55 percent complete this week providing little reason to rally the grain.
In the overnight session corn and wheat traded lower by 4 cents apiece, while soybeans was able to continue showing relative strength by gaining 2 1/4 cents.
Crop progress showed that wheat crops rated good-to-excellent improved by 1 percent on Monday after two weeks of unchanged ratings. The precipitation over the last month has been beneficial for the wheat crop and the outlook favorable for continued moisture over the next two weeks.
Corn planting jumped 36 percentage points on Monday after a week of good weather. With 55 percent of the corn crop now planted, we are well ahead of the four year average of 38 percent planted. Soybeans are also ahead of pace with 13 percent planted across the 18 states that make up 92 percent of acreage. This is ahead of the four year average of 9 percent planted at this time of the year. Spring wheat is also ahead of pace with 75 percent of the crop planted, up 20 points from last week and well ahead of the 40 percent planted seen in the 4 year average.
Weather this week is expected to get warmer across the eastern half of the U.S. with precipitation in the Southern and Central Plains continuing to provide relief to the winter wheat crop. Expect to see corn and soybean planting delays this week as the western and central part of the grain belt are expected to receive above average rain fall.
Yesterday corn export inspections beat the average analysts guess by recording 1.25 million metric tons compared to expectations which ranged from 800 thousand metric tons to 1.25 million metric tons. Soybeans disappointed by only showing 100 thousand metric tons which below the range of analyst guesses. Wheat met expectations with 565 thousand metric tons inspected for export which was on par with last week’s numbers.
Crop Progress Update
Cody focuses on the planting progress for corn and soybeans as well as the winter wheat conditions report.
Market Awaits Crop Progress
The grains were mixed on Monday with corn and wheat cupping over on lows printed over the last two weeks
In the overnight session the grains were mixed with corn down 2 1/4 cents, soybeans up 3 3/4 cents and wheat down 4 3/4 cents going into this morning’s pause. Crude oil is trading about 17 cents higher and the U.S. dollar is up a 10th of a percent. A Taiwanese buyer issued a tender to purchase 50,000-65,000 metric tons of corn to be sourced from the U.S., Brazil or Argentina.
The Plains wheat has received a good amount of precipitation over the last three weeks and it seems as though the trend is unlikely to change. Rains are expected to start half way through this week and continue for the next two weeks. Precipitation seems to be evident in the 16-30 day forecast as well.
The market is anticipating the crop progress report out which will show the planting progress over the last week and give us an update on the condition of the winter wheat crop. The winter wheat crop rating has held steady at 42 percent good to excellent over the last two weeks after recent precipitation stalled the crops deterioration. On average over the last four years, corn planted during this time is 42 percent complete and 11 percent complete for soybeans. Spring wheat planting is well ahead of pace, with 55 percent of planting complete last week which was well ahead of the four year average of 29 percent.
Corn and soybeans appear to be trending lower this morning, cupping over on the lows printed in early April. The grains have been pressured recently by the increase bird flu detection throughout the state of Iowa which have forced the governor to declare a state of emergency. This is the third state behind Minnesota and Wisconsin to declare a state of emergency due to the outbreak in bird flu.
U.S. Dollar Gains Strength and Nationwide Basis Sees an Increase
Tune in for an update on the current bird flu situation and weekly basis changes.
Weekly Cash Comments
Cash Commentary for week ending 01 May
Corn continued to find selling pressure in the futures market this week giving up 8 cents a bushel, while soybeans were unchanged for the week. For cash markets, corn basis posted a modest 1-cent advance on average across the US while soybeans were unchanged on the week.
In corn, basis levels were up 3 or more cents a bushel along the Ohio River area and points to the south as barge rates gave up 4 cents a bushel this week on average. At the Gulf, export bids posted a 2 cent advance as two consecutive weeks of +800,000 MT of new sales for old-crop delivery keep basis levels for river terminals relatively firm. For ethanol plants, they showed no significant departure from the norm posting only a 1-cent advance on the week. Ethanol production for the week was down 9,000 barrels per day to 921,000 barrels per day. Plants in the Western Cornbelt bid up basis by around 2 to 5 cents a bushel.
For soybeans, river terminals were the biggest gainers of the week posting a 3-cent increase thanks to a 5-cent advance at the Gulf export market. Weekly export sales were up sharply on old-crop, with a 433,400 MT total for the week. For crushing plants there was little movement this week overall, but a few plants in the Southeast showed strong advances of 10 cents or more.
What Really Spurred on Intense Selling?
Monday Morning Sell-Off
In the overnight session the grains traded sharply lower with corn down 10 1/2 cents this morning, soybeans down 13 cents this morning and wheat down 5 1/2 cents this morning for the December contracts. The U.S. Dollar is trading over 1/2 a percent lower and crude oil is also lower, losing...[Read More]
Disappointing Price Action for the Week
Grains Continue Lower on Friday Morning
In the overnight session the grains traded lower with corn down 5 cents, soybeans down 7 cents and wheat down 5 cents. The U.S. dollar is higher by nearly ½ a percent and crude oil is 33 cents higher this morning. For Soybeans, the 50 percent retracement of the sharp rally in November...[Read More]
Will the U.S. Meet the Export Sales Forecast
Can Export Sales Lift Wheat?
In the overnight session the grains moved slightly higher with wheat showing the largest rebound, up 5 ¾ cents. Corn is trading unchanged this morning and soybeans is up ¾ of a cent. The U.S. dollar is moving nearly 1/3 of a percent lower and crude oil is up 12 cents per barrel. Export...[Read More]