July 16, 2015 | Grain Hedge Insights | Cody Bills | Views: 295

Grains Pop Thursday Morning

The grains popped in the overnight session Thursday morning.

In the overnight session the grains are trading higher with December corn up 6 3/4 cents, November soybeans up 8 3/4 cents and wheat in Chicago up 4 cents. The U.S dollar is trading up nearly ½ a percent and crude oil is up 26 cents this morning.


Old crop export sales showed weekly declines for both corn and wheat.  In the weekly sales report wheat booked 291,500 metric tons which was a 16% decline from the previous week. Corn sales were a marketing year low, declining 38 percent from the previous week with 331,100 metric tons sold. Soybeans showed positive sales with 45,500 metric tons booked which is expected considering the time of year.  New crop sales were strong for soybeans booking 507,000 metric tons for 15/16 delivery. New crop corn sales were also strong with 325,100 metric tons sold, up from only 149,010 metric tons sold last week.


Yesterday’s ethanol production numbers from the EIA showed production has fallen 3,000 barrels per day week over week to a total of 984,000 barrels per day. Although this was a slight decline from last week it was better than expected and is 41 million barrels per day ahead the same week last year and 106 million barrels per day ahead of the moving average. Ethanol stocks also fell 101,000 barrels to 19.74 million barrels this week.


June NOPA crush numbers were higher than expected with 142.473 million bushels crushed in the month of June. This beat the average guess of 141.478 million bushels and is up substantially from last year’s June crush number of 123.117 mbu. Soyoil stocks were reported at 1.574 billion pounds. 

July 15, 2015 | Grain Hedge Insights | Cody Bills | Views: 241
July 15, 2015 | Grain Hedge Insights | Cody Bills | Views: 209

Can Prices Hold onto their Gains?

With the weather clearing up for the grains and resistance in the charts, can corn and soybeans continue their move higher?

In the overnight session the grains traded lower with corn down 2 3/4 cents soybeans down 5 3/4 cents and wheat down 7 cents this morning. The U.S dollar is up a 1/4 of a percent and crude oil is down 35 cents this morning. China’s stock market turned lower in the second half of Wednesday’s trading session closing 3 percent lower. China’s selling pressure in the equities could have a negative impact on soybeans this morning.


Weather over the next 8-10 days is looking to provide drier conditions for the corn crop throughout the Midwest providing Missouri and the eastern grain belt a break from the heavy rains that have saturated soils and damaged yield potential throughout the east. With the weather turning positive for crop development, and crop ratings unchanged in the latest crop progress report, the grains may give back some of the recent price gains. Producers should seriously consider some sort of price protection at this juncture. Give the office a call at 877-472-4607 if you have questions about your situation.


The charts are also raising a warning flag for corn in particular. December corn reached a critical resistance level of $4.54 yesterday which was near a previous low set back in January and again in June of 2014. That price level which acted as support in 2014 acted as strong resistance on Tuesday. Furthermore, the 100 period moving average on the weekly chart is currently at $4.40, and could also provide some resistance to any attempted move higher. With the weather turning positive and the charts showing clear resistance around these levels we are concerned that prices could come under pressure over the next few weeks. 

July 14, 2015 | Grain Hedge Insights | Cody Bills | Views: 340
July 13, 2015 | Grain Hedge Insights | Cody Bills | Views: 255
July 13, 2015 | | Views: 323
July 13, 2015 | Grain Hedge Insights | Cody Bills | Views: 266

Traders eager for Crop Conditions Report

With the USDA keeping the July yield forecast unchanged more focus will be on today's crop conditions report to confirm that the heavy rain over the last few weeks has in fact damaged crop development.

In the overnight session, the grains are trading slightly lower with corn down 1 1/4 cents on the September contract, soybeans down 7 1/4 cents and wheat down 4 3/4 cents going into this morning’s pause in trade. The U.S dollar is trading up 1/2 a percent and crude oil is down 70 cents this morning.


On Friday the USDA released their July WASDE report which showed no yield revisions from the previous month. The average trade guess, however, was expecting to see a 1.1 bushel per acre decrease in soybean yield and a 1.4 bpa decrease in corn yield. Traders seemed to brush off the absence of any significant yield revision with expectations that yield is more likely to be revised in the August report anyway. There will be increased focus on today’s crop conditions report as traders look for confirmation that heavy rains have damaged crop development.   


In the July WASDE report old crop ending stocks were slashed more than expected for both corn and soybeans. Corn ending stocks fell 97 million bushels to 1.779 billion bushels and soybeans fell 75 million bushels to 255 million bushels. For corn, old crop demand revisions included a 50 million bushel increase to feed use, a  25 million bushel increase to exports and a 25 million bushel increase to corn used for ethanol.  The revisions in soybean demand included a 15 million bushel increase in exports, a 15 million bushel increase in crushing’s and a 44 million bushel increase to the residual category.


Global ending stocks for corn fell from 195.19 MMT in June to 189.95 MMT in July. New crop soybean ending stocks fell from 93.22 MMT in June to 91.8 MMT in July. Global wheat stocks saw a surprisingly large increase which was primarily a result of higher beginning stocks and lower feed use out of China. New crop global wheat ending stocks jumped to 219.81 MMT from just 202.40 MMT in June. The increase was well above analyst expectations and played a role in keeping wheat from closing higher on Friday.   

July 10, 2015 | Grain Hedge Insights | Cody Bills | Views: 299
July 10, 2015 | Grain Hedge Insights | Cody Bills | Views: 275

Weekly Cash Comments

Cash Commentary for week ending July 10th

Grain basis was mostly stable this week as farmer selling was limited following the sell-off in futures after the June 30th USDA report. On average across the US, both corn and soybean basis was mostly unchanged.


In corn, flooding in Missouri and southern Illinois continues to take its toll on crop production as well as hamper barge movements along the Mississippi River. Water levels are expected to crest in the next week and could continue to plague barge movements. In Missouri and Southern IL basis levels were stronger than the rest of the country showing 2 to 4 cents a bushel. In ethanol, plants were mostly unchanged this week although Western Cornbelt plants were generally weaker than plants in the Eastern Cornbelt.


For soybeans, there was noticeable strength by soy crushing plants this week with the average basis across plants rising by 4 cents a bushel this week. Plants in the Eastern Cornbelt showed the most strength with several key facilities up 10 cents a bushel this week. On the river, basis was also firmer by 2 cents a bushel.

July 10, 2015 | Grain Hedge Insights | Cody Bills | Views: 324

WASDE Expectations

The market is trading higher this morning with anticipation for the July WASDE report. See the expectations below.

In the overnight session the grains continued higher with corn up 3 cents, soybeans up 8 1/4 cents and wheat trading 6 1/2 cents higher. The U.S. dollar is trading 1 percent lower and crude oil is up 48 cents this morning. Keep in mind that the July Supply and Demand report will be released at 11 CST today.


In a poll conducted by Reuters the average analyst guess was for old crop corn and soybean ending stocks to be lowered substantially which would reflect the lower than expected quarterly grain stocks figure released on June 30th. Analysts are also expecting 15/16 corn and soybean production to be lowered due to the excessive rains over the last few months.


Analysts are expecting old crop corn ending stocks to be revised lower by 65 million bushels to 1.811 MBU reflecting the smaller than expected quarterly grain stocks reported in the June 30th quarterly grain stocks report. Soybean ending stocks are also expected to decline to 287 million bushels from 330 million bushels in the last WASDE report.


New crop ending stocks for corn and soybeans are also expected to be revised lower as a result of the heavy rains which has prevented planting throughout Missouri and drowned and damaged crops throughout the eastern grain belt. Analysts are expecting 15/16 corn ending stocks to be 1.54 billion bushels, down from 1.771 billion bushels in the last WASDE report. The average trade guess for soybean ending stocks is 370 million bushels from 475 million bushels in June.  Analysts expect yield to be lowered by about a bushel per acre for soybeans and 1.4 bushel per acre for corn.  


Next week should bring highs in the 80’s and low 90’s early in the week and provide more precipitation for the northwestern states, a positive for crop growth and yield potential in that region. Rains are expected to be above average throughout the eastern grain belt including Indiana and Ohio which are already saturated.  

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