February 27, 2015 | Grain Hedge Insights | Cody Bills | Views: 197

Weekly Cash Comments

Cash Commentary for week of February 27th

Corn basis saw modest growth this week advancing 2 cents a bushel on average across the country, but bean basis was unchanged thanks to higher futures and better farmer selling.


In corn, basis levels were up largely driven by strength at ethanol plants in the Western Cornbelt. On average, ethanol plants posted a 3-cent gains but in the Western Cornbelt plants were up 5 to 10 cents a bushel in some cases. This week’s ethanol production was off 17,000 barrels per day from the previous week, but year-to-date production is still well ahead of last year’s pace. At the Gulf, export basis gained 2 cents a bushel but river terminals on average were up slightly less than that. Southern stretches of the Mississippi river and the Ohio River saw corn basis strength this week.


For beans, average basis levels were flat across the country, but soy crushing plants as a group were off 2 cents a bushel. Deliveries appeared to pick up this week with soybean futures shooting higher early in the week thanks to the threat of a Brazilian trucker strike. Also, bad weather in the US eastern Cornbelt kept plants in Indiana and Ohio bidding higher for beans as farm movement slowed, while river terminals along the Ohio River encouraged farmers to deliver beans over corn to their facilities. On average, river terminal basis levels were unchanged for the week in spite of a 4-cent advance at the Gulf.

February 27, 2015 | Grain Hedge Insights | Cody Bills | Views: 185

Grains Higher Going into Friday

The grains are trading higher going into the Friday session as Brazil logistics concerns continues to stir up short covering on Soybeans.

In the overnight the grains traded higher with corn up ¼ of a cent, soybeans up 3 ½ cents and wheat up 6 ¾ cents going into this morning’s pause. Wheat seems to be bouncing higher this morning after holding a major support level of $4.92 ¼ which was the low back on February 2nd. Today is first notice day for March grain contracts.


The trucker strike continues in Brazil even after the Government offered truckers a year of free financing for vehicles from the state development bank, an offer to keep diesel prices unchanged for six months and to help truckers work out a framework for setting freight rates. This offer by the government resulted in some truckers ending their strike and clearing off the roadside, but many roads throughout Brazil are still blocked. Yesterday, in an attempt to break the trucker strike, the state Justice Minister said that the government would impose fines of about $1,700-$3,400 per hour on trucks who have blocked roadways. Despite the threat of fines truckers continue to block traffic throughout Brazil.


Weather forecasts in Brazil continue to show moisture in the forecast which has been interrupting the Safrinha corn planting pace. More rain is expected in the northern part of Brazil for the rest of the week and throughout the 6-15 day outlook. There are some slight concerns that the delays in planting could lead to additional acreage and yield loss throughout Moto Grosso.   


Yesterday Brazil’s Agro consultant released their latest forecast of 14/15 Brazilian soybean production pegging the crop at 94.7 million metric tons compared the USDA’s forecast in February of 94.5 MMT.

February 26, 2015 | Grain Hedge Insights | Cody Bills | Views: 349
February 26, 2015 | Grain Hedge Insights | Cody Bills | Views: 467

Export sales provide little support to the markets

Export sales were on the lower end of expectations this morning with corn missing expectations by a couple hundred thousand metric tons.

In the overnight session the grains traded mixed with corn and soybeans up 2 ¼ each and wheat trading 1 ¼ cent higher going into the morning pause in trade. Today is the last day to get out of any March grain contracts with first notice day Friday the 27th.


Yesterday at 11 AM CST trucker strike representatives met with the Brazil government to seek a resolution to the multi week long strike that has clogged roadways in Brazil. Following the meeting, Brazil minister says that the Government is not open to altering fuel tax to appease the striking truckers. However, the government followed that announcement by stating that the truckers are showing flexibility and that they expect a resolution will be reached soon.


Exports sales for corn were weaker than expected, while wheat and soybeans reported sales on the low side of analyst expectations. For the week ending February 19th corn export sales totaled to 715,800 MT which was down 23 percent from last week. Analysts were expecting to see corn sales between 900,000 and 1,100,000 metric tons. Soybean export sales were on the low side of expectations booking 459,200 MT compared to expectations between 450,000-650,000 metric tons. Soybean sales are still well ahead of the pace needed to meet USDA expectations. Wheat sales were reported 328,300 metric tons of sales, within the analyst expectations and up 23 percent from the previous week.


                                        Expected                   Actual

Corn                          900,000-1,100,000            715,800

Soybeans                       450,000-650,000            459,000

Wheat                          200,000-400,000            328,300


This morning the International Grains Council forecast the world wheat crop to increase 2 million metric tons to 719 MMT for the 14/15 marketing year. The IGC forecast a decline for the 15/16 marketing year to 705 MMT. 

February 25, 2015 | Grain Hedge Insights | Cody Bills | Views: 492

Ethanol Production out this Morning

Ethanol production seemed to be following the normal trend while maintaining a 5% advantage over last year's production. Resolutions look to be near for the South American truckers on strike.

February 25, 2015 | Grain Hedge Insights | Cody Bills | Views: 534

Soybeans slip in overnight after yesterday’s gains

Soybeans slipped a few pennies in the overnight session after yesterday’s rally. The Brazil trucker strike continues.

The grains are moving lower this morning with corn down a penny, soybeans down 4 cents and wheat in Chicago down 3 ½ cents. Yesterday’s rally in Soybeans sparked some farmer selling after prices rose sharply to an intraday high of $10.29. Keep a close watch on corn today as it trades next to a support level of 3.76 cents which was a previous low on in November, December and the middle of January. This morning a reportable sale of 120,000 metric tons of HRW wheat to Egypt was announced.   


The Brazil trucker strike and blockade continues this morning although a main road to the Port of Santos was cleared early Wednesday. Even though the striking trucks were dispersed along that stretch, congestion remains an issue with a large amount of trucks looking to use the road soon. The Attorney General stated that they will begin levying significant fines if the strike continues to grow. Despite the threat of large fines, the strike continues throughout many of the countryside roads as truckers protest the increase in diesel prices. Traders are still concerned that the flow of grain to ports and the flow of diesel to small towns which fuel combines will cause slowdowns and delays in weeks to come.


Also in Brazil, scattered showers will continue Thursday through Sunday and continue to disrupt corn planting. Corn planting is about a week behind normal and the 6-15 day forecast showing very few windows of opportunity for corn planting between precipitation events.   

February 24, 2015 | Grain Hedge Insights | Cody Bills | Views: 506

Strong Day for Soybeans

Soybeans were on the rise following strikes in Brazil. Cody and Kevin break down news from Europe that seemed to put selling pressure on wheat later in the day.

February 24, 2015 | Grain Hedge Insights | Cody Bills | Views: 574

Soybeans Up on Uncertainty of Brazil Logistics

Soybeans are trading higher this morning as truckers block roadways in Brazil protesting higher fuel taxes.

This morning the grains are trading higher with corn up 1 ½ cents, soybeans up 9 cents and wheat up 1 cent. Soybeans are trading higher on concerns about supply disruptions out of Brazil due to the truckers who are protesting higher fuel prices by blocking main roads across Brazil. Traders are concerned that the lack of transportation will leave small towns without fuel to power combines during the harvest, and generally delay the movement of grain to ports.


Yesterday export inspections were better than expected for both corn and wheat. Corn recorded 900,965 metric tons of grain leaving the country which was higher than market expectations which ranged from 700,000-850,000 MT. Wheat export inspections were recorded at 501,458 metric tons which were around 100,000 above the high side of expectations. Soybean showed 961,749 metric tons were inspected for export which was down from 1.3 million metric tons inspected last week and on the low side of analyst expectations.


Egypt’s GASC announced yesterday that they are seeking 55,000-60,000 metric tons of U.S origin wheat after prices declined late last week. Egypt canceled a tender for U.S. wheat last Wednesday citing that prices were exaggerated. Since the close of Wednesday’s session, wheat prices have fallen 22 cents.


The weekly Texas crop conditions report showed that the percentage of wheat crop rated good-to-excellent was 44 percent, unchanged since last week. Poor-to-very poor was also unchanged at 14 percent.   

February 23, 2015 | Cody Bills | Views: 387
February 23, 2015 | Grain Hedge Insights | Cody Bills | Views: 218

March Grain’s First Notice on Friday

First notice day for March contracts is Friday the 27th. Traders not looking to take delivery on grain should exit positions or roll to the May contract.

The grains are trading mixed this morning with corn down ¾ of a penny, soybeans up 4 ¼ cents and wheat down 1 ½ a cent. This Friday the 27th is the First Notice day for March corn, soybeans, wheat, KC wheat and MN wheat. Hedgers that are not looking to take delivery should exit their March positions or roll into May contracts.


Truckers in Brazil are protesting higher diesel prices by using road blocks and parking rigs on the shoulders of Highway BR 163 to interrupt harvest grain flow throughout the country. The protest began on Wednesday in two small towns with a group of transportation companies and independent truckers but quickly spread to surrounding towns. Truckers are looking for the state government to reduce the diesel tax.    


A few tenders have been offered this morning including an optional origin tender by Jordan’s state grain buyer to purchase 100,000 metric tons of hard milling wheat and another Israeli private tender to purchase up to 90,000 metric tons of corn and 25,000 metric tons of feed wheat.


The CFTC commitment of traders report showed that large speculators which includes hedge funds, cut their long corn positions for the week ending February 17th and lessened their short wheat and short soybean position. 

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