May 21, 2015 | Grain Hedge Insights | Cody Bills | Views: 199

Can export sales lift corn?

Export sales were positive this morning with strong old crop corn sales and a reportable sale announced early this morning.

In the overnight session the grains are trading higher, with corn up 1 1/2 cents, soybeans up 1 1/4 cents and wheat up 3 cents. The U.S. dollar is lower by 1/10th of a percent and crude oil is 48 cents higher. This morning a reportable export sale was announced for 152,400 metric tons of old crop corn to unknown destinations and 50,800 metric tons of new crop. Chicago wheat trades near its 100 day moving average (5.18 3/4) which has acted as strong resistance on Monday and Tuesday this week. Wheat traders are focusing on the heavy rains in the southern plains which have been causing concerns that the wheat will have quality issues at harvest. Wheat traders are also monitoring Russia whose forecast has turned dry over the next two weeks and whose crop is beginning to feel stress from the hot dry weather.


Export sales this week showed that wheat, corn and soybeans all met expectations. Wheat booked 74,400 metric tons of old crop sales and 128,200 metric tons of new crop. With analysts expecting to see as much as 200,000 metric tons of cancellations, this week’s sales were relatively positive. Old crop corn sales jumped 12 percent from the previous week with 812,600 metric tons booked above the 400,000-600,000 metric tons expected by traders. Soybeans also showed positive export sales this week with 165,500 metric tons of old crop sales which was a 21 percent improvement week over week. Soybeans continue to outperform sales expectations late in its export season.


Yesterday, the EIA weekly ethanol report showed a sharp jump in production by 46,000 barrels per day to a total of 958,000 barrels per day. This decisively ends the two week slump in ethanol production that brought weekly totals below 2013 levels. However, routine facility maintenance played a big role in the early may production slump and it appears production is picking back up again as we move into driving season. Ethanol production year to date is up 4.8 percent compared to the USDA’s expectations which only show a 1.3 percent increase YOY. Ethanol stocks also climbed by 135,000 barrels to 20.43 million barrels this week.  


A waterway leading to Argentina’s Rosario grain hub was blocked for the last two days after a ship ran aground. This disruption comes during the busiest season just following harvest

May 20, 2015 | Cody Bills | Views: 253

Ethanol Production Jumps

Ethanol production smashes through 2013 levels. Positive export sales are expected for the new crop grains.

May 19, 2015 | Grain Hedge Insights | Cody Bills | Views: 295
May 18, 2015 | | Views: 231
May 15, 2015 | Grain Hedge Insights | Cody Bills | Views: 335

Corn Basis Softens

Fundamentally, the grain market didn't see many changes. However, there are upcoming events that demand attention. Cody reviews these as well as weekly basis changes. Don't miss today's episode.

May 15, 2015 | Grain Hedge Insights | Cody Bills | Views: 291

Weekly Cash Comments

Weekly Cash Commentary for week ending May 15

Corn basis was mostly unchanged for the week with US average basis levels stagnate. However, a late week increase in futures prices but cash corn basis levels on the defensive. For soybeans, basis levels posted a modest 1-cent a bushel advance as nearby futures prices gave up 18 cents on the week.


In corn, Thursday’s 6-cent advance was met with relatively sharp drops in basis by corn merchants. Even Friday morning there was clear follow through with major plants in MN & NE posting lower basis compared to Thursday’s quotes. On average, ethanol buyers were off 1 cent a bushel but in the Western Cornbelt basis levels showed more weakness with some plants giving up 5 cents or more on the week. For export sensitive areas, basis levels were weaker thanks to a 2 cent drop at the Gulf. Upstream river terminals came under more pressure giving up 3 cents a bushel on average for the week.


For soybeans, USDA’s supply and demand report early in the week pointed to ample supplies of stocks in the coming growing season, and with near-term export business winding down, there seems like little incentive for end-users to aggressively bid higher for beans. At the Gulf, basis levels were up 3 cents a bushel, but river terminals on average only showed a 1-cent gain. For soy plants, there was only modest changes for the week with a 1-cent improvement on average. However, mid-week one Indiana plant was aggressively bidding up beans, but it was short-lived as pipeline supplies quickly filled the needs.

May 15, 2015 | Grain Hedge Insights | Cody Bills | Views: 315

NOPA numbers to be released mid-morning

Traders are anticipating NOPA crush numbers which are scheduled for release at 11 AM CST.

In the overnight session the corn traded a 1/4 cent higher, soybeans traded 2 cents higher and wheat in Chicago fell 2 1/4 cents. Wheat traded sharply higher in yesterday’s session fueled by rapid short covering and is now close to its 100 day moving average at 521 3/4 which will most likely offer up some resistance.


This morning Russia announced that they will remove the wheat export duty until a new formula can be introduced on July 1st. By removing the export duty, it is estimated that the country’s exports will increase by 1 million metric tons this marketing year.


Keep a close watch on NOPA crush numbers today which will be released out at 11 AM CST. Analysts are expecting to see April crush at 147.827 million bushels up from last year’s 132.667 million bushels. The average analyst guess pegs soyoil stocks to be at 1.461 billion pounds.


The climate prediction center is expecting to see El Nino continue throughout the summer in the northern hemisphere which may point to another year of optimal growing conditions. They estimated that there is a 90 percent chance that El Nino will continue through the summer and an 80 percent chance that El Nino will last through the end of the year.


Yesterday Informa announced it sees corn planted acreage at 88.737 million acres which is below the recent USDA most recent estimate of 89.199 million. Informa pegs its soybean acreage at 87.185 million acres which is 2.55 million acres over the USDA.

May 14, 2015 | Grain Hedge Insights | Cody Bills | Views: 275

Wheat Rallies Sharply

Cody gives an expert analysis of what moved the wheat market today as well as a break down of the export sales report.

May 14, 2015 | Grain Hedge Insights | Cody Bills | Views: 240

Can Export Sales Lift the Markets?

Export sales were released this morning revealing lackluster demand.

In the overnight session the grains moved higher with corn up 2 3/4 cents, soybeans up 1/4 cent and wheat up 8 1/4 cents. The dollar index continues to move lower this morning following yesterday’s April retail numbers. Crude oil is down 30 cents this morning trading around the $60 mark.


Export sales were relatively unimpressive this morning with old crop corn exports the biggest disappointment. Old crop corn sales were reported at 370,000 metric tons, down 56 percent from last week and missing expectations which ranged from 600,000-800,000 metric tons. Old crop wheat sales reported 115,000 metric tons which was on the high side of expectations which ranged from cancellations to sales of 100,000 metric tons. This week’s wheat sales were a significant improvement over last week’s 148,000 metric ton cancellations. Soybeans reported sales of 136,000 metric tons which was down 60 percent from the previous week and on the low end of expectations.     


Ethanol production jumped week over week by 25,000 barrels per day bringing total weekly production to 912,000 bpd. Despite the weekly improvement ethanol production is still in a downward trend that began in December. This week’s figures mark only the third time this marketing year that weekly production fell below 2013 levels. Cumulative ethanol production is up 4.8 percent from 2013, which is ahead of USDA expectations for an increase of 1.3 percent over last year. The May WASDE report left corn used for ethanol unchanged on the balance sheet.

May 13, 2015 | Grain Hedge Insights | Cody Bills | Views: 257

Grains Bounce on Weak Dollar

The sharp drop in the U.S. dollar has supported the grains this morning after Tuesday’s WASDE report.

In the overnight session the grains traded higher with wheat up 4 cents, soybeans up 5 1/2 cents and corn unchanged going into the morning pause in trade. The U.S. dollar is trading down sharply this morning after retail sales revealed no growth in April. Crude oil is trading up 78 cents this morning.


Yesterday the USDA released its May WASDE report which had little effect on corn and wheat, but sent soybeans into a tailspin by the end of the day.  Old crop soybean demand was revised higher by 20 million bushels to 350 million bushels after crushing and exports were increased by 10 million bushels each. The bullish old crop surprise was overshadowed by increased South American production and ominous new crop ending stock projections of 500 million bushels. The average trade guess expected new crop carryout to total 443 million bushels.


Old crop corn ending stocks increased 23 million bushels to 1.851 billion bushels which was shy of expectations. A 48 million bushel decline in feed and residual use was partially offset by a 25 million bushel increase in exports. New crop ending stocks were mostly on par with expectations with 15/16 carryout forecast at 1.746 billion bushels with a new crop yield pegged at 166.8 bushels per acre.


Ending stocks for old crop wheat were increased by 25 million bushels to 709 million bushels after the USDA bumped imports by 5 million bushels and slashed exports by 20 million bushels.  Export pace has been softening recently with the last couple weekly reports showing cancellations totaling to 597,000 metric tons. New crop wheat ending stocks were forecast at 793 million bushels which was above expectations of 750 million bushels. 


Global carryout for the 2015/16 marketing year looks to be higher than the expectations for soybeans and wheat. Global wheat ending stocks were pegged at 203.32 MMT up from 200.97MMT in 14/15 and above the average trade guess of 193.53 MMT. Global corn ending stocks are expected to hold mostly steady at 191.94 MMT compared to old crop carryout of 192.5 MMT. Global soybean carryout is expected to rise significantly to 96.22 MMT, above expectations of 95.17MMT and last years ending stocks of 85.54 MMT.   

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