April 06, 2015 | Cody Bills | Views: 476
April 06, 2015 | Grain Hedge Insights | Cody Bills | Views: 149

Wheat Higher on Continued Drought Concerns

The grains are mixed this morning with the exception of wheat which continues to move higher on concerns of intensifying drought across the plains.

In the overnight session the grains were mixed. Corn is trading up 1 1/2 cents, soybeans are unchanged and wheat is up 4 1/4 cents this morning on talks of extended Russian export taxes and expanding drought throughout the plains. At 2 PM CST the USDA will issue its first crop progress report which will provide a national winter wheat crop rating.


On Thursday April 2nd the latest drought monitor showed the plains has gotten drier, leaving nearly 36 percent of the plains in moderate to exceptional drought. Kansas wheat rated good to excellent has slipped 5 percent over the last month to 39 percent good to excellent. In the 6-10 day outlook the central and southern plains expected to continue receiving warmer than normal temperatures. With temperatures hitting 90 degrees in Texas, Oklahoma and Kansas this early there is a lot of concern for next year’s crop. Wheat is breaking dormancy right into a drought that is intensifying throughout the plains, causing traders to question short positions as uncertainty grows about next year’s wheat crop. 


The wheat is also supported this morning by speculation that Russia may extend a tax on wheat exports beyond this marketing year that ends on July 1st. Wheat in Ukraine and Russia received widespread rain over the weekend, accumulating .25-1.5 inches of rain over the past four days leaving only 15 percent of Russian wheat lacking adequate moisture.   


Ukraine farmers have now planted 1.6 million hectares this spring which is 69 percent of the expected plantings. Of the area planted 1.2 million hectares went to barley, 111,000 hectares went to spring wheat, 149,000 hectares went to oats and 141,000 hectares went to peas. Ukraine’s harvest is expected to decline this year to 53 million metric tons of grain.  

April 05, 2015 | Tech Talk | By Steve Davidson | Views: 705

Corn Research is Complex, Fast-paced and Promising

New generations are available faster; new techniques focus on external control, rather than gene modification

Corn Research is Complex, Fast-paced and Promising
Photo by AgReliant Genetics

Corn research and development is continually evolving in a complex, fast-paced and challenging environment. Corn breeders are using a broad range of techniques ranging from time-honored traditional plant breeding practices amplified by powerful tools such as biostatistical analysis to developing new approaches such as external applications of genetic materials for weed, insect and virus control.

Tom Koch, vice president of research for AgReliant Genetics gave attendees at the 119th annual convention of the National Grain and Feed Association a feel for the challenges and opportunities facing the seed industry.

Seed corn is produced globally. “There is world-wide diversity that we are tapping into now more than ever,” Koch says. “A lot of this diversity is getting locked up, as countries view their germ plasm as a national treasure.

“Where we do have access to use germ plasm, it’s bringing some very interesting and unique flavor to the U.S. market.”

He says that with new molecular analysis techniques, there will be more of a smorgasbord of hybrids for companies to offer.

Koch says his company, whose U.S. corn brands include AgriGold and LG Seeds, uses one of the most advanced and efficient forms of double haploid (DH) breeding technology to make new varieties ready for market much faster. “In three generations, this creates an instant homozygous line; traditionally, it has taken size or seven generations to get a true breeding line.”

GMO regulations have made corn breeding more complicated. Koch explained that many countries that don’t allow GM production by their farmers may allow production of GM seed, as long as it’s exported.

He cites Chile, as an example, where an AgReliant production facility is 30 miles south of Peru, where GMOs are forbidden. “We have to be very cautious about how we manage GM production,” he says.

Koch sees little change on the horizon regarding regional acceptance of current GM crops, notably Europe.

“But I think we are about ready to move past this current era and move into the next biotech sector, where we are not necessarily inserting genes into the plants,” he says.

These new practices include putting genetic materials – referred to as biological or biopesticides –  into the crop protectant spray. “The biological is applied outside of the plant. They don’t have to modify the plant itself. This has been done with seed treatments; now researchers are looking at doing it more on plants.”

From a plant breeder’s standpoint, Koch says this is exciting. “Working with a spray instead of the plant itself puts the plant breeder back in control of the genetics, instead of the biotechnician.”

He says of the 300,000 genes plant breeders manage, just 8 genes control the herbicide resistance. Without dealing with them, and the extensive regulatory cost and time they demand, more attention can go to overall improved genetics.

These sprays and biological seed treatments will be a very heavy area of research, he says. Regulatory challenges will be part of the puzzle, as to determining what specifically constitutes genetically modified in these types of scenarios.

Koch also shared his enthusiasm for the potential of airborne drones.  With them, he sees the ability to quickly and accurately analyze virtually every plant in a test plot for a wide range of agronomic variables, once the current questions by the Federal Aviation Agency regarding the commercial application of drones are resolved.

And, he says practices such as indirect selection accuracy and multi-trait genomic selection allows much faster and more accurate analysis of new lines of hybrids. Speed is valuable, considering that each new generation of a corn line is expected to deliver an increase in yield.

“Basically we’re trying to get more, test more, test it better, get new genetics and get better homogenous lines while decreasing the cycle length using many different techniques,” he says.

April 02, 2015 | Grain Hedge Insights | Cody Bills | Views: 256

Grain TV: Export Sales Report

Cody looks at the move higher for corn and wheat. He also breaks down the disappointing export sales numbers and dryness in the plains region.

Grain TV: Export Sales Report
April 02, 2015 | Grain Hedge Insights | Cody Bills | Views: 149

Grains lower on soft export sales

The grains turned lower in the overnight as the weekly export sales report revealed weaker than expected sales.

In the overnight session the grains traded lower with corn down 2 1/4 cents, soybeans down 8 cents and wheat down 3 cents. The Dollar is trading a bit lower this morning with crude oil off over a dollar a barrel. On Thursday the Saudi Arabia’s state grains authority issued a large international tender to purchase 715,000 metric tons of hard wheat for delivery between June to August. A reportable sale of new crop soybeans was reported for 118,000 metric tons to unknown destinations this morning.  


Export sales were disappointing across the grain complex this morning. Wheat sales were on the low end of expectations which only booked 162,100 metric tons compared to expectations between 100,000-300,000 metric tons. Corn sales fell 7 percent week over week booking 406,000 metric tons which was on the low side of expectations which ranged between 400,000-500,000 metric tons. Soybeans only booked 27,400 metric tons this week which was down 95 percent from last week and way below analyst expectations which ranged between 150,000-300,000 metric tons. Analysts have been expecting soybean export sales to start tapering off as the newly harvested South American crop becomes more competitively priced on the global market.


On Wednesday the EIA ethanol production data showed that output slid 1,000 barrels per day to 952,000 BPD. Ethanol production typically trends higher from February through May but we have not yet observed a notable increase in production during that time frame. Ethanol stocks also fell 770,000 barrels to 20.55 million barrels.  


In South America the Bueno’s Aires Grain Exchange increased their Argentina soybean production estimate to 58.5 million metric tons from 57 million metric tons, citing higher than expected yields as the reason for the increase. Port workers were into the second day of strike on Wednesday with more protests being threatened next week.  

April 01, 2015 | Grain Hedge Insights | Cody Bills | Views: 216
April 01, 2015 | Grain Hedge Insights | Cody Bills | Views: 125

Market to Continue Trading Acreage Numbers

With the prospective plantings report surprising most analysts with more corn acres and less soybean acres, the fallout to yesterday’s report will most likely to spill into today's trade session.

In the overnight session corn was mostly steady up 1/2 a cent, soybeans were up 5 3/4 cents and wheat in Chicago traded down 1 1/2 cents. Today we will most likely continue to see fallout from the Prospective Plantings report which was more bullish for soybeans and more negative for corn. Some buying interest has appeared in the overnight when a South Korean company announced they will be purchasing 140,000 metric tons of corn in an international tender and the Japan’s Ministry of Agriculture saying it will seek 120,000 metric tons of feed wheat and 200,000 metric tons of feed barley for September delivery.


Corn acreage surprised the market with 89.199 million acres compared to market expectations of around 88.7 million acres. Last year 90.6 million acres was planted for corn. The report showed soybean acres at 84.635 million acres compared to expectations of around 85.9 million acres and up .935 million acres from last year.


Quarterly grain stocks also showed more corn on hand as of March 1st compared to expectations. Corn stocks were reported at 7.745 billion bushels compared to expectations of 7.609 billion bushels. Soybean stocks were 1.334 billion bushels, 12 million bushels below expectations of 1.346 billion bushels. Wheat ending stocks were also lower than expected with 1.124 billion bushels reported as of March 1st compared to expectations of 1.140 billion bushels expected.  


Showers look to provide some opportunity for moisture in the Nebraska/Kansas border and provide better chances next week across Oklahoma, Kansas and Colorado. However, despite the opportunity for precipitation it is still unlikely that the moisture will provide meaningful relief to the core drought throughout the plains. More rains were seen across Europe, Ukraine and Northwest Russia yesterday with Eastern Europe and Russia expecting continued precipitation throughout the rest of the week helping to relieve the dry conditions that have been concerning wheat traders recently.  

March 31, 2015 | Grain Hedge Insights | Cody Bills | Views: 91

Grains Lower as Traders Prepare for Planting Intentions Report

All eyes will be on the planting intentions report this morning which will be released at 11 AM CST. Also out this morning was a sharp drop in the winter wheat conditions out of key producing states such as Kansas.

The grains are trading slightly lower today with corn down 2 cents, soybeans down 4 1/4 cents and wheat down 5 cents going into this morning’s pause in trade. Today at 11 AM CST the USDA will release its Prospective Plantings report as well as the Quarterly Grain stocks figures. Traders are looking for decreased corn acreage and increased soybean acres in this year’s report.


Here are the analyst expectations for this year’s prospective plantings report:

                                     Corn                     Soybean

Last Year                         90.6                         83.7

Reuters Poll                      88.7                         85.9

Lanworth                         88.2                         85.5

Informa Economics             88.5                        87.5

Farm Futures Magazine     88.34                       87.25

                                    Above table is in Million Acres


The expectations for the quarterly grain stocks as of March 1st are as follows. For corn the average analyst guess pegs quarterly grain stocks at 7.609 billion bushels with the highest estimate at 7.8 billion and the lowest estimate at 7.459 billion bushels. Wheat stocks are expected to be around 1.140 billion bushels with a range of analyst guesses from 1.2 billion bushels to 1.083 billion bushels. Soybean stocks are expected to be around 1.346 billion bushels with a range of guesses from 1.404 - 1.273 billion bushels. 


Winter wheat crop conditions were released today, showing Kansas wheat in good to excellent condition fell to 39 percent down from 41 percent last week. South Dakota wheat rated good to excellent fell to 35 percent from 49 percent a month ago and Nebraska wheat fell to 34 percent from 62 percent last month. Of the states that released their wheat crop conditions report Colorado, Montana, Arkansas, North Carolina and Illinois all saw improved conditions. Illinois wheat conditions improved to 52 percent from 47 a week a month ago, while Colorado conditions increased to 58 percent from 47 percent a week ago.  


Export inspections were released yesterday showing that 762,276 metric tons of corn was inspected this week, behind the analyst expectations of 800,000-950,000 metric tons. Wheat also fell short of analyst expectations with 322,016 metric tons inspected compared to expectations between 400,000-550,000 metric tons. Soybeans were the only grain that out performed analyst expectations with 655,720 metric tons compared to expectations of only 450,000-600,000 metric tons. 

March 30, 2015 | Cody Bills | Views: 261
March 30, 2015 | Grain Hedge Insights | Cody Bills | Views: 89

Wheat was higher in the overnight session.

Traders are awaiting the release of Tuesdays Prospective Plantings report.

Wheat was higher in the overnight session posting modest 4 cent gains while corn and beans were mostly unchanged in listless trade activity.


Wheat found support in the overnight session as concerns over dryness in the Plains continue to support prices. Weekend rains were nonexistent for the wheat belt and the outlook for the next 6 to 10-day period turned drier than was apparent in Friday’s long-term forecast.  The best chances for rain are late in the week with the likelihood at only 20 percent of any moisture being realized for much of the Southern Plains. Overnight, Jordan and Israel announced tenders for wheat with Jordan looking for 45,000 MT of feed wheat and Israel searching for 100,000 MT of hard milling wheat.  


In soybeans, prices were up in the night trade trying to reverse the last few sessions of lower price moves.  Traders are awaiting the release of the Prospective Plantings report on Tuesday, which is expected to show higher soybean plantings by US farmers.  Traders polled going into the report look for a 2 million acres increase over 2014.


For corn, analysts look for lower acres in Tuesday’s report. Pre-report trade estimates for corn acres came in at 88.7 million acres down from 90.5 the year prior.  If acres fall much below that, then carryout projections for new-crop would be getting close to 1 billion bushels and the market may be inclined to get more attention on the upside. But for now, traders continue to focus on sluggish export business and ample stocks.

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