May 01, 2015 | Grain Hedge Insights | Cody Bills | Views: 176

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.  

May 01, 2015 | Grain Hedge Insights | Cody Bills | Views: 171

Grains Mixed Headed into Friday

The grains were mixed going into Friday's trade session with more strikes at Argentina ports stalling export activity.

In the overnight session the grains are mostly steady with corn down 1/4 of a penny, soybeans off a half penny and wheat up 1 1/4 cents. The U.S. dollar is up a fraction of a percent and crude oil has fallen 18 cents.


Yesterday, the Buenos Aires grain exchange reported an increase in their soybean production forecast to 60 million metric tons from 58.5 million metric tons in their previous forecast. The exchange also increased expectations for the corn crop to 25 million metric tons from 23 million metric tons.  Argentina ports have been mostly at a standstill as the docking and loading services have been shut down due to a labor strike over the last two days. The strike has affected 25 ports from the city of Rosario to Timbues.


More bird flu was detected yesterday in an Iowa-based farm affecting only 19,000 birds this time. However, this is the first detection of the bird flu in a broiler breeding farm which typically holds tight bio security.


Weather next week should bring some showers early on with minimal impact on planting progress. The plains region should see ample precipitation in the 11-15 day forecast with a wet outlook in the 16-30 day outlook as well. Wheat should continue to be pressured as the weather models provide relief to the plains region.  

April 30, 2015 | Grain Hedge Insights | Cody Bills | Views: 183
April 30, 2015 | Grain Hedge Insights | Cody Bills | Views: 118

Surprising Export Sales

This morning export sales surprised analyst expectations with wheat seeing significant old crop cancellations and soybeans booking over 400,000 metric tons of old crop sales.

In the overnight session the grains moved higher with corn up 1 1/2 cents, soybeans up 6 1/2 cents and wheat up 3 1/4 cents going into this morning’s pause in trade. The dollar index was trading lower most of the night, but has found some buying support underneath the 100 day moving average and is now trading near the open of last night. Crude oil is up 41 cents this morning.

This morning’s export sales report held some surprises particularly for wheat which showed net cancellations for old crop sales. Wheat sales recorded a marketing year low for old crop when it showed 449,200 metric tons of old crop cancellations. New crop wheat sales only totaled to 852,900 metric tons supported by some old crop sales being switched over onto the new crop books. Corn export sales were down 4 percent week over week, booking 832,500 metric tons for old crop delivery. Soybean sales were very strong this week with 433,400 metric tons booked which is a sharp increase from the 102,100 metric tons booked last week. With South America on the downhill side of harvest, it is unexpected to see such a large week of U.S. soybean sales.

Ethanol production fell 9,000 barrels per day last week to 921,000 barrels per day. Ethanol stocks slipped 545,000 barrels to 20.8 million barrels this week as well. Ethanol production has been steadily declining since this year’s production highs in November. Typically, we would expect to see a seasonal increase in production between March and May as we head into driving season, but we have yet to observe a relative increase in ethanol production during this time period. Ethanol production is running 5.2 percent ahead of last year’s pace which is well ahead of the USDA expectations of an increase in production by 1.3 percent. 

April 29, 2015 | Grain Hedge Insights | Cody Bills | Views: 176
April 29, 2015 | Grain Hedge Insights | Cody Bills | Views: 212

Dollar Sinks on Weak U.S. GDP

The grains are trading slightly higher, lifted by a falling dollar after GDP numbers disappointed traders this morning.

In the overnight session corn was up 2 1/2 cents, soybeans up 1/4 of a cent and wheat increased 3 1/2 cents. A reportable sale was announced yesterday with 390,000 metric tons of new crop soybeans sold to unknown destinations. This morning another reportable sale was announced for 130,000 metric tons of old crop corn to Taiwan.


The U.S dollar is trading lower by over 1/2 a percent this morning after U.S. GDP released worse than expected numbers. GDP fell sharply in the first quarter to .2 percent annually as a result of low crude oil prices and harsh weather conditions slowing spending. This was a sharp decline from last year’s fourth quarter which reported GDP of 2.2 percent annually.    


Yesterday’s trade activity was volatile for soybeans and has me questioning whether or not the commodity can continue higher in today’s session. Soybeans started out strong in yesterday’s session, climbing to $9.88 at the high of the day. However, the oilseed was unable to hold onto the gains and losing 7 cents in the last 45 minutes of trading. On the daily chart, soybeans struggled to rise above the 50 day moving average which has acted as strong resistance recently.


The weather looks positive for planting progress throughout the majority of the grain belt for the rest of the week. Showers will continue to delay planting in the Delta with substantial amounts of planting still left to complete in that region.   

April 28, 2015 | Grain Hedge Insights | Cody Bills | Views: 169
April 28, 2015 | Grain Hedge Insights | Cody Bills | Views: 207

Soybeans Pop in the Overnight

In the overnight session the soybean market popped higher touching on the 50 day moving average which has acted as resistance in the recent weeks.

In the overnight session the grains were mixed with corn up 1 1/2 cents, soybeans up 9 1/4 cents and wheat down 2 1/4 cents. First notice day for May grain contracts is Thursday the 30th. Be sure to either liquidate or roll those may contracts by the close of trade on Wednesday.


July Chicago wheat fell through $4.85 support yesterday and continued lower after breaching the level. Precipitation on Monday helped provide moisture to Western Oklahoma, parts of the Panhandle and southwest Kansas. Dry spots have now been limited to 10 percent of the winter wheat area with more precipitation expected in the 6-15 day forecast. Winter wheat conditions were unchanged this week with 42 percent of the crop rated good to excellent.


Crop conditions showed that 19 percent of corn has been planted which is behind the analyst expectations of 23-25 percent and lagging the four year average of 25 percent planted. Soybean progress was reported at 2 percent complete behind the four year average of 4 percent during this time period.


Yesterday, Iowa’s state agriculture department said that they have found “probable new cases” of the bird flu in an estimated 2.3 million birds. There were four probable cases throughout Iowa in Sioux County, Osceola County and two incidents in O’Brien County. 

April 27, 2015 | Grain Hedge Insights | Cody Bills | Views: 151
April 27, 2015 | Grain Hedge Insights | Cody Bills | Views: 130

Grains Pressured on Monday Morning

The grains are pressured by precipitation in the southern plains, a stronger dollar and the easing of the trucker strike in Brazil.

In the overnight session the grains traded lower with corn down 2 1/4 cents, soybeans up 1/2 a cent and wheat down 2 cents going into the morning pause in trade. Crude oil is down 28 cents and the U.S. dollar is trading a fraction of a percent higher. Exporters reported 158,000 metric tons of old crop soybeans sold to unknown destinations. Taiwan issued a tender to purchase 65,000 metric tons of corn to be sourced from U.S, Brazil, Argentina or South Africa this morning.


Concerns that the Brazil trucker strike would escalate eased on Monday as the number of strike locations were on the decline. On Thursday evening there were 17 reported strike instances which compare to over 100 instances during the peak of the logistics crises. By Friday the number of strike related blockages on highways had fallen to 11.


More precipitation is expected today in the southern plains providing some relief to parts of Texas and Oklahoma, with chances of more precipitation in the 6-15 day forecast. The past two weeks provided between .5-5 inches of precipitation to the winter wheat fields of the plains, with over half of the region receiving 2 or more inches of rain. The moisture helped avoid serious crop loss, but continued precipitation is necessary to improve the overall condition of the crop. Without moisture in the coming weeks, the trade will begin to focus on the low subsoil moisture levels as a risk factor for the plains wheat.  


Crop conditions and planting progress will be released out today with expectations of corn planting to jump from 9 percent complete to nearly 23-25 percent complete. This will be the first week of soybean planting progress and expectations are for around 3-4 percent completed nationwide. 

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