April 14, 2015 | Grain Hedge Insights | Cody Bills | Views: 127

Wheat Continues to Slide on Improved Weather

The wheat market continues to slide lower after weather has turned favorable for the drought stricken plains region.

In the overnight session the grains were mixed with corn up a penny, soybeans up 7 cents and wheat in Chicago down 2 1/4 cents. The June U.S dollar index is trading down slightly after trading over 100 during yesterday’s session. Crude oil is trading up 3/4 of a percent.  In the overnight there were a couple tenders including a tender from the Japanese Ministry of Agriculture looking for 109,005 metric tons of food quality wheat from the United States, Canada or Australia and an Iraqi tender for 50,000 metric tons of wheat.

 

Yesterday the Crop progress report was released showing winter wheat conditions slipped to 42 percent rated good to excellent, down 2 percentage points from last week but still well over last year’s 34 percent good to excellent rating. However, prices continue to fall for the second straight day after the plains received much needed precipitation over the weekend. This week’s forecast shows continued precipitation in the southern half of the U.S and has eased the fears of significant crop damage as a result of dryness.

 

Yesterday wheat export inspections came out on the high side of expectations with 445,674 metric tons inspected for export compared to expectations of between 325,000-450,000 metric tons. Soybeans and corn both reported export inspections that fell within expectations with 450,317 metric tons and 855,766 metric tons inspected respectively.  

 

As a reminder, tomorrow the March NOPA crush values will be released. Analysts are expecting 155.261 million bushels of soybeans to have been crushed for the month of March, the largest on record since last year’s record of 153.840 million bushels.

April 13, 2015 | Cody Bills | Views: 326
April 13, 2015 | Grain Hedge Insights | Cody Bills | Views: 204

Wheat Drops After Weekend Precipitation

Rains fell over the weekend providing timely rains to a stressed winter wheat crop

In the overnight session corn traded down 2 cents, soybeans traded up 1 1/4 cent and wheat traded down 14 3/4 cents this morning on timely rains over the weekend that lowered concerns of serious crop damage from the dry conditions developing across the panhandle, western Oklahoma and western Kansas. Between .5-1.5 inches of rain fell in the Texas panhandle and western third of Kansas over the weekend and between .25-.75 inches of rain was seen across most of Iowa, southern Minnesota and northern part of Missouri.

 

Crop progress will be released at 3 PM CST later today and will provide an update on the winter wheat conditions as well as planting progress for corn. Last week the USDA reported that there was 44 percent of winter wheat in good to excellent condition, up from last year’s level of 35 percent good to excellent.

 

On Wednesday April 15th the March NOPA crush numbers will be released. Analysts are expecting 155.261 million bushels of soybeans to have been crushed for the month of March, the largest on record since last year’s record of 153.840 million bushels. Analysts are also expecting soyoil stocks to come in at 1.383 billion pounds, up from 1.322 billion pounds last month. 

April 10, 2015 | Grain Hedge Insights | Cody Bills | Views: 130

Weekly Wrap Up

Cody speculates what next weeks NOPA Crush report will look like and discusses weekly basis changes.

April 10, 2015 | Grain Hedge Insights | Cody Bills | Views: 121

Weekly Cash Comments

Cash Commentary for week ending April 10

Grain basis levels were only modestly stronger this week across the country with US average corn and soybean basis up about a half a cent from last week.

 

In corn, strength in the Gulf export market helped push bids higher along river terminals. Average bids were up 2 cents a bushel this week at key river markets, although the Gulf was up nearly 6 cents a bushel. Barge rates were also higher this week with the biggest jump occurring along the IL River where barge costs increased 6 cents a bushel on the week. In ethanol, weekly production was lower this week falling 16,000 barrels per day and ethanol plants as a group were mostly unchanged on basis.  Some Western Cornbelt plants in NE/IA/MN were up 3 to 5 cents, but most other plants saw little movement.

 

For soybeans, it was a week that saw mixed results across end user groups. River terminals were lower by 2 cents a bushel thanks to a 1 cent decline at the Gulf and rising barge freight. However, soybean crushing plants were up 2.5 cents on average. Eastern Seaboard plants and plants in Ohio saw some gains of 5 cents or better. As field work and planting starts to pick up pace we should start to see a bit more strength in spot grain basis as pipeline supplies begin to dwindle and farmer movement slows.

April 10, 2015 | Grain Hedge Insights | Cody Bills | Views: 120

Can Grains Rebound on Friday?

Grains hold steady in the overnight session after the market experienced some selling in the wake of the April WASDE report released out yesterday at 11 AM CST.

The grains were steady and mostly unchanged in the overnight with corn up 1/4 cent, soybeans up 1/2 a cent and wheat down 3/4 of a penny. The dollar is trading higher and crude oil is mostly unchanged this morning. Yesterday the April USDA supply and demand report was released which seemed to affect soybeans primarily.

 

Soybean ending stocks were revised lower by 15 million bushels to 370 MBU which was in line with analyst expectations. The decrease in ending stocks was a result of a 5 MBU increase in imports that was more than offset by a 6 MBU increase in seed use and a 14 MBU increase in residual use.  Global ending stocks stayed mostly steady with world carryout at 89.55 million metric tons up only .02 from March’s report. Argentina production increased 1 MMT to 57 MMT while Brazil’s production was unchanged.

 

Wheat ending stocks were reduced by 7 million bushels to 684 MBU which was below analyst expectations of around 692 MBU. Wheat saw exports revised lower by 20 million bushels which was offset by a reduction in imports of 15 million bushels, an increase in seed use by 2 MBU and a 10 MBU increase in feed and residual.

 

Corn ending stocks were increased by 50 million bushels to 1,827 MBU which was below the average analyst guess of 1,854 MBU. This was a result of the decrease in feed and residual use which was revealed in the March 31st quarterly grain stocks report. However, despite the better than expected domestic stocks, global carryout was lifted 3 MBU to 188.46 million metric tons primarily from increased production out of major corn importers.  

 

This morning Brazil’s Conab increased its forecast for the 14/15 soybean crop to 94.28 million metric tons from 93.26 in March. The corn forecast was also increased to 78.99 million metric tons compared to 78.21 million metric tons a month earlier. 

April 09, 2015 | Grain Hedge Insights | Cody Bills | Views: 179
April 09, 2015 | Grain Hedge Insights | Cody Bills | Views: 111

Soybean Export Sales Disappoint

Soybean export sales saw larger than expected net cancellations this week as china switches some old crop sales to new crop.

In the overnight session the grains traded lower with corn down 1 1/2 cents, soybeans down 5 1/2 cents and wheat down 4 cents going into this morning’s pause in trade. Keep a close watch on the WASDE report which will be released at 11 CST.

 

Export sales were released this morning which showed corn and wheat beat analyst expectations for old crop sales. Corn booked 639,000 metric tons, up 57 percent week over week and well over expectations of which ranged between 350,000-450,000 metric tons. Wheat booked 319,900 metric tons up 97 percent compared to last week’s sales and also well above the expectations of between 50,000-150,000 metric tons. Soybeans underperformed this week with cancellations reported of 176,700 metric tons which was disappointing to traders that expected sales between -50,000-150,000. China switched 355,000 metric tons from old crop to new crop delivery causing the majority of the “net cancellations” recorded this week. Soybeans recorded new crop sales of 502,400 metric tons this week with China making up over 80 percent of it. Traders have been looking for cancellations in the soybean market for the last month as South American exports have been ramping up.

 

Here’s what to watch for in the WASDE report scheduled for release this morning. According to a Reuters poll of 20 analysts, the average guess for wheat ending stocks is 692 million bushels, up one million bushels from the March report. Corn ending stocks are expected to be reported at 1.854 billion bushels up from 1.777 billion bushels reported in the March WASDE report. This would reflect the higher than expected quarterly stocks number reported on March 31st. Quarterly grain stocks showed 7.745 billion bushels on hand compared to 7.609 billion expected by the market which suggests either lower than expected feed usage or larger than previously stated 14/15 production.  Soybean ending stocks are expected to come in around 370 million bushels which would be a decline of 15 million bushels from the March report. Quarterly grain stocks showed fewer soybeans as of March 1st, with 1.334 billion bushels compared to expectations of 1.346 billion bushels.  

April 08, 2015 | Grain Hedge Insights | Cody Bills | Views: 203
April 08, 2015 | Grain Hedge Insights | Cody Bills | Views: 124

What You Need to Know for Thursday’s WASDE Report

Analysts are expecting some adjustments in ending stocks in this month’s WASDE report following the quarterly grain stocks report released late last month.

In the overnight session the grains traded slightly higher with corn up 1/2 a cent, wheat up 1 3/4 of a cent and wheat up 1/2 a penny. The market will be receiving the EIA ethanol production numbers today and the monthly WASDE report will be released on April 9th at 11 AM CST.

 

The average analyst expectations for the WASDE report according to a Reuters poll of 20 analysts is as follows. The average guess among the analysts polled for wheat ending stocks is 692 million bushels, up one million bushels from the March report. Corn ending stocks are expected to be reported at 1.854 billion bushels up from 1.777 billion bushels reported in the March WASDE report. Soybean ending stocks are expected to come in around 370 million bushels which would be a decline of 15 million bushels from the March report.

 

Traders will also be following South American production which is wrapping up harvest in many areas. Argentina corn production is expected to be revised slightly higher than in March to 23.90 million metric tons from 23.50. Argentina soybean production is also expected to increase to 57.23 million metric tons from 56 last month. Brazil production is expected to be revised slightly lower than March with corn production expected to decline to 74.82 million metric tons from 75.00 in March. Soybean production is also expected to decline to 94.18 million metric tons from 94.5 in March.

 

Across the Midwest rains will be keeping producers out of the fields through the end of the week. Precipitation will be focused on the northwestern part of the Midwest early on and shift to the central and southeastern part by weeks end. Rains will continue to halt planting along the Mississippi river delta. 

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