January 09, 2015 | Cody Bills | Views: 314

Report Expectations For Monday

Tune into GrainTV to listen to Cody and Kevin break down the analyst expectations for this report. Kevin discusses the cash market changes this week. Don't miss this episode.

January 09, 2015 | Grain Hedge Insights | Cody Bills | Views: 459

Weekly Cash Comments

Corn basis was unchanged for the week on average across the US while soybean basis improved a modest one-cent a bushel.

Corn basis was unchanged for the week on average across the US while soybean basis improved a modest one-cent a bushel.

 

Ethanol production fell for the 2nd straight week as a normal seasonal decline starts to take hold. Although ethanol fuel prices have come down sharply in response to lower gasoline prices, DDG prices have moved higher helping to keep ethanol margins propped up. Year-to-date production is still running 4.8% ahead of the same period last year, although USDA is only factoring in a 0.3% increase in corn use for ethanol on the year. Ethanol plants as a group were up nearly 2 cents a bushel on spot corn basis this week, although must of the  strength was confined to the Western Cornbelt where basis levels were up a dime at some key plants in IA & NE.  At the Gulf, basis levels were off 2 cents a bushel but had little impact on upstream river terminals as basis levels were unchanged on average across river markets.

 

For soybeans, basis levels improved 1–cent a bushel across the US but river terminals saw a better improvement thanks to an 8-cent gain at the Gulf this week. Although soybean export business was expected to slow in the start of the New Year, weekly sales of 910,000 were better than the 500,000 to 700,000 MT expectations going into the Thursday announcement by USDA. For soybean crushing plants, basis levels were unchanged on average for the week.

January 09, 2015 | Grain Hedge Insights | Cody Bills | Views: 353

Expectations for Reports on Monday

With the market eyeing the report on Monday here are the expectations for crop production and ending stocks.

In the overnight session the grains are mostly mixed with corn up 2 ¾ cents, soybeans trading 1 ¾ cents lower and wheat down by ½ a penny.   Trade will be heavily focused on the reports scheduled for release at 11 AM CST on Monday. Below are expectations for Mondays report.

For the crop production report the average analyst expectation is for corn output to be lowered by 58 million bushels. The average analyst guesses yield will be revised .1 bushel per acre lower and a 332,000 acre decrease in planted acres. The large gap between FSA and NASS acreage numbers is expected to narrow in this report.

Soybean production for 2014 is also expected to see a slight decline by only 2 million bushels. Yield is expected to increase by .1 bushels per acre, but acres are anticipated to drop by 359,000. Neither corn nor soybeans are expecting a sizeable revision in the production side of the balance sheet. 

 

Average Analyst Crop Production Expectations

                                            Production (billion bushels)           Yield (BPA)         Harvested Acres

Corn                                      14.349                                          173.3               82.765

December                               14.407                                          173.4               83.097

 

Soybean                                   3.956                                            47.6              83.044

December                                 3.958                                           47.5               83.403

 

In the January WASDE report analysts are expecting ending stocks to rise for wheat by 12 million bushels to 666 million bushels carryout. Corn and soybean ending stocks are both expected to decline in this month’s report. The average analyst guess has corn expected to decline by 71 million bushels to a 1.927 billion bushels carryout and soybeans to shrink 17 million bushel to 393 million bushels as a result of strong export sales which have booked 90% of the current USDA expectation already with 34 weeks left in the marketing year. 

 

Average Analyst Guess: Ending Stocks

                                          Avg. Ending Stocks Guess              December

Wheat                                           .666                                  .654

Corn                                            1.927                                1.998

Soybeans                                       .393                                  .410

      *In Billion Bushels

 

For a full report on January 12th expectations take a Grain Hedge 14 day free trial by clicking here. 

January 08, 2015 | Grain Hedge Insights | Cody Bills | Views: 371

Very Strong Soybean Export Sales

Soybean sales continue to surprise analysts with weekly strength.

In the overnight session corn slid ¼ cent, soybeans increased 4 ¼ cents and wheat fell 3 ¼ cents. This morning another reportable sale including 118,000 metric tons of soybeans was announced for delivery to China in 14/15 marketing year.

 

Export sales disappointed this morning for corn and wheat with both grains weekly sales falling 57% from the previous week. Corn booked only 387,000 metric tons, well below expectations of between 600,000 and 800,000 metric tons. Corn has booked 62% of this marketing years expected sales which is ahead of the seasonal pace needed to meet the USDA’s forecast. Wheat sales came in at 151,000 which is a marketing year low and will likely affect prices negatively in this morning’s trade action.  Soybeans beat analyst expectations which ranged between 500,000-700,000 metric tons by booking 910,000. Soybean sales were up 49% from last week and are well ahead of pace to meet USDA expectations. With 34 more weeks left of this marketing year soybeans have already booked 90% of USDA forecasted export sales leaving the door open for the USDA to revise expectations higher again in the January WASDE report.

 

Ethanol production fell 23,000 barrels per day in an EIA report on Wednesday bringing total ethanol production for the week to 949,000 barrels per day. Ethanol stocks rose to 18.85 million bushels, which is the largest ethanol stocks we’ve seen since March of 2013. Despite the decline over the past two weeks, this marketing year’s ethanol production is up 4.9% compared to 2013-14 compared to a .3% increase projected by the USDA. 

January 07, 2015 | Cody Bills | Views: 357

Will The USDA Raise Production Numbers in January?

Tune into GrainTV to hear Kevin discuss the ethanol production report released early this afternoon and help shine light on the question "will the USDA revise their crop production numbers higher on Monday?"

January 07, 2015 | Grain Hedge Insights | Cody Bills | Views: 274

Grains Mixed as Traders Eye Monday’s Report

The markets were mixed in the overnight as traders eye the three large reports scheduled for release on Monday.

In the overnight session corn fell 1 ¼ cents, soybeans climbed 2 cents and wheat fell ½ a penny. Wheat seemed to be unaffected in the overnight by the frigid temperatures that are currently moving through the grain belt. Illinois, Southern Michigan and Indiana will be the most vulnerable to winterkill with lows expected to fall to between-5 and -15 degrees this evening. In South America there has been dryness in the central Cordoba region which is expected to remain dry for the next couple weeks when showers are indicated in the forecast.  

 

Yesterday, Informa economics released their January crop estimates at 10:30 AM CST. They lowered their soybean yield by .3 BPA to 47.6 on par with the USDA’s estimate of 47.5 BPA. Informa also lowered their production 22 million bushels to 3.969 billion bushels which compares to the December WASDE report showing 3.958 billion bushels. Corn yield was cut by 1.7 bushels per acre to 172.7 BPA, dragging down their production estimates by 68 million bushels. Informa’s production estimates are 18 million bushels higher than the December WASDE forecast. All together the market reaction to these numbers was minimal at the release.

 

March Soybeans now trading at 10.57 ¾ which is close to the high side of the range it has been trading in since late October. If the market moves higher this morning there should be strong resistance between 10.66 and 10.68 which were both previous highs on December 10th and 29th. 

January 06, 2015 | Cody Bills | Views: 411

Market Mixed On Informa Numbers

Tune into GrainTV to hear Cody and Kevin discuss why soybeans was able to move higher today and what the Informa numbers mean to your marketing plan. ​

January 06, 2015 | Grain Hedge Insights | Cody Bills | Views: 310

Grains Follow Through In Overnight

The grains continued their rise in the overnight session as more export sales of wheat and soybeans were announced.

Grains Follow Through In Overnight

In the overnight session the grains traded higher again with corn up 2 cents, soybeans up 7 cents and wheat trading up 7 1/2 cents this morning. Yesterday there was talk that China purchased 233,000 metric tons of wheat which was seen as a positive sign for the grain. The origin of the grain is unclear but traders suspect Australia and U.S. wheat are the most likely. China is the world’s largest producer and consumer of wheat, but currently faces a need for high-protein wheat. Japan also purchased 122,770 metric tons of food-quality wheat from the United States in a tender closing on Thursday.  

 

Yesterday’s rally brought soybeans off of the low side of the range it has been trading in since late October. The rally was primarily driven by short covering after four straight days of selling. It was further fueled by an export sale to China for 233,000 metric tons of soybeans and concerns of dryness in Brazil’s north eastern growing area. Recently, weather models have turned drier over the next 15 days causing traders to monitor this region more closely. This morning another reportable export sale of 243,000 metric tons delivered to China was announced.

 

Export inspections were released yesterday showing wheat and soybeans met analyst expectations with 352,829 metric tons and 1,406,496 metric tons respectively. Corn inspections came in below the estimates reporting only 538,945 metric tons inspected for export. Analyst guesses ranged from 675,000-800,000 metric tons for corn.

 

Informa Economics will release its January crop estimate at 10:30 AM CST this morning. 

January 05, 2015 | Grain Hedge Insights | Cody Bills | Views: 225

Strong Grain Prices

Higher markets today. Tune into hear Cody and Kevin discuss what is driving the markets higher.

January 05, 2015 | Grain Hedge Insights | Cody Bills | Views: 295

Grains Bounce after Four Days of Selling Pressure

The grains bounced in the overnight as traders see the possibility of increased demand after prices fell for four days in a row.

In the overnight session the grains are higher with corn up 6 ½ cents, soybeans up 11 ¾ cents and wheat up 10 ½ cents as we have moved past the holiday trade schedule into a more normal environment. The bounce this morning in the overnight comes after four straight days of selling pressure going through the New Year. Traders will be focusing and positioning themselves for the Grain Stocks report, the USDA Supply and Demand report and the Crop Production report which will be released at 11 AM CST on the 12th.

 

Another cold front is expected to push into the Midwest Wednesday night bringing low temperatures between -5 and -15 degrees Fahrenheit in the northern Midwest. Some snow is expected, but the 1-5 inches in the forecast will not be enough to adequately protect the wheat. Nearly 1/3 of the belt will be at risk of winterkill damage.

 

There have been fresh inquiries by China into buying U.S. DDG’s following purchases last month. In each of the last two years China has purchased over 4 million metric tons of DDG’s from the U.S. However, in late 2013 and early 2014 nearly one million metric tons of DDG’s were rejected by customs because of trace amounts of the unapproved GMO strain MIR-162.  China has since approved the strain but many traders are still expecting a much larger down payment for DDG’s to be purchased and shipped to China. 

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