July 10, 2015 | Grain Hedge Insights | Cody Bills | Views: 246

Weekly Cash Comments

Cash Commentary for week ending July 10th

Grain basis was mostly stable this week as farmer selling was limited following the sell-off in futures after the June 30th USDA report. On average across the US, both corn and soybean basis was mostly unchanged.

 

In corn, flooding in Missouri and southern Illinois continues to take its toll on crop production as well as hamper barge movements along the Mississippi River. Water levels are expected to crest in the next week and could continue to plague barge movements. In Missouri and Southern IL basis levels were stronger than the rest of the country showing 2 to 4 cents a bushel. In ethanol, plants were mostly unchanged this week although Western Cornbelt plants were generally weaker than plants in the Eastern Cornbelt.

 

For soybeans, there was noticeable strength by soy crushing plants this week with the average basis across plants rising by 4 cents a bushel this week. Plants in the Eastern Cornbelt showed the most strength with several key facilities up 10 cents a bushel this week. On the river, basis was also firmer by 2 cents a bushel.

July 10, 2015 | Grain Hedge Insights | Cody Bills | Views: 281

WASDE Expectations

The market is trading higher this morning with anticipation for the July WASDE report. See the expectations below.

In the overnight session the grains continued higher with corn up 3 cents, soybeans up 8 1/4 cents and wheat trading 6 1/2 cents higher. The U.S. dollar is trading 1 percent lower and crude oil is up 48 cents this morning. Keep in mind that the July Supply and Demand report will be released at 11 CST today.

 

In a poll conducted by Reuters the average analyst guess was for old crop corn and soybean ending stocks to be lowered substantially which would reflect the lower than expected quarterly grain stocks figure released on June 30th. Analysts are also expecting 15/16 corn and soybean production to be lowered due to the excessive rains over the last few months.

 

Analysts are expecting old crop corn ending stocks to be revised lower by 65 million bushels to 1.811 MBU reflecting the smaller than expected quarterly grain stocks reported in the June 30th quarterly grain stocks report. Soybean ending stocks are also expected to decline to 287 million bushels from 330 million bushels in the last WASDE report.

 

New crop ending stocks for corn and soybeans are also expected to be revised lower as a result of the heavy rains which has prevented planting throughout Missouri and drowned and damaged crops throughout the eastern grain belt. Analysts are expecting 15/16 corn ending stocks to be 1.54 billion bushels, down from 1.771 billion bushels in the last WASDE report. The average trade guess for soybean ending stocks is 370 million bushels from 475 million bushels in June.  Analysts expect yield to be lowered by about a bushel per acre for soybeans and 1.4 bushel per acre for corn.  

 

Next week should bring highs in the 80’s and low 90’s early in the week and provide more precipitation for the northwestern states, a positive for crop growth and yield potential in that region. Rains are expected to be above average throughout the eastern grain belt including Indiana and Ohio which are already saturated.  

July 09, 2015 | Grain Hedge Insights | Cody Bills | Views: 244
July 09, 2015 | Grain Hedge Insights | Cody Bills | Views: 172

Markets Move Higher

The grain markets move higher this morning as traders prepare for the WASDE report scheduled out on Friday and as China equity markets stabilize.

In the overnight session the grains traded higher with corn up 2 3/4 cents, soybeans up 14 1/4 cents and wheat up 6 1/4 cents. The U.S dollar is up a fraction of a percent and crude oil is up $1.50. Traders will be positioning themselves for the July WASDE report which will be released out on Friday, July 10th.

 

Informa cut its soybean production forecast by 41 million bushels to 3.77 billion bushels in its latest forecast citing lost acreage in Missouri and crop damage from the recent heavy rains.

Growing conditions have been ideal for the second crop in South America. Brazil’s government crop agency Conab raised its corn production forecast to 81.81 million metric tons, up from 80.21 million metric tons last month. Conab is also raising its soybean and wheat forecast to 96.22 million metric tons and 7.01 million metric tons respectively.

 

In this morning’s export sales report corn, soybeans and wheat all met analyst expectations for old crop sales. Wheat booked 345,900 metric tons which was a 5 percent decline from last week, but fell within expectations which ranged between 300-500 metric tons. Old crop corn sales were reported at 535,200 metric tons, down 10 percent from the previous week. Soybeans booked positive export sales of 41,000 metric tons, which was a big improvement from the cancellations reported last week. New crop sales were mixed, with corn reporting below expectations at 149,000 metric tons and soybeans meeting expectations at 201,000 metric tons.

 

Ethanol production jumped 19,000 barrels per day this week to a total of 987,000 barrels per day. This is a significant improvement over last week and nearly 60,000 barrels per day higher than last year’s pace. Ethanol stocks increased 309,000 barrels this week to a total of 19,840,000 barrels.

 

The Ukrainian Ag Minister announced today that grain output may be adjusted lower from their previous forecast of 60 million metric tons of grain this year. Temperatures above the high 80’s Fahrenheit have stressed late developing crops and heavy precipitation in the southern and central regions have caused serious quality issues in the wheat. 

July 08, 2015 | Grain Hedge Insights | Cody Bills | Views: 235

Bullish News from the Grains

Worldwide news proved mostly bullish for the markets. Cody reviews ethanol production, export sales, and yield estimations.

July 08, 2015 | Grain Hedge Insights | Cody Bills | Views: 174

Grains Mostly Steady

The grains were mostly steady to slightly lower this morning as China's Shanghai Index sells off sharply on Wednesday.

In the overnight session the grains traded marginally lower with corn down 1 cent, wheat down 5 1/2 cents and soybeans down 1 1/4 cents. The U.S. dollar is trading down 1/3rd of a percent and crude oil has fallen 21 cents. A reportable sale of 240,000 metric tons of new crop soybeans was announced this morning.

 

On Wednesday, the Chinese market fell 5.9 percent causing the exchange to halt trading in 1,331 companies. Since the height of the market the Shanghai Composite Index has now fallen 32 percent. This major selloff in the Chinese equity markets will affect commodities as investors shore up capital to meet margin requirements, hedge equity losses and/or redeploy capital in the wake of sharp selloff.  

 

Last night brought between .5-1 inch of precipitation between Oklahoma, north central Texas, Kansas City and Western Indiana. For Missouri, a state that has planted only 73 percent of soybeans as of July 5th, more rain is expected in the forecast throughout today and Thursday. Weather should begin to clear in Missouri next week with most of the precipitation focused on the eastern grain belt covering Indiana and Ohio. Temperatures throughout the majority of the Midwest will remain cooler than normal.  

 

Cargill offered U.S. wheat for $260 per metric ton in the latest GASC tender. This was significantly higher than Ukrainian wheat offered at $202 per metric ton and Russian wheat offered at $202 per ton. The strong dollar, along with the sharp grain rally over the last three weeks has hurt U.S. competitiveness on the global market.       

July 07, 2015 | Grain Hedge Insights | Cody Bills | Views: 249
July 07, 2015 | Grain Hedge Insights | Cody Bills | Views: 287

Grains Lower on Better than Expected Crop Conditions

Grains trading lower in the overnight session.

In the overnight session the grains are trading lower with corn down 6 3/4 cents, soybeans down 5 1/4 cents and wheat down 9 1/4 cents. The US dollar is trading nearly 1 percent higher and crude oil is up 8 cents.

 

Analysts were expecting corn good-to-excellent ratings to decline by 1 percent and for soybean ratings to decline by 2 percent early yesterday. However, the crop progress report showed that corn conditions are slightly better than expected at 69 percent good-to-excellent which was a one percent improvement from the previous week. Soybean conditions held steady at 63 percent good-to-excellent which was unchanged on the week.

 

Soybean plantings increased 2 percent to 96 percent planted this week after rains disrupted any real opportunity to plant in Missouri last week. Missouri is now 73 percent planted. Winter wheat conditions showed a 1 percent increase this week but spring wheat conditions fell 2 percent this week.

 

Yesterday the export inspections report showed soybeans recorded 197,441 metric tons inspected which was within the analyst expectations which ranged from 125,000 to 275,000 metric tons. Corn inspections was reported at 839,324 metric tons which missed analyst expectations and wheat recorded 368,818 metric tons inspected for export this week which was within the range of expectations.  

 

Weather doesn’t look to favorable for the later parts of this week. Rain is expected in the forecast for the eastern, central and southwestern areas over the next few days which will continue to add stress to already saturated fields. 

July 06, 2015 | | Views: 475
July 06, 2015 | Cody Bills | Views: 210

Grains Sink on Greece Vote and Rain Reprieve

Grain markets came back from the holiday weekend in a selling mood with soybeans off 20 cents, wheat off 15 cents and corn down 10 cents.

Global markets were generally sour overnight following the election results in Greece where voters there shunned the EU & IMF bailout deal. Greek banks are said to be running out of cash and facing the danger of collapse within days without new aid. Amidst this uncertainty, equity markets in the US were sharply lower overnight as was oil while the dollar was up on a flight to stability.

Over the weekend, weather was more benign than expected going into the weekend as rain accumulations in flooded areas were limited.  However, over the next two days storms are expected to bring more rain to Missouri and the Southern parts of IL/IN/OH where flooding has been most problematic. After the close of trading today, USDA will announce the latest crop condition scores and traders expect another drop in crop conditions.

 

Internationally, France found a bit of relief from the dry heat wave over the weekend with cooler temps and some modest precipitation. However, Western Europe is still expected to be dry for the next 10 days despite the break in heat. On the Canadian prairies, they too found some relief over the weekend from scorching temperatures but there is little change in the outlook which points to a continuation of the heat wave and dry conditions that have plagued the region in the past month. 

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