June 05, 2015 | Grain Hedge Insights | Cody Bills | Views: 264

US Dollar Higher in the Overnight

The U.S. dollar traded higher in the overnight by over a percent this morning which will likely put pressure on the grains after a week of rising prices.

In the overnight session the grains were mixed with corn up 1/4 of a cent, soybeans down 1/2 of a cent and wheat is down 2 3/4 cents. The U.S dollar is trading nearly 1 percent higher this morning after printing lows of 94.67 in yesterday’s session and rallying back to 95.55 percent to close positive on the day. The U.S dollar is trading very close to its 100 day moving average at 96.468.

 

The wheat market has traded sharply higher this week. After opening at $4.78 on Monday, July Chicago Wheat is now trading at $5.21 with the possibility of trading over resistance near 5.30 1/4 which is set from the previous high back on May 18th. Concerns about hot dry weather in India, the impact of the heavy rains in Oklahoma and Texas last week and dry conditions throughout Europe and parts of Russia has triggered some short covering, despite ample global ending stocks. Even with the rally in futures this week, wheat still remains firmly in its downtrend.

 

On Wednesday the 10th the USDA will release its June USDA Supply and Demand report. According to a poll of Reuters analysts old crop wheat ending stocks are expected at 712 million bushels a slight increase from last month. Old crop corn ending stocks are expected to show 1.859 billion bushels up eight million bushels from the May report and soybean ending stocks are expected at 339 million bushels down from 350 million last month. Soybean export sales continue to run hot in the second half of the marketing year when sales usually taper to nearly nothing as buyers switch over to South America.  ​

June 04, 2015 | Grain Hedge Insights | Cody Bills | Views: 279
June 04, 2015 | Grain Hedge Insights | Cody Bills | Views: 179

Soybean Sales Mixed

Export sales were mixed this morning with new crop soybean showing the best performance this week.

In the overnight session corn traded lower by 1 1/2 cents, soybeans pushed 2 1/2 cents higher and wheat in Chicago fell by 2 1/4 cents. The U.S dollar is continuing lower today after two days of selling and crude oil is down 39 cents.

 

This week’s export sales did little to impress with old crop corn and soybeans below expectations and wheat recording cancellations of 20,400 metric tons. New crop sales were mixed with corn showing export cancellations of 54,800 metric tons, soybeans beating analyst expectations by booking 347,000 metric tons and wheat recording sales of 364,000 metric tons which was within analyst expectations. 

 

Yesterday Informa trimmed their Winter Wheat forecast to 1.481 billion bushels from 1.486 billion bushels in their previous forecast. Despite cutting wheat production, Informa raised corn and soybean production in Brazil and Argentina. In Brazil and Argentina soybean production was revised 1 million metric tons higher to 95.5 MMT and 60 MMT respectively. Argentina corn was also increased by 1 million metric tons to 60 MMT. This is another example of the South American crop putting more pressure on U.S. prices as good growing conditions keep analysts revising production higher.  

 

Ethanol production increased this week by 3,000 barrels per day to 972,000 bpd. This is the third straight week of firm production registering well over last year’s production levels and the four year average. Ethanol stocks declined again this week, falling 29,000 barrels to 20.07 million barrels. Cumulative yearly production is running 4.8 percent ahead of last year’s levels.

June 03, 2015 | Grain Hedge Insights | Cody Bills | Views: 223
June 03, 2015 | Grain Hedge Insights | Cody Bills | Views: 173

Could India Grain Production Lift the Markets?

The markets rallied sharply yesterday on the back of a dollar sell-off and concerns about India grain production.

In the overnight session the grains are trading slightly lower with corn down 3/4 of a cent, soybeans down 4 1/4 cents and wheat down 1 1/4 cents going into this morning’s pause in trade. Crude oil is down $1.04 this morning and the U.S. dollar has rallied back nearly 1/2 a percent from the sell-off yesterday. ADP numbers, which are generally used as a leading indicator for non-farm payrolls, were released this morning showing payrolls grew to 200,000 jobs in May, up from 169,000 jobs reported in April. ADP payrolls were better than expected and provided strength to the U.S. dollar this morning.

 

Yesterday, the rally was mostly fueled by a sharply weaker dollar primarily due to the anticipation of the ADP report and an improved tone toward the Greek debt situation. However, concerns about the intensity of the Indian Monsoon season played a role in the grain rally yesterday as well. Yesterday, India cut its forecast of this year’s monsoon to 88 percent of the long term average. If this comes to pass, this will have a huge impact on India’s grain production. Typically, a monsoon that is 90 percent of normal is considered a drought year.

 

According to the most recent WASDE report, India is forecast to produce 90 million metric tons of wheat. However, other organizations such as the India Pulses and Grains Association have forecast output to fall to 80 million metric tons. It has been wet in India throughout March and April but recent dryness and exceptional heat has sapped the moisture from the soil making it all the more important for the June-September rains to return.  

June 02, 2015 | Grain Hedge Insights | Cody Bills | Views: 252
June 02, 2015 | Grain Hedge Insights | Cody Bills | Views: 186

Winter Wheat conditions decline in Texas and Colorado

Winter Wheat rated good to excellent fell by 1 percent throughout the U.S. in the latest crop progress report issued out on Monday.

In the overnight session the grains traded higher with corn up 2 1/4 cents, soybeans up 8 1/2 cents and wheat up 4 1/2 cents going into this morning’s pause in trade. The U.S. dollar index has fallen nearly 3/4 of a percent and crude oil is 55 cents higher this morning.

 

Yesterday, crop progress showed that all planting for corn is nearly complete with 95 percent done as of May 31st. This is on par with the average of 94 percent complete during this time of the year and up from 92 percent complete last week.  The condition of the corn crop remained unchanged from last week.

 

Soybean planting pace jumped up 10 percentage points this week to 71 percent complete which is on par with the four year average of 70 percent during this time period. Weather looks to provide additional planting opportunities through Thursday throughout the eastern grain belt. Precipitation in the northern plains is expected through Wednesday. Next week’s weather outlook favors drier weather throughout the majority of the U.S., but will bring significant rain the east coast.

 

Winter wheat good-to-excellent ratings fell by 1 percentage point across for the entire crop but some states were affected more by the rain than others. Texas in particular saw its wheat rated good to excellent slide to 5 percentage points to 51 percent. Kansas and Oklahoma remained unchanged on the week but Colorado fell 4 percentage points to 49 percent good to excellent. 

June 01, 2015 | Grain Hedge Insights | Cody Bills | Views: 210

Bearish Wheat Trend is Sustained

Cody talks about pricing strategies for these spikes in wheat prices. Export inspections, weather, and crop progress are also covered.

June 01, 2015 | Grain Hedge Insights | Cody Bills | Views: 217

Grains Quiet on Monday

The grains are mostly unchanged with the exception of soybeans on Monday morning.

In the overnight session the grains were mixed with corn lower, soybeans down 3 3/4 cents and wheat up 1 1/4 cents. The U.S. dollar is trading slightly higher with crude oil down 28 cents this morning. On Friday, the grain crushers strike in Rosario Argentina was resolved which should have a positive effect on exports out of Argentina.

 

Sunday provided precipitation that ranged from 1/4 of an inch to an inch of precipitation throughout eastern North Dakota, South Dakota and eastern Nebraska. In the southern Plains most of the precipitation fell in eastern Colorado with spotty showers spread throughout the western parts of Kansas, Oklahoma and the panhandle of Texas. This week’s weather outlook turns dryer for the southern Plains which is a break from the above average precipitation received throughout May.  According to the Speedwell US Winter Wheat Index, the southern plains have received precipitation that runs 350 percent above normal throughout May.

 

After a week of hard selling, corn and wheat are closing in on support. July Kansas City Wheat has a previous low of 4.60 3/4 cents and July Corn is approaching the low set last September of 3.46 3/4 cents.         

May 29, 2015 | Grain Hedge Insights | Cody Bills | Views: 364

Weekly Cash Market Update

Tune in to watch Cody discuss the weekly export sales and talk about the basis changes throughout the country.

 

Tune into the weekly summary to hear about this week's export sales report and listen to Cody discuss the weekly basis changes. 

If you haven't taken a look at our mobile trading app yet, visit us over at Grain Hedge to get live streaming quotes on your mobile phone or tablet for report day! As always, call the office questions or for assistance. Our number is 877-472-4607 and we would be happy to talk.

 

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PLEASE READ OUR FULL RISK DISCLOSURE AT WWW.GRAINHEDGE.COM

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