Postive Exports Sales
Cody and Kevin discuss the implications export sales expectations are having on soybeans. Kevin also gives a brief summary about the weather effects in Ukraine
Ethanol Production Numbers Out Today
Cody breaks down how Russian and Ukraine turmoil are affecting the wheat market. Kevin discusses this week's export sales expectations.
Weak Trade for Soybeans and Corn
Kevin discusses the effect of potentially lower ethanol prices. Cody examines the "head and shoulders" pattern soybeans have shown over the past few weeks.
Southern States Cooperative Named 2014 Feed Mill of the Year
This is the second time in three years that Southern States has been recognized as the Feed Mill of the Year
Employees from Southern States Cooperative
This is the second time in three years that Southern States has been recognized as the Feed Mill of the Year award recipient.
Epperson (left) with Jeremy Ruckman from Kent (Hagerstown) receiving runner-up award.
Wheat Prices Cool in the Overnight
In the overnight session the dollar rallied back toward the top of the trading range helping the grains shed a few pennies going into the pause in trade.
In the overnight session corn fell 1 ¾ cents, soybeans fell 1 cent and wheat backed off from yesterday’s gains by 4 ¾ cents. The dollar index, which fell yesterday, is now back trading near the highs on the daily chart, up over ½ a percent this morning.
Grain inspections yesterday showed that wheat under-performed expectations only recording that 273,055 metric tons left the country last week. Soybean also under-performed expectations reporting 1,849,221 metric tons were inspected for export compared to expectations between 2,400,000 and 2,700,000 metric tons. Corn was the only grain that recorded larger than expected volumes shipped for export with 743,769 metric tons inspected last week.
The wheat market rallied yesterday as some restrictive measures in Russia were placed on the market. Grain quality will be more closely monitored which is expected to drive up the cost of exporting grain and slow the physical movement as well. This is intended to help curb Russia’s red hot export pace which is 30% ahead of last year’s export pace. The market fears that Russia might move toward even more restrictive measures if grain continues to be exported at a rapid pace. Russia wants to ensure that domestic demand needs are met, which have grown stronger than normal due to their ban on EU agricultural products.
Wheat Rises Higher
Cody and Kevin discuss new Russian policies that could affecting wheat prices. Kevin examines the mixed export inspection numbers.
Russian Regulations May Slow Exports
Russian regulations may slow the pace of exports and increase the cost of exporting grain.
In the overnight session corn continued trading lower finishing down 3 cents going into the morning pause. Soybeans which traded a 13 ¼ cent range last night, added 1 ¼ cents to the closing price on Friday, and wheat improved 1 ¼ cents as well. Soybeans had a particularly negative session on Friday, falling 33 cents with below average daily volume. Be wary of a bounce early in the session today as many traders are back from their Thanksgiving travels. However, a bounce in this morning’s trade session might be a good time to price soybeans if you are looking to lock in prices in the near-term.
Russia is introducing new regulations which would curb grain exports out of their country. With the Ruble declining and a bumper crop harvested last year, exports have been thriving, increasing around 30% over last year’s levels at this time. Now Russia is trying to take steps to ensure enough supply is available for domestic use. The Veterinary and Phytosanitary Surveillance Service (VPSS) introduced new regulations to check conditions of grain, storage facilities and machinery which will most likely result in declining grain exports. These measures will help to support U.S wheat prices.
Over the weekend there have been no major developments in South American weather. Saturday and Sunday provided Argentina with expected rains, but drier weather is expected out of the 6-10 day forecast. Brazil should continue to see the same levels of precipitation which should help seeding progress in their country. Brazil had been behind pace planting early on in the season due to excessive dryness.
Weekly Comments - November 28
Cash Grain Comments
Cash grain markets continued to post gains this week with corn basis advancing 4 cents on the week while soybeans added 3 cents on average to US basis levels.
River terminals found the greatest strength this week thanks to a continued slide in barge rates. At the Illinois River, barge rates at the start of November were around $1.20 a bushel but have now fallen below 80 cents a bushel for the first time since late summer. River terminals as a group were up 7 cents a bushel. For ethanol plants, basis levels were up 3 cents a bushel as a group but there was noticeable weakness this week with about a third of the ethanol plants posting unchanged to lower basis levels. Production at ethanol plants continued to be strong, posting above last week’s marketing year high coming in at 982,000 barrels per day and sets the year-to-date total at 4.5% above last year.
For soybeans, basis levels mostly improved and the falling barge rates helped push basis levels higher there by 7 cents a bushel. For bean plants, basis levels were modestly higher advancing 3 cents a bushel. Eastern CornBelt soy plants found greater strength than those in the West.
Market set to open lower on Friday
The decline in crude oil has many traders concerned the selling pressure may spill into the grain complex this Friday.
Attention: Following the Thanksgiving holiday the markets will open at 8:30 CST but close early at 12 CST.
Export sales for wheat were reported within analyst expectations booking 431,500 metric tons which was up 19% week over week. Corn sales beat analyst expectations recording 944,900 metric tons of sales, up 4 percent from last week. Soybeans also beat analyst expectations with net sales of 1,485,400 metric tons which was well above the analyst expectations of between 700,000-1,000,000 metric tons. Soybean sales were up sharply from the previous week which only booked 483,020 metric tons and provides a strong case for steadfast short-term demand.
SovEcon said in some materials prepared for a conference that Russia’s grain crop may fall to 86 million metric tons in 2015 compared to 104 MT produced this year. Dryness has taken its toll on the wheat crop since it was seeded in late August. The dry conditions are forecast to continue into the first part of December.
The European benchmark for oil, Brent Crude, has fallen $6 per barrel to below $72 following the OPEC meeting which decided to keep oil output steady despite the falling prices. The decisions to keep output the same was largely a result of Saudi Arabia which is trying to keep its share of the energy market. Lower prices will force higher priced energy producers to lose share of the market if they are unable to withstand the lower prices in the near term.
Wheat Falls After Six Days of Rising Prices
Weekly Cash Comments
Grain markets found heightened volatility this week with corn futures posting gains while soybeans traded lower. In the cash market, basis for both corn and soybeans were unchanged on average across the country this week, but that masks a fair amount of movement by end users and exporters.... [Read More]
Grains fell sharply in the overnight session
Grains fell sharply in the overnight session with wheat leading the slide lower on a 19-cent decline. This follows yesterday’s 24-cent fall from its high on the March contract of 6.77. For corn, prices were off 6 cents in the night trade while beans fell 7 cents.[Read More]
Strong Export Sales Lift Grains
Markets Up Sharply in the Overnight
In the overnight session the grains are trading sharply higher with corn up 5 ¼ cents, soybeans up 7 ¼ cents and wheat up 15 ½ cents this morning. This morning we saw large single day reportable sales of 126,000 metric tons of corn to unknown destinations, 1.5 million metric tons of...[Read More]