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.
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.
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.
Feed &Grain publisher, Arlette Sambs, gives her take on the holidays, planing for bussiness and the state of amerian politics
Whew! What a year.
Now that all of the negative political ads are off every news and entertainment site I visit online, and off my TV and radio, I can concentrate again!
Of course, I’ll be concentrating on hoping they finally get something done. Perhaps I expect too much?
I’ll also be concentrating on work.
Every year from right before Christmas to after the last bowl game on New Year’s day, I have just about every minute of every day scheduled for something – shopping, holiday parties, baking, friends’ houses, relatives’ houses, kids coming home, people at our house, football games to watch. I love it all!
Then, come January 2 (or maybe I’ll wait until January 5) I’ll settle back in at work. And I’ll wonder how the holidays whizzed by so quickly and what challenges we’ll be facing and working to overcome in the 360 days left in 2015.
I wouldn’t miss any minute of the holidays for anything. But it seems more and more, the “work thing” is constantly there, bubbling up. At times it relates to something that didn’t work the way I wanted it to last year. What should we have done differently? Did we see it as a problem soon enough? How do we avoid it in the future?
At other times it will be an idea or a notion or a problem that I know we will need to tackle soon for 2015 to be a success. What did we do that worked? What opportunities do we have that we’re not seeing clearly? How can we shake loose the residue of 2014 and look clearly at 2015?
I guess that’s part of what makes this time of year so hectic. While we just shut the door on last year, we already need to be looking six months – or more – into 2015, jumping on opportunities, fixing problems. It has to be a constant focus if we’re going to grow and succeed.
Maybe that’s the difference between most of us and those whom we elect? We know we have to fix things and fix them now. We know that an unhappy customer is not just one person whose business we might lose (bad enough), but that having one irritated customer could be the first sign that we’re not doing the right thing.
We know we can’t stand still or take for granted any success we’ve had in the market we serve. In business, we can’t afford complacency or laurel-resting or not thinking ahead – and thinking ahead so far it makes our heads hurt.
Taking action now keeps customers happy and keeps fresh ideas and opportunities on the horizon.
Tune in to hear Cody and Kevin discuss how grains closed out the week as well as what to expect in the near future. Cody and Kevin also discuss the world wheat market and how the U.S. dollar index is affecting it.
Cash grain markets found strength as futures prices were down on the week. Both spot and corn bean basis levels posted impressive gains, advancing 5 and 3 cents a bushel, respectively, on the week.
Corn found strength from slow farmer sales as harvest wrapped up as well as underlying demand. Ethanol plants as a group were up 7 cents a bushel with 10 cent gains fairly typical as plants push well above harvest lows. Production at ethanol plants for the week were above last week’s marketing year high coming in at 970,000 barrels per day and sets the year-to-date total at 4% above last year. At river terminals, barge rates fell sharply on the week helping improve basis levels at river markets.
For soybeans, basis levels mostly improved and the falling barge rates helped push basis levels higher there. However, soybean sales were on the light side of expectations with only 483,000 MT of new business as compared to expectations of 700,000 to 1,000,000 MT. For bean plants, basis levels were mostly flat but overall slightly improved with a 2-cent gain. Monthly NOPA crush for October was the strongest on record for soybean crushing, 7 million bushels above estimates.
The grains did not continue their move yesterday's move higher in the overnight, but soybeans chopped around most of the night printing a 7 cent range.
In the overnight session corn traded down 1 ½ cents, soybeans traded up 5 ¾ cents and wheat in Chicago traded down 2 ½ cents. Keep in mind that today is the LAST TRADE FOR DECEMBER OPTIONS.
Precipitation is developing over the Delta region which will likely expand to bring moisture to the eastern two thirds of the grain belt throughout the weekend. The 6-10 day forecasts show drier than normal precipitation throughout the majority of the Midwest. North Dakota and Minnesota look to be wetter in the 6-10 day forecast.
Crop concerns are still minimal in South America other than planting delays in Argentina. Pockets of the country continue to receive precipitation keeping planting pace behind the average pace. About 20% of corn and soybean acres and about 30% of wheat cause some concern about timely planting.
Winter weather in Russia is bringing Rostov on Don water levels to 2.3-2.4 meters, which will stop shipment from that region. This is a shallow draft port with a grain export capacity estimated at 3 million metric tons a year, and typically loads 3,000-5,000 metric ton vessels destined for Mediterranean countries.
In the overnight session the grains moved lower with corn down 1 ½ cents, soybeans down 8 ¼ cents and wheat down 5 ½ cents. Minneapolis wheat is down 4 ½ this morning after a 15 cent gain in yesterday’s session. The cash market is firming for spring wheat in Portland which saw basis rise 20...
The grains are mixed this morning with corn up 1 ¼ cents, soybeans down 3 ¾ cents and wheat in Chicago down 2 ½ cents. Traders should keep an eye on the Informa Economics latest crop estimates scheduled for release at 10:30 AM this morning. Also on the horizon is the USDA Supply and Demand...
In the overnight session the grains traded mixed with corn down 1 cent, soybeans up 2 ¼ cents and wheat up 2 cents going into the morning pause in trade. The Chicago wheat market seems to have held support off $4.96 last Thursday which was the previous low back on February 2nd....