May 15, 2015 | Grain Hedge Insights | Cody Bills | Views: 188

Corn Basis Softens

Fundamentally, the grain market didn't see many changes. However, there are upcoming events that demand attention. Cody reviews these as well as weekly basis changes. Don't miss today's episode.

May 15, 2015 | Grain Hedge Insights | Cody Bills | Views: 200

Weekly Cash Comments

Weekly Cash Commentary for week ending May 15

Corn basis was mostly unchanged for the week with US average basis levels stagnate. However, a late week increase in futures prices but cash corn basis levels on the defensive. For soybeans, basis levels posted a modest 1-cent a bushel advance as nearby futures prices gave up 18 cents on the week.

 

In corn, Thursday’s 6-cent advance was met with relatively sharp drops in basis by corn merchants. Even Friday morning there was clear follow through with major plants in MN & NE posting lower basis compared to Thursday’s quotes. On average, ethanol buyers were off 1 cent a bushel but in the Western Cornbelt basis levels showed more weakness with some plants giving up 5 cents or more on the week. For export sensitive areas, basis levels were weaker thanks to a 2 cent drop at the Gulf. Upstream river terminals came under more pressure giving up 3 cents a bushel on average for the week.

 

For soybeans, USDA’s supply and demand report early in the week pointed to ample supplies of stocks in the coming growing season, and with near-term export business winding down, there seems like little incentive for end-users to aggressively bid higher for beans. At the Gulf, basis levels were up 3 cents a bushel, but river terminals on average only showed a 1-cent gain. For soy plants, there was only modest changes for the week with a 1-cent improvement on average. However, mid-week one Indiana plant was aggressively bidding up beans, but it was short-lived as pipeline supplies quickly filled the needs.

May 15, 2015 | Grain Hedge Insights | Cody Bills | Views: 208

NOPA numbers to be released mid-morning

Traders are anticipating NOPA crush numbers which are scheduled for release at 11 AM CST.

In the overnight session the corn traded a 1/4 cent higher, soybeans traded 2 cents higher and wheat in Chicago fell 2 1/4 cents. Wheat traded sharply higher in yesterday’s session fueled by rapid short covering and is now close to its 100 day moving average at 521 3/4 which will most likely offer up some resistance.

 

This morning Russia announced that they will remove the wheat export duty until a new formula can be introduced on July 1st. By removing the export duty, it is estimated that the country’s exports will increase by 1 million metric tons this marketing year.

 

Keep a close watch on NOPA crush numbers today which will be released out at 11 AM CST. Analysts are expecting to see April crush at 147.827 million bushels up from last year’s 132.667 million bushels. The average analyst guess pegs soyoil stocks to be at 1.461 billion pounds.

 

The climate prediction center is expecting to see El Nino continue throughout the summer in the northern hemisphere which may point to another year of optimal growing conditions. They estimated that there is a 90 percent chance that El Nino will continue through the summer and an 80 percent chance that El Nino will last through the end of the year.

 

Yesterday Informa announced it sees corn planted acreage at 88.737 million acres which is below the recent USDA most recent estimate of 89.199 million. Informa pegs its soybean acreage at 87.185 million acres which is 2.55 million acres over the USDA.

May 14, 2015 | Grain Hedge Insights | Cody Bills | Views: 191

Wheat Rallies Sharply

Cody gives an expert analysis of what moved the wheat market today as well as a break down of the export sales report.

May 14, 2015 | Grain Hedge Insights | Cody Bills | Views: 178

Can Export Sales Lift the Markets?

Export sales were released this morning revealing lackluster demand.

In the overnight session the grains moved higher with corn up 2 3/4 cents, soybeans up 1/4 cent and wheat up 8 1/4 cents. The dollar index continues to move lower this morning following yesterday’s April retail numbers. Crude oil is down 30 cents this morning trading around the $60 mark.

 

Export sales were relatively unimpressive this morning with old crop corn exports the biggest disappointment. Old crop corn sales were reported at 370,000 metric tons, down 56 percent from last week and missing expectations which ranged from 600,000-800,000 metric tons. Old crop wheat sales reported 115,000 metric tons which was on the high side of expectations which ranged from cancellations to sales of 100,000 metric tons. This week’s wheat sales were a significant improvement over last week’s 148,000 metric ton cancellations. Soybeans reported sales of 136,000 metric tons which was down 60 percent from the previous week and on the low end of expectations.     

 

Ethanol production jumped week over week by 25,000 barrels per day bringing total weekly production to 912,000 bpd. Despite the weekly improvement ethanol production is still in a downward trend that began in December. This week’s figures mark only the third time this marketing year that weekly production fell below 2013 levels. Cumulative ethanol production is up 4.8 percent from 2013, which is ahead of USDA expectations for an increase of 1.3 percent over last year. The May WASDE report left corn used for ethanol unchanged on the balance sheet.

May 13, 2015 | Grain Hedge Insights | Cody Bills | Views: 173

Grains Bounce on Weak Dollar

The sharp drop in the U.S. dollar has supported the grains this morning after Tuesday’s WASDE report.

In the overnight session the grains traded higher with wheat up 4 cents, soybeans up 5 1/2 cents and corn unchanged going into the morning pause in trade. The U.S. dollar is trading down sharply this morning after retail sales revealed no growth in April. Crude oil is trading up 78 cents this morning.

 

Yesterday the USDA released its May WASDE report which had little effect on corn and wheat, but sent soybeans into a tailspin by the end of the day.  Old crop soybean demand was revised higher by 20 million bushels to 350 million bushels after crushing and exports were increased by 10 million bushels each. The bullish old crop surprise was overshadowed by increased South American production and ominous new crop ending stock projections of 500 million bushels. The average trade guess expected new crop carryout to total 443 million bushels.

 

Old crop corn ending stocks increased 23 million bushels to 1.851 billion bushels which was shy of expectations. A 48 million bushel decline in feed and residual use was partially offset by a 25 million bushel increase in exports. New crop ending stocks were mostly on par with expectations with 15/16 carryout forecast at 1.746 billion bushels with a new crop yield pegged at 166.8 bushels per acre.

 

Ending stocks for old crop wheat were increased by 25 million bushels to 709 million bushels after the USDA bumped imports by 5 million bushels and slashed exports by 20 million bushels.  Export pace has been softening recently with the last couple weekly reports showing cancellations totaling to 597,000 metric tons. New crop wheat ending stocks were forecast at 793 million bushels which was above expectations of 750 million bushels. 

 

Global carryout for the 2015/16 marketing year looks to be higher than the expectations for soybeans and wheat. Global wheat ending stocks were pegged at 203.32 MMT up from 200.97MMT in 14/15 and above the average trade guess of 193.53 MMT. Global corn ending stocks are expected to hold mostly steady at 191.94 MMT compared to old crop carryout of 192.5 MMT. Global soybean carryout is expected to rise significantly to 96.22 MMT, above expectations of 95.17MMT and last years ending stocks of 85.54 MMT.   

May 12, 2015 | Grain Hedge Insights | Cody Bills | Views: 169

WASDE Report Day

Tune in to hear Cody break down reaction from today's WASDE and South American exports.

May 12, 2015 | Grain Hedge Insights | Cody Bills | Views: 192

Planting Progress Leaps Forward

In the crop progress report released after the close of yesterday’s trade session corn, soybeans and spring wheat plantings

Planting Progress Leaps Forward

In the overnight session the grains traded lower with corn down 2 1/4 cents, soybeans down 3/4 of a cent and wheat down 1/2 a penny. The U.S. dollar is trading over half a percent lower and crude oil is up 83 cents. Traders are preparing for the May WASDE report which will be released at 11 AM CST this morning.

Crop progress showed strong planting progress for the grains this week and improved wheat conditions after the market closed yesterday. Corn planting jumped 20 percent last week with 75 percent of the crop now planted, well ahead of the four year average of 57 percent complete during the same time period. Soybean planting pace is also ahead of the four year average with 31 percent of the crop in the ground compared to 20 percent usually. Spring wheat is now 87 percent planted, up from 75 percent planted last week and now 36 percentage points ahead of the four year average.

Export inspections were within analyst expectations for corn, soybeans and wheat. Corn showed 1,135,906 million metric tons inspected for export which was within the 900,000-1,150,000 metric tons expected. Wheat reported 378,407 metric tons and soybeans reported 263,263 metric tons which were both increases from last week.

The average trade guess for the May supply and demand report expects old crop wheat and corn stocks to increase from last report.  Wheat ending stocks are expected to climb to 693 million bushels from 684 million bushels in April. Corn ending stocks are also expected to climb to 1.864 billion bushels from 1.827 billion bushels last month. The average trade guess expects to see soybean ending stocks fall by 10 million bushels to 360 million bushels as strong weekly export sales will most likely force the USDA to revise demand numbers higher. The average trade guess pegs new crop ending stocks for wheat at 750 million bushels, corn at 1.752 billion bushels and soybean carryout at 443 million bushels.

Keep a close watch on South America production as both Argentina and Brazil has had better than expected harvests. The average analyst guess expects Argentina corn production to increase nearly 1 million metric tons to 24.95 MMT and soybean production to increase 1.5 MMT to 58.5 MMT. Brazil corn production is also expected to increase to 76.87 MMT from 75MMT in the April report. Brazil soybean production is expected to stay mostly unchanged at 94 MMT.

May 11, 2015 | Grain Hedge Insights | Cody Bills | Views: 153

Planting Progress

Cody reviews the current planting pace for corn and soybeans and looks at a positive weather outlook.There are mixed expectations from the upcoming WASDE report. Stay tuned for the full report.

May 11, 2015 | Grain Hedge Insights | Cody Bills | Views: 171

Traders Eye USDA Report on Tuesday

Traders will be focusing on the USDA report to be released on Tuesday

Traders Eye USDA Report on Tuesday

In the overnight session corn traded down 3/4 of a cent, soybeans jumped 1 3/4 cents and wheat fell 1 3/4 cents as we enter the morning pause.  The dollar index is up 1/3rd of a percent this morning and crude oil is 14 cents higher this morning. Planting pace for corn is expected to have another big jump in this week’s crop progress report scheduled for release at 3 PM CST. Some traders are expecting corn plantings to be as much as 70 percent complete.

 

Traders will be watching the May supply and demand report due out on Tuesday at 11 AM CST. The average trade guess expects old crop wheat and corn stocks to increase since last month’s WASDE report.  Wheat ending stocks are expected to climb to 693 million bushels from 684 million bushels in April. Corn ending stocks are also expected to climb to 1.864 billion bushels from 1.827 billion bushels last month. The average trade guess expects to see soybean ending stocks fall by 10 million bushels to 360 million bushels as strong weekly export sales force the USDA to revise demand numbers higher. The average trade guess pegs new crop ending stocks for wheat at 750 million bushels, corn at 1.752 billion bushels and soybean carryout at 443 million bushels.

 

Keep a close watch on South America production as both Argentina and Brazil has had better than expected harvests. The average analyst guess expects Argentina corn production to increase nearly 1 million metric tons to 24.95 MMT and soybean production to increase 1.5 MMT to 58.5 MMT. Brazil corn production is also expected to increase to 76.87 MMT from 75MMT in the April report. Brazil soybean production is expected to stay mostly unchanged at 94 MMT.  

 

China cut its interest rates on Sunday for the third time in six months which should support soybean prices this morning as lower borrowing costs can have a positive impact on demand for imports. China’s economy continues feel economic pressure with analysts expecting annual growth to fall to 7 percent this year from 7.4 percent in 2014. More economic numbers will be released on Wednesday including industrial output and investment.   

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