March 25, 2015 | Grain Hedge Insights | Cody Bills | Views: 201

Acreage Projections

During a quite trade day, Cody looks to acreage projections, ethanol production, and the daily charts as an indication of where grain prices might be headed.

March 25, 2015 | Grain Hedge Insights | Cody Bills | Views: 213

How many acres will be planted to Soybeans?

The grain markets are awaiting the quarterly grain stocks and the prospective plantings report due out on Tuesday next week. Here's what the market is expecting.

The overnight was a quiet trade with corn unchanged, soybeans up 1/4 cent and wheat down 3 1/4 cents. The dollar is trading lower by nearly 3/4 of a percent and crude oil is up 34 cents. This morning there were a couple reportable sales that were announced by FAS for 108,863 metric tons of soymeal to Canada for 2015/16 delivery and 114,000 metric tons of old crop corn to Mexico. The markets will be focusing on the 2015 prospective plantings report and the quarterly grain stocks report which will both be released at 11 AM CST.


The expectations for the quarterly grain stocks as of March 1st are as follows. For corn the average analyst guess pegs quarterly grain stocks at 7.609 billion bushels with the highest estimate at 7.8 billion and the lowest estimate at 7.459 billion bushels. Wheat stocks are expected to be around 1.140 billion bushels with a range of analyst guesses from 1.2 billion bushels to 1.083 billion bushels. Soybean stocks are expected to be around 1.346 billion bushels with a range of guesses from 1.404 - 1.273 billion bushels.


Lanworth released their latest planted acreage forecasts this morning raising its U.S. soybean seedings estimates to 85.5 million acres and its U.S. corn planting estimate to 88.2 million acres. This compares to Informa Economics estimates of 88.5 million acres of corn planted and 87.5 million acres of soybeans planted in the 2015 growing season. 

March 24, 2015 | Grain Hedge Insights | Cody Bills | Views: 170

Wheat Rally Breaks

Cody and Kevin talk about wheat's move lower and what they expect soybeans to do during the second half of the week.

March 24, 2015 | Tech Talk | By Steve Davidson | Views: 593

Corn Research is Complex, Fast-paced and Promising

New generations are available faster; new techniques focus on external control, rather than gene modification

Corn Research is Complex, Fast-paced and Promising
Photo by AgReliant Genetics

Corn research and development is continually evolving in a complex, fast-paced and challenging environment. Corn breeders are using a broad range of techniques ranging from time-honored traditional plant breeding practices amplified by powerful tools such as biostatistical analysis to developing new approaches such as external applications of genetic materials for weed, insect and virus control.

Tom Koch, vice president of research for AgReliant Genetics gave attendees at the 119th annual convention of the National Grain and Feed Association a feel for the challenges and opportunities facing the seed industry.

Seed corn is produced globally. “There is world-wide diversity that we are tapping into now more than ever,” Koch says. “A lot of this diversity is getting locked up, as countries view their germ plasm as a national treasure.

“Where we do have access to use germ plasm, it’s bringing some very interesting and unique flavor to the U.S. market.”

He says that with new molecular analysis techniques, there will be more of a smorgasbord of hybrids for companies to offer.

Koch says his company, whose U.S. corn brands include AgriGold and LG Seeds, uses one of the most advanced and efficient forms of double haploid (DH) breeding technology to make new varieties ready for market much faster. “In three generations, this creates an instant homozygous line; traditionally, it has taken size or seven generations to get a true breeding line.”

GMO regulations have made corn breeding more complicated. Koch explained that many countries that don’t allow GM production by their farmers may allow production of GM seed, as long as it’s exported.

He cites Chile, as an example, where an AgReliant production facility is 30 miles south of Peru, where GMOs are forbidden. “We have to be very cautious about how we manage GM production,” he says.

Koch sees little change on the horizon regarding regional acceptance of current GM crops, notably Europe.

“But I think we are about ready to move past this current era and move into the next biotech sector, where we are not necessarily inserting genes into the plants,” he says.

These new practices include putting genetic materials – referred to as biological or biopesticides –  into the crop protectant spray. “The biological is applied outside of the plant. They don’t have to modify the plant itself. This has been done with seed treatments; now researchers are looking at doing it more on plants.”

From a plant breeder’s standpoint, Koch says this is exciting. “Working with a spray instead of the plant itself puts the plant breeder back in control of the genetics, instead of the biotechnician.”

He says of the 300,000 genes plant breeders manage, just 8 genes control the herbicide resistance. Without dealing with them, and the extensive regulatory cost and time they demand, more attention can go to overall improved genetics.

These sprays and biological seed treatments will be a very heavy area of research, he says. Regulatory challenges will be part of the puzzle, as to determining what specifically constitutes genetically modified in these types of scenarios.

Koch also shared his enthusiasm for the potential of airborne drones.  With them, he sees the ability to quickly and accurately analyze virtually every plant in a test plot for a wide range of agronomic variables, once the current questions by the Federal Aviation Agency regarding the commercial application of drones are resolved.

And, he says practices such as indirect selection accuracy and multi-trait genomic selection allows much faster and more accurate analysis of new lines of hybrids. Speed is valuable, considering that each new generation of a corn line is expected to deliver an increase in yield.

“Basically we’re trying to get more, test more, test it better, get new genetics and get better homogenous lines while decreasing the cycle length using many different techniques,” he says.

March 24, 2015 | Grain Hedge Insights | Cody Bills | Views: 127

Grains find resistance after two day rally

The grains ran into some selling pressure in the overnight as each commodity tests resistance levels on the daily chart.

In the overnight session the grains found some selling pressure near resistance levels. Corn is down 1/2 cents, soybeans are down 3 cents and wheat is down 8 1/4 cents on the day. The Dollar index is trading slightly higher this morning and crude oil is lower by a percent.


Corn is currently trading at its 50 day moving average and is now at a price level scared by consolidation throughout most of February and March. Be aware that selling pressure at these levels is likely following the strong two day rally that lifted us off the short term lows of $3.67. Soybeans are also near a resistance level where the 20 day simple moving average and 50 day simple moving average converge.


State level crop conditions reported yesterday that Kansas winter wheat good to excellent ratings were unchanged from the previous week at 41 percent, Oklahoma increased 4 percent to 44 percent good to excellent and Texas improved 4 percent to 55 percent good to excellent. Despite this week’s improvement in crop conditions, traders see a drier pattern developing over the next 10 days with only a chance of patchy showers in the 11-15 day forecast. Russia’s weather stressed crop looks to receive more moisture over the next week as rains expand across Europe, Ukraine and into Russia.  


Export inspections were mostly positive this week with corn beating analyst expectations with 994,666 metric tons of corn booked this week compared to 750,000-950,000 metric tons expected. Soybeans and wheat both met analyst expectations with 519,464 metric tons and 511,069 metric tons respectively. 

March 23, 2015 | Cody Bills | Views: 290
March 23, 2015 | Grain Hedge Insights | Cody Bills | Views: 97

Grains Higher on Falling Dollar

The grains are trading higher today as the dollar continues its slide following the FOMC meeting that removed the chance that the first rate hike would occur in June.

In the overnight session the grains moved higher with corn up 4 1/2 cents, soybeans up 6 3/4 cents and wheat up 6 1/2 cents going into this morning’s pause in trade. The U.S. dollar is pulling back this morning continuing the sell-off on Friday. Corn is currently trading at $3.89 near its 50 day moving average. Crop conditions reports will be released for some the plains states later today.


Over the weekend some precipitation helped out central to eastern Texas, but that was not enough to provide meaningful relief for the drought that is focused on the panhandle of Texas and Western Oklahoma. Dryness looks to continue over the next two weeks with only expectations for light scattered showers. The Delta was able to dry a bit over the weekend providing some opportunity for seeding after excess moisture has slowed fieldwork recently. The weather should remain favorable in the far south for the remainder of the month with showers expected to return in April.  


China has turned to Ukraine and away from the U.S. to source corn. In January only 13,663 metric tons of U.S. corn was imported into China which was down 93 percent from last year. However, Ukrainian corn imports have surged in February to 574,000 metric tons, up nearly 200 percent from last year.​

March 20, 2015 | Grain Hedge Insights | Cody Bills | Views: 157
March 20, 2015 | Grain Hedge Insights | Cody Bills | Views: 221

Weekly Cash Comments

Cash Commentary for week ending March 20

Grain futures came under pressure this week as US dollar strength and slow export business took its toll on the market. In the cash market, there was little movement in basis by grain buyers as a whole with U.S. average soybean basis unchanged for the week while corn basis gained only 1-cent on average across the country.


Barge rates were on the rise this week especially along the IL & MS River where gains of 10 cents or more per bushel were fairly common for barge costs. As a result, basis levels in these areas were off fairly sharply. For corn, Gulf export bids were up 4 cents a bushel which helped to blunt some of the basis declines upstream along the river system. For ethanol plants, basis gains were better than the overall U.S. average gaining 2.25 cents a bushel this week. Especially strong were some plants in the Western Cornbelt were gains of 5 to 10 cents were fairly typical at some key plants.


For soybeans, it was another week of lackluster movement in basis with U.S. average basis sitting at -43K, virtually unchanged since the start of the month.  At the Gulf, export basis was up 8 cents a bushel, but higher barge costs offset this gain putting river terminal bids under pressure by 2 cents a bushel. For soybean plants, basis levels were mostly unchanged but some modest strength was apparent in the Western Cornbelt plants.

March 20, 2015 | Grain Hedge Insights | Cody Bills | Views: 135

Will we get a Friday rebound?

The grains positive over the night session as the dollar pushes lower.

In the overnight session the dollar pulled back slightly helping grains push higher. Going into the morning pause corn was up 2 1/4 cents, soybeans were up 3 1/4 cents and wheat was up 5 3/4 cents. Keep in mind that at 10:30 CST this morning Informa will release their latest crop planting forecasts. A recent survey from Farm Futures Magazine forecast soybean acreage at 87.25 million acres, up 4.2 percent from the last year. The farm futures poll also saw corn plantings at 88.34 million acres versus 90.6 million acres planted last year.


Yesterday, the Buenos Aires grain exchange held their soybean production forecast for Argentina steady at 57 million metric tons. The Ag Ministry did the same, keeping their forecast at 58 million metric tons compared to the March WASDE report which is looking for 56 million metric tons of soybean harvested in Argentina this year. Over the last two weeks temperatures across Argentina have been above normal putting some strain on the southern growing regions which missed out on the increased precipitation throughout February and early March. Overall there is still very little concern over the crop size in Argentina.   


Dryness in the plains continues to provide a reason for traders to cover short positions. The latest drought monitor shows parts of the Texas panhandle and western Oklahoma in “Extreme Drought” with only minor relief expected over the next 30 days.  Scattered light showers of 1/4 inch or less was seen across the plains yesterday with some 1/4-1” inch totals observed along the Kansas and Oklahoma border. However, the forecast turns drier over the next 10 days with only chances of light and spotty relief in the 11-15 day forecast.      

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Weekly Cash Comments

March 27, 2015 | Grain Hedge Insights | Cody Bills

Corn grain basis was unchanged for the week, while soybeans posted a 2-cent advance.


In corn, basis levels were up one-cent a bushel at the Gulf export market, but river terminals were on average unchanged for the week. 

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