Soybean Meal Continues Higher in the Overnight
The grains traded higher in the overnight again, led higher by continued strength out of soybean meal.
In the overnight session the grain inched higher with corn up 2 ¾ cents, soybeans up 5 ½ cents and wheat up 4 ¼ cents going into the pause in trade this morning.
Brazil’s key growing states are expected to receive much needed precipitation Thursday through next Tuesday. Mato Grasso was well behind normal rain fall totals in recent weeks but the upcoming rain event is expected to mitigate dry conditions. Argentina is also expected to receive rain in the coming week, with most rain events likely today and into the weekend. South American growing conditions will begin to be a larger focus for traders as this year’s U.S. crop is put into the bin.
Soybean meal is trading higher this morning, up another 1.15% going into the morning pause. Soybean Meal has been the leader to the upside since the beginning of October increasing from $300 per ton to $379 per ton this morning. The soybean meal spread has inverted since October 1st showing that supply concerns for soybean meal delivered in December has become a big concern. Prices for soybean meal have traded as high as $399.8 per ton yesterday as strong meal exports combined with the slower than normal harvest, rail issues and less active farmer selling has slowed pressured the cash soybean meal market domestically.
Surging Soymeal Boosts Soybean Futures
Soybeans again had a volatile trade day in Chicago. Today we discuss the move, what is going on in soymeal prices, and what the technicals for corn look like.
Soybean Surge Continues
Soybeans moved another 12 cents higher overnight after a strong Monday
Corn, soybeans and wheat have continued to move higher following yesterday’s technical breakout for soybeans. Coming into the morning trade break soybeans is up 15 cents, wheat is up 7 cents, and corn is up. A surging spot soymeal market as contributed to strength out of soybeans. Just in the last two days the December soymeal contract has broken out and rallied nearly 10%.
The talk regarding wheat this morning seems generally favorable for prices as concern about Australia’s 14/15 wheat production falling as much as 5 percent due to unfavorable weather in key growing regions. We also saw some demand for domestic wheat this morning when the Taiwan Flour Millers association purchased 41,250 metric tons of U.S milling wheat. Heavy purchasing of feed wheat by the Iranian government has caused demand to rise for feed grains. Over the last week Iran has purchased 60,000 tons of animal feed barley from the Black Sea region.
Yesterday’s crop progress report showed sizeable harvest improvements across the grain belt. 46% of U.S. corn is now harvested, just edging out expectations for 45% in this week’s report. Soybeans was right in line with trade expectations at 70% harvested.
Markets Retrace Yesterday’s Gains
The grain markets moved lower on Friday as corn and wheat touched key resistance levels. Talk of a poor start to Russian winter wheat will keep traders focused on weather conditions in Russia as wheat enters dormancy.
Crops Rally But Will They Hold?
Soybeans rose sharply to close off the day. Tune in to hear Kevin and Cody discuss export sales and if the stronger prices will hold.
Big Export Sales Hit Soybean Market
USDA reports 2,166,800 tonnes of soybeans sold - double trade expectations.
Corn and wheat futures are unchanged while soybeans are trading 3 cents higher coming out of the overnight session.
This morning’s export sales report showed continued strong demand for U.S. soybeans. The USDA reported 2,166,800 tonnes sold for the current marketing year, with China accounting for 80% of export business this week. This sales total was over double the highest trade expectation coming into today’s report. We continue to see soybean basis out of the gulf edge higher, increasing roughly 10 cents in the last 5 days. Corn sales for the week were at the high end of expectations with with 1,031,200 tonnes reported sold. Wheat sales missed the mark with just 299,400 tonnes sold.
Brazil is expected to receive rain across their grain belt today and into the weekend, easing dryness concerns for the key growing state of Mato Grasso. Dry conditions have hampered planting across the country with Mato Grasso receiving 10 centimeters less rain that normal during the last month. Soybean bulls have pointed to this story as helping soybeans in the near term. A close above $9.67 on the November 2014 soybean contract would indicate that this run might still have gas in the tank from a technical perspective. First notice day for the November contract is Friday, October 31st.
Harvest weather continues to look favorable for the majority of the U.S. grain belt. Most areas will be receiving above average temperatures and below average precipitation through the weekend.
Volatile Day in Chicago
Corn and Soybeans had a volatile day in Chicago on a Wednesday. Early in the trade session strength was observed across the sector but turned south at mid session and closed near lows
Grains Continue Higher in the Overnight
In the overnight session corn improved 2 cents, soybeans increased 12 ¼ cents and Chicago wheat increased 3 ¾ cents.
EXPORTERS SELL 419,000 TONNES U.S. SOYBEANS TO CHINA AND 113,000 T SOYBEANS TO UNKNOWN, ALL FOR 2014/15.
Soybeans surged another 12 cents higher in the overnight on very light news. A close above 972 ½ on the November 14 contract would be a strong technical signal that October’s price rally may have more gas in the tank. Bulls will point to strong export inspections and basis levels at the Gulf that have risen in the last 4 days for December delivered soybeans. The long term fundamentals of this market continue to point to lower prices when taking into account stocks/use for 2014/15 and the production outlook for South America. First notice day for November 14 futures is Friday, October 31st. If you need help rolling to January futures please contact our office.
This morning the Ukrainian Agricultural Ministry announced the country may export 11.76 million metric tons of wheat this marketing year compared to 9.2 exported last year. This year the countries wheat harvest increased 6.3% due to a higher number of planted acres and better yield. Currently the USDA has Ukrainian wheat exports pegged at 10 million metric tons in the October WASDE report which was unchanged from the previous report in September.
Over the last few days Chicago wheat and Kansas City wheat have been consolidating right around their 50 day moving averages which have acted as resistance. As more time passes around these levels the potency of the resistance will fade. If prices break out and move another leg higher, be cautious as we move right into the $6.20 resistance in Kansas City Wheat and the $5.42 resistance in Chicago wheat.
Soybeans Surge Higher on Chinese Demand Prospects
Today we discuss economic news out of China and weather expectations for Brazil as we approach the weekend. Tune in for the full report!
Weekly Cash Comments
The futures market slide 12 ¼ cents for soybeans and 8 ½ cents for corn but despite the sharp slide in prices, basis remained for the most part steady increasing only a penny for soybeans and 1 ½ cents for corn.
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Export Sales Review
Soybean Sales Bounce Back
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Will Brazil transportation logistics lift U.S. soybean exports
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