January 15, 2015 | Grain Hedge Insights | Cody Bills | Views: 204

Export Sales Support Bounce in Grains

The export sales helped support the bounce in the grain complex after showing better than expected corn and soybean sales.

In the overnight session we have seen some buyers come back into the market with corn up 4 ½ cents, soybeans up 6 ½ cents and wheat in Chicago up 4 ¼ cents. Yesterday, corn and soybeans both found some support with soybeans dipping below $10 during the day but closing the session at 10.10 ¾. This morning 127,000 metric tons of old crop corn sales were reported for delivery to Japan.

 

Also out this morning will be NOPA crush numbers which may add a sharp amount of volatility to the market. Expectations for December crush is for 166.9 million bushels of soybeans which would be a record. The previous crush record was December 2013 which used 165.3 million bushels of soybeans.

 

The weekly export sales were released at 7:30 AM CST this morning showing that wheat met analyst expectations with sales of 284,000 metric tons sold. Wheat sales were up 89% week over week, but even with the improvement that kind of volume will do little to help wheat prices move back toward the high printed on December 18th. Last night Egypt’s GASC set a tender to buy an unspecified amount of wheat from global suppliers, the market will be watching the results closely.

 

Corn sales picked up this week with 818,800 metric tons compared to expectations of 550,000-750,000 metric tons. This week’s corn export sales more than doubled last week’s numbers which only booked 387,648 metric tons, well below analyst expectations. This week’s export sales show corn sales now 63% booked compared to the USDA’s January 12th expectations.

 

Soybean sales booked 1,133,200 metric tons of old crop sales which is up 24% from last week and well above analyst expectations of between 700,000-900,000 metric tons. Soybean export sales have now booked 92% of projected USDA export sales.

 

Today we will also see Informa Economics’ projected acreage for the 2015/16 marketing year.

 

 

                              Actual Export Sales            Analyst Estimates

Corn                              818,800                     550,000-750,000

Soybeans                     1,133,200                      700,000-900,000

Wheat                           284,000                      250,000-500,000

January 14, 2015 | Grain Hedge Insights | Cody Bills | Views: 230

Grains Continue to Feel Pressure from Monday’s WASDE

Cody discusses the continued effects of the recent WASDE report as well as what is behind relatively strong ethanol production. Tomorrow Informa and export sales numbers will be released. Tune in for the full brief.

January 14, 2015 | Grain Hedge Insights | Cody Bills | Views: 278

Grains Continue Slide in the Overnight

The grains continue their slide in the overnight in the wake of heavy fund selling during yesterday’s trade session.

The grains continued their selling in the overnight after a sharp day lower caused by significant fund liquidation. Going into the morning pause in trading corn is down 6 cents, soybeans is trading down 6 cents and wheat is 5 ¾ cents lower. March soybeans has broken through $10 and currently trades at $9.98 which is the low side of the range it has been trading in since late October. This morning two reportable sales were announced at 8 AM CST including 102,750 metric tons of old crop soybeans to unknown destinations, 100,000 metric tons of new crop soybeans to unknown destinations and 125,000 metric tons of corn to Taiwan for 2014/15 delivery. Today is the 5th and final day in the annual five day re-balancing period for commodity index funds.

 

Thursday the 15th will be another important day for traders to watch closely. NOPA crush numbers for December will be released at 11 AM CST and are expected to show a record for number of bushels crushed for that month. Analysts expect to see 166.9 million bushels of soybeans crushed in the month of December above the previous record of 165.384 in December of 2013. The analysts crush guesses range from 164.263-171.135 million bushels. Analysts expect the average soyoil stocks to reach 1.122 billion pounds up from 1.005 billion pounds in November. Also on Thursday, Informa Economics will release its 2015 acreage forecast update which will include implications for U.S. production in the 15/16 marketing year.

 

Although the U.S. wheat market hasn’t been able to find any traction after printing highs of $6.77 on December 18th it appears French wheat has been benefiting the Russian curb in exports. Farm office FranceAgriMer cut French 14/15 soft wheat ending stocks to 4.34 million metric tons from 4.55 million metric tons last month. Exports were also increased to 8.8 million metric tons compared to 8.5 million metric tons last month. 

January 13, 2015 | Grain Hedge Insights | Cody Bills | Views: 259

Grains Trade Lower

Tune in to hear Cody discuss what factors moved the market lower today as well as what traders should be paying attention to as the week closes.

January 13, 2015 | Grain Hedge Insights | Cody Bills | Views: 287

So Where Do Prices Go From Here

After four major reports were released onto the market yesterday many producers are wondering where prices will go from here.

In the overnight session the grains bounced with corn up 3 ¼ cents, soybeans were up 7 ¼ cents and wheat trading 10 ½ cents higher going into the morning pause. This morning's trade session should be supported by a nice export sale of 105,000 metric tons of old crop corn sold to unknown destinations.

 

Soybeans sold off sharply yesterday after the USDA revised yield and harvested acreage higher, lifting production by 11 million bushels. Ending stocks held steady after the USDA raised the 14/15 export sales expectations. However, traders looked at the 410 million bushels of U.S ending stocks as bearish after expecting to see a 17 million bushel revision lower in yesterday’s report.

 

U.S production wasn't the only place ending stocks increased. Brazilian soybean production was also revised higher by 1.5 million metric tons which helped lift global ending stocks by .9 million metric tons. With the current quality of the South American crop, and a continuation of the existing precipitation profile, we could begin to see more revisions higher in South American production over the next month which would weigh heavily on the market. With the South American crop expected to reach the peak of harvest in late February I would expect to see weaker prices over the next couple months.

 

In Brazil, showers are expected to cover central and northwest part of the growing region which will continue to improve the crop development. The northeastern part of Brazil is still the driest region. In Argentina, rains over the weekend helped provide relief to fields after experiencing some hot and dry weather over the last week. In the overnight more rains are expected throughout central Argentina.

 

Corn prices were mostly stable following the report after yield was slashed to 171 bushels per acre and harvested acres were left unchanged. However, despite the decreased production, quarterly grain stocks were larger than expected revealing weaker than expected feed usage. Ending stocks were revised 121 million bushels lower providing a positive surprise for bulls. With a bullish revision in supply behind us, and demand weaker than expected in this round of reports, I am concerned prices will not be able to make new highs in the rally that began back in October. We will need to see a strong increase in demand to be the backbone behind any further rally, especially with no foreseeable threat in South American production. 

January 12, 2015 | Cody Bills | Views: 258

Big Reports Today

Many important reports were released today. Tune in to hear Cody dissect the reports and discussed how this week's market might be affected.

January 12, 2015 | Grain Hedge Insights | Cody Bills | Views: 312

January Report Expectations

​The grains are eyeing the USDA's four major reports​ scheduled for release at 11 AM CST. Here are the expectations.

In the overnight session corn is trading down 3 ¾ cents, soybeans is down 4 ¾ cents and wheat is down 2 cents. This morning all eyes will be focused on the four major USDA reports scheduled for release at 11 AM CST.

 

Corn Production: Average Analyst Guess

Corn production is expected to be lowered by 58 million bushels, with yield revised .1 bushel per acre lower and a 332,000 acre decrease in harvested acres. The large gap between FSA and NASS acreage numbers is expected to narrow in this report.

 

Soybean Production: Average Analyst Guess

Soybean production for 2014 is also expected to see a slight decline by only 2 million bushels. Yield is expected to increase by .1 bushels per acre, but acres are anticipated to drop by 359,000. Neither corn nor soybeans are expecting a sizable revision in the production side of the balance sheet.   

 

Note: The average analyst guess from the Reuters Poll suggests production to be lowered for both corn and soybeans. However, of the last 20 years there have been 4 record yielding crops for corn and 5 record yielding crops for soybeans. In every record yielding crop the USDA has increased its production forecast in the January report. Perhaps this January report will be no different. 

 

January Ending Stocks Estimates

Analysts are expecting ending stocks to rise for wheat by 12 million bushels to 666 million bushels carryout. Corn and soybean ending stocks are both expected to decline in this month's report. The average analyst guess has corn expected to decline by 71 million bushels to a 1.927 billion bushels carryout and soybeans to shrink 17 million bushel to 393 million bushels as a result of strong export sales which have booked 90% of the current USDA expectation already with 34 weeks left in the marketing year.  

 

Quarterly Grain Stocks Expectations

Quarterly grain stocks are expected to be substantially larger than last years levels at this time due to the record yields this year. If the expected corn stocks are realized, this will be the largest amount of corn stocks ever in the U.S during this time of the year. However, with grain at discounted prices in the 4th quarter of 2014 we may see a healthy amount of grain used for feed which could provide some surprise in the market.  

 

Winter Wheat Seedings

Winter wheat seedings are expected to increase this year by 3.8% with over 500,000 acres being added to hard wheat and over 400,000 acres removed from soft wheat.  

January 09, 2015 | Cody Bills | Views: 332

Report Expectations For Monday

Tune into GrainTV to listen to Cody and Kevin break down the analyst expectations for this report. Kevin discusses the cash market changes this week. Don't miss this episode.

January 09, 2015 | Grain Hedge Insights | Cody Bills | Views: 487

Weekly Cash Comments

Corn basis was unchanged for the week on average across the US while soybean basis improved a modest one-cent a bushel.

Corn basis was unchanged for the week on average across the US while soybean basis improved a modest one-cent a bushel.

 

Ethanol production fell for the 2nd straight week as a normal seasonal decline starts to take hold. Although ethanol fuel prices have come down sharply in response to lower gasoline prices, DDG prices have moved higher helping to keep ethanol margins propped up. Year-to-date production is still running 4.8% ahead of the same period last year, although USDA is only factoring in a 0.3% increase in corn use for ethanol on the year. Ethanol plants as a group were up nearly 2 cents a bushel on spot corn basis this week, although must of the  strength was confined to the Western Cornbelt where basis levels were up a dime at some key plants in IA & NE.  At the Gulf, basis levels were off 2 cents a bushel but had little impact on upstream river terminals as basis levels were unchanged on average across river markets.

 

For soybeans, basis levels improved 1–cent a bushel across the US but river terminals saw a better improvement thanks to an 8-cent gain at the Gulf this week. Although soybean export business was expected to slow in the start of the New Year, weekly sales of 910,000 were better than the 500,000 to 700,000 MT expectations going into the Thursday announcement by USDA. For soybean crushing plants, basis levels were unchanged on average for the week.

January 09, 2015 | Grain Hedge Insights | Cody Bills | Views: 390

Expectations for Reports on Monday

With the market eyeing the report on Monday here are the expectations for crop production and ending stocks.

In the overnight session the grains are mostly mixed with corn up 2 ¾ cents, soybeans trading 1 ¾ cents lower and wheat down by ½ a penny.   Trade will be heavily focused on the reports scheduled for release at 11 AM CST on Monday. Below are expectations for Mondays report.

For the crop production report the average analyst expectation is for corn output to be lowered by 58 million bushels. The average analyst guesses yield will be revised .1 bushel per acre lower and a 332,000 acre decrease in planted acres. The large gap between FSA and NASS acreage numbers is expected to narrow in this report.

Soybean production for 2014 is also expected to see a slight decline by only 2 million bushels. Yield is expected to increase by .1 bushels per acre, but acres are anticipated to drop by 359,000. Neither corn nor soybeans are expecting a sizeable revision in the production side of the balance sheet. 

 

Average Analyst Crop Production Expectations

                                            Production (billion bushels)           Yield (BPA)         Harvested Acres

Corn                                      14.349                                          173.3               82.765

December                               14.407                                          173.4               83.097

 

Soybean                                   3.956                                            47.6              83.044

December                                 3.958                                           47.5               83.403

 

In the January WASDE report analysts are expecting ending stocks to rise for wheat by 12 million bushels to 666 million bushels carryout. Corn and soybean ending stocks are both expected to decline in this month’s report. The average analyst guess has corn expected to decline by 71 million bushels to a 1.927 billion bushels carryout and soybeans to shrink 17 million bushel to 393 million bushels as a result of strong export sales which have booked 90% of the current USDA expectation already with 34 weeks left in the marketing year. 

 

Average Analyst Guess: Ending Stocks

                                          Avg. Ending Stocks Guess              December

Wheat                                           .666                                  .654

Corn                                            1.927                                1.998

Soybeans                                       .393                                  .410

      *In Billion Bushels

 

For a full report on January 12th expectations take a Grain Hedge 14 day free trial by clicking here. 

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