April 21, 2015 | Grain Hedge Insights | Cody Bills | Views: 154

Winter Wheat Conditions Unchanged

On Monday the USDA's crop progress report pointed to an unchanged winter wheat rating despite the rain that went through the plains last week.

The grains are all trading lower in the overnight with corn down 3 3/4 cents, soybeans down 1 1/4 cents and wheat down 3/4 cents going into the pause. The U.S dollar is trading a fraction of a percent higher and crude oil is mostly flat after consolidating for the last couple days.


Crop conditions were released yesterday which showed that winter wheat rated good-to-excellent remained unchanged at 42 percent compared to last week. All other wheat rating categories stayed the same as well. This week’s crop progress report also highlighted the planting progress for spring crops. The most remarkable number was the amount of spring wheat planted. Spring wheat is now 36 percent planted compared to only 17 percent a week ago and a five year average of 19 percent. Corn planting seemed to disappoint analysts by showing only 9 percent had been planted, up from 2 percent last week and behind the five year average of 13 percent.


The avian flu is in the news lately with the Wisconsin governor declaring a state of emergency over the recent outbreaks in the state. The governor authorized the National Guard to help contain the flu and clean infected sites. Another bird flu instance was recently reported in a 3.8 million chicken flock inside Iowa. The birds were being raised by Sunrise Farms near the city of Harris. Since the beginning of the year the bird flu has been detected in Arkansas, Idaho, Kansas, Minnesota, Missouri, Montana, North Dakota, Oregon, South Dakota, Washington and Wisconsin.   

April 20, 2015 | Cody Bills | Views: 344
April 20, 2015 | Grain Hedge Insights | Cody Bills | Views: 123

China Reserve Rates Support Soybeans

China lowered reserve rates at their banks helping to boost liquidity and support a sputtering economy.

In the overnight session corn is down 1 3/4 cents, soybeans are up 4 1/2 cents and wheat in Chicago is up 1 1/2 cents. The U.S dollar is trading nearly .5 percent higher this morning with crude oil down .75 percent. Over the weekend china’s central bank cut the reserve requirement by 100 basis points to 18.5 percent in an attempt to encourage bank lending to help revive economic growth. This is the second industry-wide cut in two months and frees upwards of a trillion yuan of liquidity.


Soybeans traded higher in the overnight session in response to lowered reserve requirement in China. With China importing roughly 60 percent of soybeans traded worldwide, news of increased liquidity and access to capital will impact the price of Soybeans in Chicago.


The plains saw beneficial rains over the weekend which should continue to weigh on wheat prices. More showers are possible on Tuesday and Wednesday and further precipitation is expected in the 6-10 day forecast. The crop conditions will be released today after the close. Analysts are expecting an overall increase in the good-to-excellent rating after widespread rains last weekend helped to lower the risk of crop damage to the winter wheat crop. Last week good to excellent ratings were at 42 percent, down from 44 percent the week earlier. Over the weekend Egypt’s GASC purchased 300,000 metric tons of French, Romanian and Russian wheat. 

April 17, 2015 | Grain Hedge Insights | Cody Bills | Views: 218

Weekly Wrap Up

Cody reviews this week's prices and basis changes and looks at the long term change in barge rates.

April 17, 2015 | Grain Hedge Insights | Cody Bills | Views: 274

Weekly Cash Comments

Weekly Cash Commentary for week ending April 17

Grain basis levels continued to stagnate this week with both corn and beans each posting less than a 1-cent improvement on the week.


In corn, the biggest movement occurred at the Gulf where export bids were up 3 cents a bushel on nearby basis, but river terminals as a group posted only a 2-cent improvement. Strength was more prominent along the Ohio River areas were many terminals were up a nickel on basis. For the ethanol sector, production levels continue to slip along normal seasonal lines but plants as a group managed a modest 1-cent advance. In eastern Nebraska the two big plants continued to jockey for corn, raising nearby basis by 7 cents a bushel and currently stand at +10K, which exceeded the recent high of +8K in mid-March.


For soybeans, crushing plants were up a modest 1 cent a bushel but several plants in the Western Cornbelt boosted basis by 5 to 10 cents a bushel.  In Minnesota, key crushing plants have been steadily ramping up basis with gains of 25 cents a bushel since the first of March. At river terminals, basis levels were up modestly with a 1-cent gain on average, but like corn, bean basis along the Ohio River should greater strengthen the rest of the country.

April 17, 2015 | Grain Hedge Insights | Cody Bills | Views: 238

Wheat Prices under Pressure

Wheat prices have come under pressure from increased precipitation throughout the plains, weak export sales and the possibility Russian export taxes being lifted after July 1st.

In the overnight session corn is down 3/4 of a penny, soybeans are up a cent and wheat is up 3 1/4 cents. The dollar is trading slightly higher this morning, now hovering at 97.640 while crude oil is trading down nearly a percent after news that OPEC’s production in March added to the burgeoning global supply.


Wheat prices have suffered this week from beneficial rains to the plains region. Precipitation should expand into the central plains over the weekend bringing an expected .5-2 inches of rain to 80 percent of the wheat belt. The improvement in the weather, coupled with yesterday’s disappointing export sales provides little fundamental support for the grain going into the weekend.


The Russian Agricultural Ministry recently proposed to end the export tax on Russian wheat after July 1st. The decision will be voted on in either May or June after this year’s crop yield becomes clearer. Also on the international front, the Ethiopian government has issued an international tender to purchase 400,000 metric tons of milling wheat to be sourced from optional origins. Traders are waiting on the results of that tender. 

April 16, 2015 | Grain Hedge Insights | Cody Bills | Views: 270

Grains to Trade Higher?

Cody speculates where corn, soybean, and wheat prices will go and reviews the export sales report.

April 16, 2015 | Grain Hedge Insights | Cody Bills | Views: 205

Soybean Sales Beat Expectations

Export sales showed a stark contrast between wheat and soybeans this morning. Can yesterday’s NOPA crush numbers and this week’s export sales help propel soybeans higher into Friday?

In the overnight session corn and soybeans traded a relatively wide range but went into the morning pause mostly unchanged. Wheat increased 3 1/4 cents in the overnight and the U.S. dollar index continued its slide for the third straight day. Crude oil is also trading lower this morning off nearly 1/4 of a percent.


Export sales were slow for wheat this week booking 47,900 metric tons of old crop sales, down 85 percent from last week’s sales. This week’s wheat sales were a marketing year low, missing analyst expectations which ranged between 100,000-300,000 metric tons. Old crop corn sales were reported at 588,200 metric tons which was down from 639,000 metric tons reported last week. Corn sales were on the high side of the analyst expectations which ranged from 400,000-600,000 metric tons. Soybeans beat analyst expectations by booking 312,000 metric tons this week. This week’s soybean sales were a large improvement from last week which saw 176,000 metric tons of cancellations. Notable sales were reported to Germany, Netherlands, unknown destinations and South Korea.


NOPA soybean crush came in well over analyst expectations with 162.822 million bushels of soybeans crushed in the month of March. Analyst expectations ranged from 150.5 to 159.5 million bushels with the average analyst guess expecting 155.261 MBU. The latest NOPA report marks the largest March soybean crush on record. Soyoil stocks were reported at 1.420 billion pounds well over analysts’ expectations of 1.383 billion pounds, but below last year’s levels of 2.023 billion pounds.


Ethanol production declined for the second week in a row bringing weekly ethanol production to 924,000 barrels per day. This week’s 12,000 barrel per day decline in ethanol production marks the first time since October that weekly 2014-15 production has fallen below 2013-14 levels.  Despite falling below last year’s weekly production level, cumulative ethanol production this year has increased 5.4 percent compared to a USDA expected increase of 1.3 percent. This year’s ethanol stocks increased 162,000 barrels to 20.65 million barrels this week. 

April 15, 2015 | Grain Hedge Insights | Cody Bills | Views: 353
April 15, 2015 | Grain Hedge Insights | Cody Bills | Views: 252

Soy Market Focused on NOPA Crush

The soybean market will be watching the NOPA crush numbers this morning with expectations for a record March soybean crush.

In the overnight session the grains were mixed again with corn down 2 cents, soybeans up 1 3/4 cents and wheat in Chicago up 3 cents. The NOPA crush numbers will be released at 11 AM CST this morning which is expected to show a record amount of soybeans crushed for the month of March. Analysts are expecting March soybean crush to be reported at 155.261 million bushels with a range of estimates from 150.5 to 159.5 million bushels. In the same poll conducted by Reuters the average guess for soyoil stocks was 1.383 billion pounds. Estimates for soyoil stocks ranged from 1.275 to 1.463 billion pounds of oil on hand. 


A few wheat tenders were reported in the overnight session which helped to support wheat prices after two days of selling. In a tender that closed Wednesday, the Taiwan Flour Millers Association purchased 85,710 metric tons of hard milling wheat sourced from the United States. Jordan’s state grain buyer issued a tender to purchase 100,000 metric tons of optional origin hard milling wheat. 


An announcement out of Russia also helped support wheat prices this morning with Russian Agriculture Minister announcing that there is no reason to cancel the wheat export tax ahead of schedule. The tax is set to expire on June 30th and the ministry has made no decision yet on whether or not to extend the tax.


This morning the U.S dollar is continuing higher, up nearly 1/2 a percent which should put some pressure on commodities. Oil is trading higher as well, but currently trades near the 100 day moving average which may act as a resistance level to any attempt at a rally.

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