June 30, 2015 | Grain Hedge Insights | Cody Bills | Views: 307
June 30, 2015 | Grain Hedge Insights | Cody Bills | Views: 142

Acreage Expectations

Today the USDA releases the Planted Acreage and Quarterly Grain Stocks report. Below are the expectations.

In the overnight session the grains were mixed with corn up 1 cent, soybeans down 5 3/4 cents and wheat down 1 1/4 cents. The U.S. dollar is trading 1/2 a percent higher and crude oil is trading up 24 cents. Two major USDA reports will be released at 11 AM CST including the Planted Acreage report and the Quarterly Grain Stocks report. Below are the expectations for both reports.

 

In a poll of analysts conducted by Reuters the average forecast for corn acreage is 89.292 million acres. This is up from the 89.199 million acres of corn forecast on March 31st. For soybeans and wheat, analysts are expecting to see a half million acre increase from the March 31st report to 85.171 million acres and 55.867 million acres respectively. However, whatever the USDA releases this morning will likely come under scrutiny since the survey was conducted in early June. With slower than average soybean planting pace and saturating rains throughout the Midwest some fields may not get seeded.

 

Crop progress was released yesterday at 3 PM CST after the market closed and showed another drop in corn and soybean conditions. The U.S corn rated good-to-excellent slipped 3 percentage points to 68 percent from 71 percent last week.  Ohio’s crop conditions declined notably from 61 percent rated good-to-excellent last week to 42 percent this week. Soybean conditions also slipped falling to 63 percent rated good to excellent from 65 percent last week. Soybean planting increased 4 percent this week but planting pace still lags significantly in Missouri which is only 62 percent complete compared to the four year average of 94 percent complete. Wheat plantings increased this week to 38 percent but still lag the four year average of 46 percent complete by the last week in June.

 

In a Reuter's poll of analysts the average analyst guess for the quarterly grain stocks is 718 million bushels for wheat, 4.555 billion bushels of corn and 670 million bushels of soybeans. This would be a draw down in grain stocks from 1.124 billion bushels of wheat, 7.745 billion bushels of corn and 1.334 billion bushels of soybeans reported on March 1st. Traders will be watching corn stocks closely to gauge feed demand which could be negatively influenced by the bird flu this year. 

June 29, 2015 | Grain Hedge Insights | Cody Bills | Views: 222
June 29, 2015 | Grain Hedge Insights | Cody Bills | Views: 208

All eyes on Tuesday’s USDA Reports

The market is anticipating the acreage report and quarterly grain stocks report scheduled for release on Tuesday the 30th.

In the overnight session, the grains traded higher with corn up 5 1/2 cents, soybeans up 3 3/4 cents and wheat up 9 cents by the pause of trade this morning. The U.S. dollar is up only a fraction of a percent and crude oil is down 71 cents. All traders in long July grain contracts will need to liquidate or roll their positions by the close of trade today with Tuesday the 30th being First Notice. Tuesday the 30th also marks the release of two major USDA reports including the Planted Acreage report and the Quarterly Grain Stocks report.

 

In a Reuter’s poll of analysts the average analyst guess for the quarterly grain stocks is 718 million bushels for wheat, 4.555 billion bushels of corn and 670 million bushels of soybeans. This would be a draw down in grain stocks from 1.124 billion bushels of wheat, 7.745 billion bushels of corn and 1.334 billion bushels of soybeans reported on March 1st. The Quarterly Grain Stocks report will be released at 11 AM CST tomorrow.

 

Weather this week is expected to bring cooler than normal conditions to the Midwest and leave the northwest significantly hotter than normal. Rains are expected to pass through the Midwest leaving Illinois, Indiana Michigan and Ohio with more precipitation than normal this week while North Dakota, South Dakota, Nebraska and Kansas expect drier weather. 

June 26, 2015 | | Views: 227
June 26, 2015 | Grain Hedge Insights | Cody Bills | Views: 266

Grains Rally Sharply

Grains rally sharply early this morning as more rain is forecast to soak the already saturated Midwest.

In the overnight session the grains traded sharply higher with corn up 10 1/2 cents, soybeans up 19 1/2 cents and wheat up 26 3/4 cents this morning. Wheat has broken through resistance which hovered around $5.36 3/4 and is building momentum to the upside, soybeans has been above its 100 day moving average since Monday and is now trading above 10 dollars. Next resistance level for July soybeans is around $10.42 3/4 which was a previous high back on February 26th. Corn is trading around $3.86 1/2 this morning which is just above its downtrend resistance of $3.81 and the 100 day moving average of $3.79. Keep a close watch on today’s trade action as we could see prices chop around throughout the trade day.

                                        

This morning’s rally is triggered by the strong amount of rain that went through the Midwest on Wednesday and the rain forecast throughout Thursday and Friday. On Wednesday evening a storm blew through Iowa and Missouri dropping as much as 7 inches of rain in some areas. Traders are concerned that the excessive rains will damage yield prospects for this growing season. Thursday will usher in a another storm into the Midwest bringing 1 to 3 inches of rain to South Dakota and then Missouri, Illinois, Indiana and Ohio on into Saturday.

 

In other parts of the world dry weather is beginning to be a concern. The conditions of French wheat declined this week according to the FranceAgriMer who cited dry weather as the main reason. As of June 22nd the good to excellent ratings fell to 81 percent compared to 85 percent a week earlier and 87 percent on June 8th. Weather in France is expected to remain hot and dry with temperatures forecast to hit record highs next week in many parts of the country.​

June 25, 2015 | Grain Hedge Insights | Cody Bills | Views: 234
June 25, 2015 | Grain Hedge Insights | Cody Bills | Views: 156

Can Export Sales Lift the Market

Export sales showed mostly average sales within the range of analyst expectations. Traders eye the June 30th WASDE report.

In the overnight session the grains traded higher with corn up 2 1/2 cents, soybeans up 8 1/4 cents and wheat up 2 1/4 cents. The U.S dollar is mostly unchanged this morning and crude oil has slipped 29 cents lower.

 

The EIA ethanol production numbers showed that last week’s production was the largest this marketing year. Weekly production increased 14,000 barrels per day to 994,000 BPD. Ethanol stocks dropped 878,000 barrels to 19.840 million barrels helping to paint a more bullish picture. This marketing year ethanol production is up 4.7 percent compared to 2013/14.

 

This week’s export sales report showed that wheat booked 434,300 metric tons which was on the high side of analyst expectations which ranged from 200,000-450,000. Soybean sales fell 11 percent compared to last week to 118,000 metric tons but was still within the range of analyst expectations. Corn sales declined 21 percent to 496,800 metric tons. This was below the analyst estimates that ranged from 500,000-700,000 metric tons.

 

New crop sales were strong for corn however, booking 297,500 metric tons which was above the 100,000-200,000 metric tons expected this week. Soybeans booked 202,500 metric tons to be delivered in the 2015/2016 marketing year. 

June 24, 2015 | Grain Hedge Insights | Cody Bills | Views: 252
June 24, 2015 | Grain Hedge Insights | Cody Bills | Views: 154

Grains pull back in the overnight

The grains gave back some of the gains in the overnight session as traders prepare for the USDA planted acreage report to be released the end of June.

In the overnight session the grains traded lower with corn down 3 1/4 cents, wheat down 2 3/4 cents and soybeans down 6 1/2 cents. Crude oil is trading 10 cents lower and the U.S. dollar is down a fraction of a percent. The market will be focusing on the June 30th planted acreage numbers that is expected to have the biggest impact on Soybeans.

 

Soybeans were only 90 percent planted as of Monday which is 5 percent behind normal pace. Rains forecast across the Midwest this week helped lift soybean prices as traders became nervous about the remaining unplanted acreage. Allendale estimates corn planted acreage at 91.742 million acres which is up from the 89.199 million acres forecast by the USDA in March. Allendale expects soybean acreage to increase to 85.105 million acres which is up from 84.635 million acres estimated by the USDA in the March 31st report. The July soybean contract is currently above the 100 day moving average but is giving back some of its gains this morning. Look at 974 1/4 as a support level for today and tomorrows trade session.   

 

Winter wheat harvest is behind the average pace during this time of the year. On Monday, the crop progress announced that only 19 percent of the crop had been harvested which is behind the 31 percent harvested we typically see. Harvest prospects look to be mostly uninterrupted in the near term with some scattered storms expected on Thursday and Friday. However, the forecast turns wet again for the beginning of July which is likely to continue to disrupt harvest pace. Traders are also concerned about the wheat quality after the plains received significant moisture late in the growing season. Head scab has spread rapidly in the winter wheat fields of central Kansas. 

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