April 23, 2015 | Grain Hedge Insights | Cody Bills | Views: 149

Strong Export Sales Lift Grains

The grains got a nice shot of positive news after export sales were announced this morning well above analyst expectations.

In the overnight session corn, soybeans and wheat are trading higher with corn up 1 cent, soybeans up 4 3/4 cents and wheat up 3 1/2 cents. The dollar is trading down nearly 1/4 of a percent and crude oil is up 56 cents a barrel.  


Export sales were very positive today for the grains with corn, soybeans and wheat either beating analyst expectations or reporting weekly sales on the high side of expectations. Corn reported 867,000 metric tons of sales, an increase of 48 percent from the previous week and well above the 400,000-600,000 metric tons expected by analysts. Corn is still well ahead of the pace needed to meet USDA expectations. Soybeans booked 102,100 metric tons of export sales which was a decline of 67 percent from last week. With the market expecting cancellations however, positive soybean sales are bullish news. Continued export sales show that despite the record harvest in Brazil, demand for U.S. soybeans remains strong. Wheat sales showed some strength this week booking 397,500 metric tons of sales, above the 0-100,000 metric tons expected by the market and well over the 47,000 reported last week.


The Ethanol production reported showed an increase in production last week by 6,000 barrels per day bringing the total to 930,000 barrels per day. This was the first increase reported in three weeks, but despite the trend lower in weekly production since the beginning of the year we are still 5.3 percent ahead of last year’s production levels. Ethanol stocks increased week over week by 697,000 barrels per day to 21.34 million barrels per day.   


The International Grains Council raised its forecast for global corn supply by 10 million metric tons to 951 million metric tons this morning. The council also cut wheat production for the 15/16 crop by 4 million metric ton to 705 million metric tons, citing a decline in crop predictions across Argentina, China and India. The international grains council’s global wheat forecast is a substantial decline from last year’s 721 million metric tons. 

April 22, 2015 | Grain Hedge Insights | Cody Bills | Views: 205

Ethanol Production

Cody reviews ethanol production trends, weekly weather, and gives an update of the current Bird Flu situation in Iowa.

April 22, 2015 | Grain Hedge Insights | Cody Bills | Views: 214

Corn Lower Again in the Overnight

The corn market is pressured again this morning by the rising concern of bird flu and its effects on U.S. poultry

In the overnight session the grains were mixed with corn down 1 3/4 cents, soybeans down 3 3/4 cents and wheat up 1 1/4 cents going into this morning’s pause in trading. The U.S dollar is trading mostly unchanged and crude oil is off .25 percent.


Concerns about the reaction to the bird flu have the corn market nervous that feed use for hens could start to slow. Although the number of birds killed by the flu may not directly affect the feed use in a big way, the reaction by importers could hurt the demand for U.S poultry. Mexico in response to the growing cases of bird flu has stopped all imports of live birds and eggs from the state of Iowa.      


Precipitation throughout the Midwest is expected over the weekend and again in the middle of next week. Heavier precipitation in the western grain belt is forecast later in the 11-15 day outlook. The U.S is now 9 percent planted for corn, just behind the four year average of 13 percent at this point of the season. There are no significant planting delays expected in the forecast.  The plains should continue to receive precipitation throughout next week which helps limit the stress on the winter wheat crop. 

April 21, 2015 | Grain Hedge Insights | Cody Bills | Views: 202

Reports of Bird Flu

Cody takes a look at how the news of bird flu will affect feed usage and discusses the Brazilian Real.

April 21, 2015 | Grain Hedge Insights | Cody Bills | Views: 132

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: 320
April 20, 2015 | Grain Hedge Insights | Cody Bills | Views: 102

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: 196

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: 237

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: 181

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. 

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