February 26, 2015 | Grain Hedge Insights | Cody Bills | Views: 295
February 26, 2015 | Grain Hedge Insights | Cody Bills | Views: 263

Export sales provide little support to the markets

Export sales were on the lower end of expectations this morning with corn missing expectations by a couple hundred thousand metric tons.

In the overnight session the grains traded mixed with corn and soybeans up 2 ¼ each and wheat trading 1 ¼ cent higher going into the morning pause in trade. Today is the last day to get out of any March grain contracts with first notice day Friday the 27th.


Yesterday at 11 AM CST trucker strike representatives met with the Brazil government to seek a resolution to the multi week long strike that has clogged roadways in Brazil. Following the meeting, Brazil minister says that the Government is not open to altering fuel tax to appease the striking truckers. However, the government followed that announcement by stating that the truckers are showing flexibility and that they expect a resolution will be reached soon.


Exports sales for corn were weaker than expected, while wheat and soybeans reported sales on the low side of analyst expectations. For the week ending February 19th corn export sales totaled to 715,800 MT which was down 23 percent from last week. Analysts were expecting to see corn sales between 900,000 and 1,100,000 metric tons. Soybean export sales were on the low side of expectations booking 459,200 MT compared to expectations between 450,000-650,000 metric tons. Soybean sales are still well ahead of the pace needed to meet USDA expectations. Wheat sales were reported 328,300 metric tons of sales, within the analyst expectations and up 23 percent from the previous week.


                                        Expected                   Actual

Corn                          900,000-1,100,000            715,800

Soybeans                       450,000-650,000            459,000

Wheat                          200,000-400,000            328,300


This morning the International Grains Council forecast the world wheat crop to increase 2 million metric tons to 719 MMT for the 14/15 marketing year. The IGC forecast a decline for the 15/16 marketing year to 705 MMT. 

February 25, 2015 | Grain Hedge Insights | Cody Bills | Views: 289

Ethanol Production out this Morning

Ethanol production seemed to be following the normal trend while maintaining a 5% advantage over last year's production. Resolutions look to be near for the South American truckers on strike.

February 25, 2015 | Grain Hedge Insights | Cody Bills | Views: 328

Soybeans slip in overnight after yesterday’s gains

Soybeans slipped a few pennies in the overnight session after yesterday’s rally. The Brazil trucker strike continues.

The grains are moving lower this morning with corn down a penny, soybeans down 4 cents and wheat in Chicago down 3 ½ cents. Yesterday’s rally in Soybeans sparked some farmer selling after prices rose sharply to an intraday high of $10.29. Keep a close watch on corn today as it trades next to a support level of 3.76 cents which was a previous low on in November, December and the middle of January. This morning a reportable sale of 120,000 metric tons of HRW wheat to Egypt was announced.   


The Brazil trucker strike and blockade continues this morning although a main road to the Port of Santos was cleared early Wednesday. Even though the striking trucks were dispersed along that stretch, congestion remains an issue with a large amount of trucks looking to use the road soon. The Attorney General stated that they will begin levying significant fines if the strike continues to grow. Despite the threat of large fines, the strike continues throughout many of the countryside roads as truckers protest the increase in diesel prices. Traders are still concerned that the flow of grain to ports and the flow of diesel to small towns which fuel combines will cause slowdowns and delays in weeks to come.


Also in Brazil, scattered showers will continue Thursday through Sunday and continue to disrupt corn planting. Corn planting is about a week behind normal and the 6-15 day forecast showing very few windows of opportunity for corn planting between precipitation events.   

February 24, 2015 | Grain Hedge Insights | Cody Bills | Views: 303

Strong Day for Soybeans

Soybeans were on the rise following strikes in Brazil. Cody and Kevin break down news from Europe that seemed to put selling pressure on wheat later in the day.

February 24, 2015 | Grain Hedge Insights | Cody Bills | Views: 353

Soybeans Up on Uncertainty of Brazil Logistics

Soybeans are trading higher this morning as truckers block roadways in Brazil protesting higher fuel taxes.

This morning the grains are trading higher with corn up 1 ½ cents, soybeans up 9 cents and wheat up 1 cent. Soybeans are trading higher on concerns about supply disruptions out of Brazil due to the truckers who are protesting higher fuel prices by blocking main roads across Brazil. Traders are concerned that the lack of transportation will leave small towns without fuel to power combines during the harvest, and generally delay the movement of grain to ports.


Yesterday export inspections were better than expected for both corn and wheat. Corn recorded 900,965 metric tons of grain leaving the country which was higher than market expectations which ranged from 700,000-850,000 MT. Wheat export inspections were recorded at 501,458 metric tons which were around 100,000 above the high side of expectations. Soybean showed 961,749 metric tons were inspected for export which was down from 1.3 million metric tons inspected last week and on the low side of analyst expectations.


Egypt’s GASC announced yesterday that they are seeking 55,000-60,000 metric tons of U.S origin wheat after prices declined late last week. Egypt canceled a tender for U.S. wheat last Wednesday citing that prices were exaggerated. Since the close of Wednesday’s session, wheat prices have fallen 22 cents.


The weekly Texas crop conditions report showed that the percentage of wheat crop rated good-to-excellent was 44 percent, unchanged since last week. Poor-to-very poor was also unchanged at 14 percent.   

February 23, 2015 | Cody Bills | Views: 369
February 23, 2015 | Grain Hedge Insights | Cody Bills | Views: 193

March Grain’s First Notice on Friday

First notice day for March contracts is Friday the 27th. Traders not looking to take delivery on grain should exit positions or roll to the May contract.

The grains are trading mixed this morning with corn down ¾ of a penny, soybeans up 4 ¼ cents and wheat down 1 ½ a cent. This Friday the 27th is the First Notice day for March corn, soybeans, wheat, KC wheat and MN wheat. Hedgers that are not looking to take delivery should exit their March positions or roll into May contracts.


Truckers in Brazil are protesting higher diesel prices by using road blocks and parking rigs on the shoulders of Highway BR 163 to interrupt harvest grain flow throughout the country. The protest began on Wednesday in two small towns with a group of transportation companies and independent truckers but quickly spread to surrounding towns. Truckers are looking for the state government to reduce the diesel tax.    


A few tenders have been offered this morning including an optional origin tender by Jordan’s state grain buyer to purchase 100,000 metric tons of hard milling wheat and another Israeli private tender to purchase up to 90,000 metric tons of corn and 25,000 metric tons of feed wheat.


The CFTC commitment of traders report showed that large speculators which includes hedge funds, cut their long corn positions for the week ending February 17th and lessened their short wheat and short soybean position. 

February 20, 2015 | Grain Hedge Insights | Cody Bills | Views: 229
February 20, 2015 | Grain Hedge Insights | Cody Bills | Views: 258

Weekly Cash Comments

Weekly Market Wrap Up for week ending February 20

Grain futures posted positive gains this week with beans up 23 and corn up 6, but in the cash market overall trends in the basis were mostly flat. Corn managed a 1-cent improvement on the week, while soybeans were unchanged on average across the country.


For corn, export demand and ethanol use continue to be strong demand stimuli. Friday’s export sales report showed over 900,000 MT of old-crop sales, surpassing analyst expectations of 650-900,000 MT. Physical exports of only 696,000 MT meant that outstanding sales, or the amount of grain left to be shipped, continuing to grow to 17.4 MMT. River terminals appear to be bidding more aggressively for March delivery versus spot, with March premiums fetching 7 to 9 cents over most spot deliveries. This likely will help improve basis in the coming weeks. For ethanol, weekly production grew by 3,000 barrels per day and continues to eclipse last year’s pace. Year-to-date production is up 5.7 percent from the same period last year, while USDA is only looking for a 2.3 percent increase in corn use for ethanol.


In soybeans, monthly crush numbers for January came in at 162.675 million bushels, up from last year’s January figure of 156.943 million bushels and just over expectations of 162.673 million bushels. For the week, soybean plants were lower by a penny per bushel on basis with losses most apparent in SD, MN & IA. On the export front, river terminals were up half a penny per bushel on average although there was a mix of buyers that were up and others that were down on the week. Export business continues to be stronger than expected as weekly sales of 505,600 MT were at the high end of analyst expectations on the week.

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Weekly Cash Comments

March 27, 2015 | Grain Hedge Insights | Cody Bills

Corn grain basis was unchanged for the week, while soybeans posted a 2-cent advance.


In corn, basis levels were up one-cent a bushel at the Gulf export market, but river terminals were on average unchanged for the week. 

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