Grains Higher on Strong Export Sales
Strong export sales this morning helped lift the grains.
In the overnight session the grains traded higher with corn up 3 3/4 cents, soybeans up 10 1/4 cents and wheat up 5 1/2 cents this morning. The U.S. dollar is up nearly 1/2 a percent and crude oil is 29 cents higher. A reportable sale of 140,000 metric tons of old crop soybeans was announced this morning.
Export sales were strong this morning with soybeans and wheat beating analyst expectations. Old crop corn sales booked 364,900 metric tons which was within the analyst expectations and up sharply from last week’s marketing year low. Wheat sales topped expectations by 100,000 metric tons with 699,400 metric tons booked, and Soybeans booked 416,700 metric tons which was well above the 100-200,000 metric tons expected. New crop corn and soybean sales also outperformed with corn booking 443,300 metric tons and soybeans booking 899,100 metric tons. This week’s new crop sales were up substantially from last week.
Ethanol production declined 8,000 barrels per day this week to 965,000 barrels per day. This is the third weekly decline, but production levels are still well above last year and 101,000 barrels per day above the 4 year average. Ethanol stocks increased 89,000 barrels per day to 19.65 million barrels this week.
Today the spring wheat tour will be releasing its yield forecast after touring North Dakota since Tuesday. So far reports have been very positive with the first day yield estimate coming in 51.1 bushels per acre compared to 48.3 bushels per acre last year.
Russia’s largest farming region wrapped up harvest with 9.8 million metric tons of grain, an increase of 650,000 metric tons compared to last year. The Russian grain crop is looking relatively healthy with expectations for 100 million metric tons harvested this year, down 5 percent from 2014.
Basis is heating up for end users in the eastern grain belt after weeks of futures price declines. A soybean plant out of Claypool Indiana increased basis another 10 cents to +90X after jumping 10 cents the day before. In Morristown IN, a grain buyer lifted its bid by 15 cents last night to +120X. For producers that still have some old crop in the bins, the futures sell-off has introduced basis opportunity.
Exceptional Hard Wheat Yields?
Analysts in the northern states are giving mixed yield forecasts for hard wheat. Cody dives into the implications of the report as well as corn and soybean technicals.
Keep an Eye Out for Basis Opportunities
With prices declining over the last couple weeks and soybeans approaching the end of the marketing year, how are you keeping an eye out for basis opportunities?
In the overnight session the grains traded slightly lower with corn down 5 1/4 cents, soybean down 3/4 of a cent and wheat trading down 5 cents this morning as nearly ideal Midwest weather continues to be the focus. December corn is now only 18 cents off the lows it printed on June 15th and 16th. The U.S. dollar is trading a fraction of a percent higher and crude oil is down 43 cents. Asian markets traded higher on Wednesday with Shanghai closing up 3.44 percent.
On Tuesday the U.S. Spring wheat tour began. Scouts are touring North Dakota, the country’s largest spring wheat producer to inspect the crop development. Yields are expected to be very good this year with nearly ideal growing conditions in that region. Currently the USDA has spring wheat conditions pegged at 71 percent rated good-to-excellent across the six major wheat producing states and 84 percent good-to-excellent in North Dakota. A final yield projection is expected to be released on Thursday.
Yesterday, we saw some grain buyers in the eastern grain belt lift soybean basis sharply to help draw in any unpriced grain still stored on the farm. Sales have slowed in recent weeks as November soybean prices have slid nearly a dollar from their highs on July 14th. As prices declined, producers have become less willing to sell their soybeans triggering processors and elevators to increase soybean basis. Since July 1st we have observed spot soybean basis in Claypool Indiana increase 50 cents, providing an opportunity for producers in the area who still have grain in the bins. To see what basis opportunities may be in your area click here and take a 14 day free trial at Grain Hedge. Grain Hedge clients have access to a cash market intelligence platform that allows them to monitor basis opportunities within 200 miles of their farm.
Pricing Where it Matters
Cody breaks down how to get the best prices for your crop and reviews chart technicals
Market Finds Footing in Overnight
Can the market stop its slide in Tuesday’s trade session?
In the overnight session the grains seemed to find some footing with corn up a penny, soybeans up 10 1/4 cents and wheat in Chicago up 4 1/2 cents. The U.S. dollar is trading nearly 1/2 a percent higher and crude oil is up 11 cents. A reportable sale of 120,000 metric tons of sorghum for delivery to China was announced this morning. The sale was split between old and new crop delivery.
Crop conditions were released after the market closed yesterday and showed that corn conditions increased 1 percent in the good-to-excellent category to 70 percent. The market was expecting to see conditions mostly unchanged on the week. Soybean conditions were left unchanged at 62 percent good-to-excellent which missed expectations of a 1 percent increase this week. Spring wheat conditions also improved a percentage point this week to 71 percent rated good-to-excellent.
Weather is expected to continue cooperating for the majority of the grain belt with temperatures remaining cooler than normal in the second half of the week with showers throughout the Midwest. The Euro weather model is beginning to show some drier southern Midwest conditions expected to develop in the 6-10 day forecast which we will want to monitor in the days to come.
The export inspections report showed that all the grains saw a decline in grain inspections. Corn fell from 1,161,000 metric tons to 1,108,000 MT this year. Soybeans fell from 306,000 to 120,000 metric tons and wheat fell from 489,000 metric tons to 439,000 MT.
What Really Spurred on Intense Selling?
Tune in for a full break down of export sales, crop conditions, and upcoming weather.
Monday Morning Sell-Off
Can the grains recover following a sharply lower open this morning?
In the overnight session the grains traded sharply lower with corn down 10 1/2 cents this morning, soybeans down 13 cents this morning and wheat down 5 1/2 cents this morning for the December contracts. The U.S. Dollar is trading over 1/2 a percent lower and crude oil is also lower, losing 80 cents this morning.
December corn gapped lower this morning opening at $3.99 after closing on Friday at $4.02. It will be important to pay close attention to the close of today’s session since there are many levels of support that cross at $3.98 including the 62 percent retracement, the 100 day moving average and a trend. A rebound this morning with a close above $3.98 could signal a short term bottom in prices.
The crop progress report will be released at 3 PM CST tonight and will be followed closely by traders. Expectations are for corn and soybeans to be mostly unchanged to 1-2 points higher. Last week corn was rated around 69 percent rated good-to-excellent and soybeans around 62 percent rated good-to-excellent.
On Friday the Canadian Wheat board tour forecast a significant year over year decline in yields for Canadian crops. The tours forecast pegs Canada’s spring wheat yield at 38.9 bushels per acre compared to 45.7 bushels per acre last year. Durum yield is forecast to be around 27.8 bushels per acre vs 40.9 bushels per acre last year and Canola yield is pegged at 29.3 bushels per acre compared to 34.4 bushels per acre last year.
This morning Jordan’s state grain buyer issued a couple tenders this morning for 70,000 metric tons of corn and another tender to purchase 100,000 metric tons of wheat.
Disappointing Price Action for the Week
Cody breaks down the charts, looks at export sales news, and reviews weekly basis changes.
Grains Continue Lower on Friday Morning
The grains continued lower on Friday morning as the weather outlook continues to favor good growing conditions.
In the overnight session the grains traded lower with corn down 5 cents, soybeans down 7 cents and wheat down 5 cents. The U.S. dollar is higher by nearly ½ a percent and crude oil is 33 cents higher this morning. For Soybeans, the 50 percent retracement of the sharp rally in November soybeans sits at $9.70 ½ which is just 4 cents lower than where soybeans is trading this morning. The 50 percent retracement of the Corn rally is at $4.08 ¼ which was touched during yesterday's trade. This morning Corn trades at around $4.09 ½ cents.
This morning a few reportable sales were announced including a 220,000 metric ton sale of Soybeans to China for new crop delivery. This is the fourth consecutive day of reportable new crop soybean sales. Exporters also sold 231,000 metric tons of corn to Mexico, most of which was for 15/16 delivery and 104,350 metric tons of wheat to Taiwan for 15/16 delivery. In this morning's string of export sales another 116,000 metric tons of Sorghum was sold to unknown destinations split between old crop and new crop delivery.
Weather continues to look positive for crop development this morning with some showers passing through North Dakota, South Dakota and Minnesota this morning and providing moisture to Nebraska and Iowa on Saturday. The 6-10 day outlook looks to bring more precipitation to the grain belt after a week of drier conditions. Early next week temperatures could reach mid 90's in the southwest but should be mostly high 80's throughout the majority of the grain belt.
A recent crop forecast from Bueno's Aires projects a slight decline in planted wheat acreage throughout Argentina. The report lowered its planted area estimate from 5 million hectares to 4.8 million hectares for the 15/16 growing season. The ministry also lowered its 14/15 soybean production estimates from 61 million metric tons to 60.8 million metric tons. The revisions were a result of dryness throughout parts of the country.
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