January 28, 2015 | Grain Hedge Insights | Cody Bills | Views: 96

Strong Ethanol Stocks

Even with the highest ethanol stock on record, corn traded lower. Tune in to hear Cody discuss the reason for the lower trade numbers.

January 28, 2015 | Grain Hedge Insights | Cody Bills | Views: 105

Will Brazil transportation logistics lift U.S. soybean exports

Brazil’s harvest is beginning and already there’s negative news hitting the market about transportation. Could logistics problems lead to more U.S soybean sales in the second half of the marketing year?

The grains are all trading lower this morning with corn down 2, soybeans down 4 cents and wheat down 4 cents. Yesterday, mixed export news hit the market early with a 120,000 metric ton cancellation of soybeans to China followed by an announcement of a new sale that included 111,000 metric tons of soybeans to unknown destinations. This is the third major cancellations in the last 2 ½ weeks which signals China is switching it buying to South America.


Yesterday was the first day newly harvested Brazil soybeans arrived into crushing plants and northern ports and market the start of the first vessel being loaded at the port of Paranagua. However, news out of South America is not all positive after an announcement yesterday that the Tiete River, a key waterway in Brazil will be closed for the start of the season due to the low draft caused by a much drier than average January. Although this may not immediately affect the U.S. grain prices, the fact that Brazil delayed much of its planting due to dry weather in the fall could mean the crop comes out of the field at the same time. If this were to happen it would put increased strain on the transportation of crops to export facilities. If ports get congested and significant delays begin to occur, the U.S may see further export sales announcements that would have otherwise gone to South America.   


Weather could reach subzero temperatures next week throughout the Midwest leaving some of the winter wheat crop exposed to the harsh temperatures after the warm conditions reduced snow cover over the last few weeks. However, winter storm Juno should provide some snow cover throughout the Midwest late this weekend. Wheat continues to trend lower, pressured by the higher dollar and a lack of interest in U.S. wheat by foreign buyers.

January 27, 2015 | Grain Hedge Insights | Cody Bills | Views: 163

Soybeans Down Again

Soybeans lost much of Monday's traction, Cody and Kevin look at why prices faded.

Soybeans Down Again
January 27, 2015 | Grain Hedge Insights | Cody Bills | Views: 125

Can Soybeans Continue Yesterday’s Move?

Strong export inspections and concerns about the northern growing region of Brazil had soybeans move higher yesterday.

In the overnight session corn soybeans and wheat were mostly unchanged to slightly higher. Yesterday’s export inspections were positive for corn and soybeans which both beat analyst expectations. Soybeans recorded 1.5 million metric tons inspected for export which beat the high side of analyst expectations by nearly 50,000 metric tons. Corn beat expectations by an even higher margin, recording 886,825 metric tons compared to expectations which ranged between 600,000-750,000 metric tons. Wheat expectations were weak again with only 263,035 inspected to leave the country well on the low side of the average analyst guess.


Yesterday, the USDA attaché report adjusted wheat production to 12.5 million metric tons and 14/15 corn production to 22.5 million metric tons. Both estimates for corn and wheat are 500,000 metric tons over the USDA official estimate in the January Supply and Demand report.


Wheat continues to experience selling pressure as the market looks for some signs of life in the export sector. Since the sharp run-up in wheat prices which peaked on December 26th, the market has been searching for a pickup in wheat sales that would have otherwise gone to Russia.  However, U.S. wheat has struggled to gain competitiveness in the global market with the sharp decline in the Euro and the U.S. Dollar continuing to gains strength.


In Brazil, showers are expanding in the central regions this week with the North East parts of the growing region expecting to receive precipitation by next week. Northern Brazil has experienced significant precipitation deficits over the last 30 days, with actual precipitation 61% below the average precipitation for that time period. The lack of precipitation over the month of January has led AgRural to announce last Friday it expects to cut Brazil soybean production forecasts in their February report. Soybeans bounced over 11 cents yesterday and could possibly trade higher today. Overhead resistance is around the $9.91 level.    ​

January 26, 2015 | Grain Hedge Insights | Cody Bills | Views: 163

Why Did Soybeans Outperform Today?

Tune into GrainTV and hear Kevin and Cody discuss why they feel soybean was the only grain to move substantially higher. Also, listen to Kevin discuss what he thinks it will take for wheat to find a bottom.

January 26, 2015 | Grain Hedge Insights | Cody Bills | Views: 114

Corn and Soybeans Begin Week Lower

Corn and soybeans start off their week lower on technical selling.

In the overnight corn is trading 2 3/4 pennies lower, soybeans is down 2 3/4 cents and wheat is up 1/2 a penny after closing last week near one month lows. This weekend the Korea Feed association purchased 110,000 metric tons of corn from optional origin. Last week U.S. export sales were very strong for corn booking 2.1 million metric tons, twice the amount analysts were expecting.   


AgRural said in a report issued on Friday that they plan on cutting their forecast for Brazil’s soybean production in their February report due to the dry weather which has damaged soybean development in the northern part of the country. Over the last 30 days northern Brazil has received 60% less precipitation than its average during the same period in time.  


Soybeans looks to trend lower this week after falling through $9.91 which held as support since late October. After falling through $9.91 support, soybeans paused its decline but failed to trade back above that level. The price area of $9.91 which acted as support is now a firm resistance level. Considering the bearish surprise in ending stocks in the January Supply and Demand report, the disappointing NOPA crush numbers in December and the significant dip in export sales last week, soybeans may continue to feel selling pressure going forward.

January 23, 2015 | Grain Hedge Insights | Cody Bills | Views: 172
January 23, 2015 | Grain Hedge Insights | Cody Bills | Views: 215

Weekly Cash Comments

Cash basis commentary for week of January 23

Soybean futures continued to erode this week giving up 14 cents a bushel while corn found modest strength in a 3 cent advance. In the cash market, basis movements were fairly muted this week with US average corn basis gaining 1 cent a bushel while soybeans added 2 cents to the US average spot basis.


In the corn market, ethanol plants as a group were fairly quiet this week, although more strength was apparent in the Eastern Cornbelt of Indiana and Ohio where several plants boosted their spot basis by a nickel. At the Gulf, export premiums were mostly unchanged for the week and a modest drop in barge rates did little to change the overall trend of basis levels at river terminals.


For soybeans, gains were noted at river terminal on Wednesday with some key markets up 5 to 8 cents on the day, but by Thursday those premiums were gone and basis levels ended the week only up 2 cents on average. Gulf basis was up 4 cents on the week. At soybean plants, there has been little movement in recent weeks especially at Western Cornbelt plants were most basis levels have been flat for the past 6 weeks. In Ohio, a few key plants were up 5 to 10 cents a bushel this week.

January 23, 2015 | Grain Hedge Insights | Cody Bills | Views: 233

Huge Corn Sales Surprise the Market

This week's corn sales were reported at marketing year highs doubling analyst expectations.

In the overnight, soybeans and wheat traded lower slipping 5 ¾ and 5 ¾ cents respectively, while corn stayed mostly unchanged increasing by ¼ cent. The export sales report was very supportive for corn, neutral for wheat and bearish for soybeans which missed analyst expectations by a significant margin.


Wheat sales beat analyst expectations by a small margin, booking 458,400 metric tons which is up 61 percent from last week’s export sales total. Despite beating the analyst expectations which ranged from between 200,000-400,000 metric tons, traders will need to see a much larger pick-up in sales if prices are to be supported. Corn export sales were reported at a marketing year high booking 2,185,400 metric tons which was well above the 800,000-1,000,000 metric ton trader’s expected out of this week’s report. Old crop soybean sales were reported at 14,100 metric tons well below analyst expectations of 400,000-700,000. Soybean sales recorded a marketing year low this week. 


Export Sales:


                                        Expected                 Actual

Corn                           800,000-1,000,000       2,185,400

Soybeans                       400,000-700,000            14,100

Wheat                          200,000-400,000           458,400


Yesterday, the EIA ethanol production report showed output increased by 1000 barrels per day to 979,000 barrels per day this week. This brings ethanol production to a year over year increase of 5.4% compared to the USDA’s forecast in the January WASDE report which expects corn used for ethanol to increase only .8% year over year. Ethanol stocks also inched higher by 158,000 barrels this week to a total of 20.39 million barrels in this week’s report. Compared to last month ethanol prices have fallen from $2.20 to $1.27 per gallon.


The Agricultural ministry in Argentina announced an increase in their wheat production estimates after harvest has wrapped up. Argentina is expected to have harvested 13.9 million metric tons of wheat in the 2014/15 season up from its previous estimate of 13.2 million metric tons. The ministry also lowered its planted acreage for corn and soybean’s by .1 million hectares and .2 million hectares respectively.   


Yesterday the International Grains Council increased its 2014/15 global corn production to 992 million metric tons up from 982 million metric tons in their previous forecast. This revision takes into account the USDA revision lower in the U.S corn crop, but that production loss is was more than offsets with larger production from Ukraine, Argentina, Brazil and Europe. 

January 22, 2015 | Grain Hedge Insights | Cody Bills | Views: 166

Difficult for Corn and Soybeans to Find Traction

Cody and Kevin break down the ethanol numbers released today. Tune in to hear them discuss what was weighing down the corn market and what may have influenced lower bean prices after a positive overnight session.

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