September 22 – Morning Comments

This morning corn and soybeans are trading lower as wheat shows some relative strength for the first time in a while. Corn is down 2 ¾ soybeans is down 15 cents and wheat traded 4 ¼ cents higher into the morning pause in trading.

November soybeans gapped lower to start the overnight session and are currently trading 15 cents lower in Chicago. Trade chatter has been surrounding strong yield reports over the weekend but nothing firm has been announced. No new fundamental stories are pressuring things lower this morning so it looks like a continuation of the large bear move we have seen since June 30th. Our bias continues to be that there is more downside risk in the soybean market than corn even at current prices.

This week’s weather looks to be relatively dry with only one widespread rain forecast over the next two weeks. The 8-14 day forecast looks to be wetter than normal throughout the western part of the grain belt encompassing a large area from North Dakota to Texas. Temperatures during that same time period are expected to be 60-70% warmer than normal throughout the majority of the grain belt.

The wheat market is taking a bounce this morning after an Egyptian purchase over the weekend. Egypt bought 55,000 tonnes of U.S. soft red winter wheat for delivery during October. The U.S. wheat market has struggled to find interest from Egypt over the last several months and this sale will signal that prices have moved low enough to compete with Black Sea exporters.

The USDA crop report will be released at 3 PM CST and will be the first week the USDA reports soybean harvest.

September 19 – Morning Comments

Grain markets are trading lower again this morning with corn down 2, soybeans off 7, and Chicago wheat down 5 cents.

Fundamental news was very light overnight and traders remained focused on harvest pace and early yield reports.

Yields have been varied but in general have confirmed expectations for a very large crop. Harvest weather looks promising over the next two weeks as a dry weather system is expected to bring below average precipitation to the majority of the grain belt. Frost/freeze concerns should not enter the market until early October as temperatures are expected to be above average through October 1st. The threat of an early freeze on late developing crops remains the last hurdle for yield on this year’s corn and soybean crops.

Scottish citizens voted down a referendum to leave the United Kingdom on Thursday. The final vote was close with 55% voting to remain in the United Kingdom and 45% favoring separation. British and European markets are rallying as a result after results were announced and the dollar index is bouncing back from Thursday’s sell off.

September 18 – Morning Comments

U.S. grain futures slipped lower over night with corn trading down 2 cents, soybeans off 2 cents, and Chicago wheat down 5 cents.

This morning’s export sales report showed strong sales for U.S. corn and soybeans while wheat missed expectations. Soybean sales were reported at 1.466 mill tonnes, just above the high end of expectations. China was the largest buying accounting for a third of reported sales while 1/3 went to “unknown destinations”. Corn sales were reported at 659,000 tonnes which was in-line with strong expectations for the week. Wheat sales came in below expectations at just 314,000 tonnes for the week. This was down 15% from the previous four week average.

Outside markets and currencies will be watching the Scottish independence vote today. Scotts will vote whether to separate from the United Kingdom and establish a sovereign state. Results will be tallied late this evening so any volatility will most likely be seen during Friday’s trade session. Most analysts agree that a strong knee-jerk reaction from equities and currencies is likely but the long term impacts should be minimum – regardless of the votes outcome.

Our weather models continue to show temperatures above normal through the end of September. Frost/freeze threat remains very low and will not be a supportive story in the grains for a couple more weeks.

September 17 – Morning Comments

Grains once again experienced a very quiet overnight session with corn down 2 cents, soybeans up 2 cents, and Chicago wheat down ¼ cent.

The Federal Reserve is meeting today to discuss interest rate policies and economic direction. Fed Chairmen Janet Yellen will deliver comments at 2:30 pm central time and is expected to lay the ground work for interest rate increases sometime during 2015. These comments will be closely monitored by equity markets, energies, and most importantly for the grains – the dollar index. The dollar has remained exceptionally strong July only adding pressure to the recent selloff.

Weekly ethanol production numbers will be out today and are once again expected to show strong production across the grain belt. Ethanol production remains very strong seasonally as crush margins are well above $3.00 per bushel at many facilities. Ethanol facilities remain aggressive bidders of spot and new crop corn as this crush margin allows merchants to firm basis levels.

September 16 – Morning Comments

U.S. grain prices are drifting higher this morning with corn up 4 cents, soybeans up 2 cents, and Chicago wheat up 3 cents.

FSA preventive plant numbers were released this morning and have been lending support to the corn and soybean market. Their projection for corn preventive plant acres increased to 1.582 million acres from 1.54 in last month’s report. Soybean prevent plant acres were bumped to 841 million from 827 million last month. Today’s report indicates that the harvested acres projected for corn and soybeans in the September report may be too high considering this survey based report from FSA.

USDA crop conditions were released yesterday afternoon, showing corn and soybean conditions unchanged on the week. 72% of soybeans and 74% of corn remain rated good to excellent. 27% of corn is now mature vs a 5 year average of 39% at this time. 24% of soybeans are dropping leaves verse 32% over the last five years.

Frost/freeze threat remains small for the remainder of September, with Planalytics projecting a warming trend entering the US Grain belt Thursday and into the weekend. Lows should be seasonally warm for the majority of the grain belt.

September 15 – Morning Comments

US grain prices continued to slip lower in Chicago this morning with corn down 2 cents, soybeans off 6 cents, and Chicago wheat down 6 cents.

Light frost was felt across northern IA, central NE, and MN and ND over the weekend. The coldest areas were in the low 30’s which was on par or slightly warmer than most projections from Friday. Damage to immature corn and soybean plots will be very minimal and this frost event has done little to support new crop grain prices in the overnight. The eastern corn belt should see colder than normal temperatures through Friday, when a warming pattern is projected to engulf most of the US grain belt through the remainder of September.

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The USDA will release weekly crop progress and condition ratings this afternoon at 3:00 pm central time. Trade expectations are for corn and soybean conditions to remain at record highs, with 74% of corn and 72% of soybean rated good-excellent. Maturity remains a concern, with last week’s report showing just 15% of US corn mature compared to 26% this week over the last 5 years.

NOPA crush numbers will be out at 11:00 AM central time this morning. Traders expect NOPA to report 111.636 million bushels crushed during August and soybean oil stocks at 1.352 billion pounds. If realized, this would be the smallest monthly stocks figure since February 2015. Even a very tight stocks figure at this time would do little to support soybean prices as most trade focus has turned to 2014/15 production. Today’s NOPA number is from August usage which is the very end of the 2013/14 marketing year.

September 12 – Morning Comments

Grains had a quiet trade in the overnight session on very light news following yesterday’s selling pressure. Corn was up a quarter of a center, soybeans moved 3 cents higher, and Chicago wheat continued lower – off 3 cents.

The national weather service has issued a frost advisory for parts of the Dakotas, Minnesota, Nebraska, and Wisconsin tonight. Commodity Weather group is still reporting that there is a “very low risk of freeze damage” as a result of this frost warning and the low temperatures projected over the weekend. The corn crop is roughly 10% behind in terms of maturity for this week in September. At the moment, the freeze concern remains in the back of trader’s minds but has been unable to help grains find a bottom.

Thursday’s USDA report weighed heavily on futures as yield estimates for corn and soybeans came in above market expectations. The USDA projected U.S. corn yield at 171.7 bushels per acre, 4.1 bushels per acre above their conservative August estimate. Production is now expected at 14.395 billion bushels for 2014/15. Soybeans saw a similar report, with the USDA projecting yield at 46.6 bushels per acre – 0.3 bushels per acre higher than trade estimates. Soybean production is expected at 3.913 billion bushels for the 2014/15 marketing year pushing stocks to use over 13% for the first time since 06/07.

Bears remain in firm control of the U.S. grain market after several technical levels were broken this week. The last hurdle for this crop remains the threat of an early frost/freeze which could creep into the market as early as next week. We continue to feel that downside risk remains in these markets and prices could slip another 10% without much difficulty if yield potential can hold through harvest.

September 11 – Morning Comments

ALERT: USDA REPORT OUT AT 11:00 AM CENTRAL TIME TODAY

In the overnight session corn traded 2 ¼ cents lower to 343 ½ cents sitting right on support that has held over the last week. Soybeans slipped another 3 ¼ cents last night to 990 ¼ cents and wheat fell another 3 cents to 516 ¾ as we enter the morning pause in trade activity.

Big reportable sales come across the news wires this morning, with a combined 450,000 metric tonnes of soybeans being sold to China and Unknown Destinations. 360,000 tonnes of optional-origin soybeans were sold to China.

Export sales were released this morning which seemed to be positive overall, meeting expectations for corn and soybeans and beating expectations for wheat. Last week the marketing year concluded for the 13/14 season and this week marks the first export sales report for the 14/15 marketing year. Wheat export sales were reported at 690,000 metric tons which was well over analyst expectations of between 250,000-450,000 metric tons. Corn sales were recorded at 563,200 metric tons which was within the 450,000-650,000 metric tons expected. Corn also carried over 1,341,400 metric tons of old crop sales into the new marketing year. Soybeans recorded strong export sales of 984,300 MT with china making up 69% of volume sold. Soybeans carried over 1,340,500 metric tons of soybeans from old crop to the 14/15 marketing year.

USDA Report Expectations

  • USDA Report Today at 11:00 AM Central Time.
  • Corn yield expected at 170.74 BPA, soybean yield expected at 46.29 BPA
  • Corn production expected up 250 MB, soybeans up 65 MB

Corn yield will be a focus of today’s report, following a very conservative 167.4 bushel per acre estimate in August. The average analyst is projecting corn yield north of 170 BPA, with many respected analyst looking for even a 173 or 174 figure from the USDA. Early harvest reports have shown exceptional yields across the southern plains and delta, but harvest has not yet reached the key growing states of Iowa, Illinois, and Indiana. Our weather intelligence company, Planalytics, is projecting corn yields to average 168.9 bushel per acre – at the low end of trade estimates.

September 10 – Morning Comments

Going into the morning pause in trade corn was unchanged, soybean was up a penny and wheat fell 3 ¼ cents. Soybeans broke the $10 dollar support level yesterday as early harvest results report strong yields and as the risk of a damaging frost event remains very low. The technically weak soybeans could see more selling pressure today as traders position themselves for the WASDE report on Thursday. Corn is still consolidating near support of $3.43 which held as support last Thursday and which held as support through yesterday’s trade session. Breaking through this price level today could trigger stops and cause a sharp impulse lower in prices.

USDA Report Expectations

  • USDA Report Tomorrow at 11:00 AM Central Time.
  • Corn yield expected at 170.74 BPA, soybean yield expected at 46.29 BPA
  • Corn production expected up 250 MB, soybeans up 65 MB

Corn yield will be a focus of Thursday’s report, following a very conservative 167.4 bushel per acre estimate in August. The average analyst is projecting corn yield north of 170 BPA, with many respected analyst looking for even a 173 or 174 figure from the USDA. Early harvest reports have shown exceptional yields across the southern plains and delta, but harvest has not yet reached the key growing states of Iowa, Illinois, and Indiana. Our weather intelligence company, Planalytics, is projecting corn yields to average 168.9 bushel per acre – at the low end of trade estimates. Please contact our office if you did not receive the full USDA report analysis sent yesterday afternoon.

September 9 – Morning Comments

Corn, wheat and soybeans are trading lower in the overnight with corn down 2 ¾ soybeans down 5 ½ and wheat down 4 ¼ cents as we go into the morning pause. Corn is now cupping back over on the $3.43 ¾ which was the low printed last Thursday.  Keep a close watch on that level to see if it holds as it was a previous low back in June 2010 just before the historic corn rally. Soybeans is also cupping back over toward $10 as selling pressure increases as traders expect higher yield forecasts to be released in the September 11th WASDE report.

Crop Conditions were released yesterday after the market close, further pressuring prices as conditions hold steady at 20 year highs. Corn and soybean conditions were unchanged from last week, with 74% of corn and 72% of soybeans rated good to excellent. 1% of the soybean crop was moved from rated good to excellent. Spring wheat conditions were down 3% on the week, now rated 60% good to excellent. 12% of soybeans are dropping leaves verse a 5 year average of 17%. Corn maturity is also lagging, with just 15% of the corn crop mature. Over the last five years the first week in September has seen 26% of the corn crop mature.

Midwest will be receiving a good amount of precipitation over the next couple days, with some showers interrupting harvest in the Delta over Thursday and Friday. The frost risk for the later part of the week continue to show a chance of light frost in northern Iowa and near the Minnesota/Wisconsin border. The risk for yield damage is very low.

Russia and Iran have entered talks to begin trading grain for oil in the coming months. Russia sits on large wheat stocks and has seen domestic prices fall sharply over the last year. In recent weeks prices have begun to trend higher as exports and domestic usage have been strong. In August the USDA raised their Russian ending stock projection for 2014/15 wheat by 18% from their July estimates.

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