November 21 – Morning Comments

In the overnight session corn traded down 1 ½ cents, soybeans traded up 5 ¾ cents and wheat in Chicago traded down 2 ½ cents. Keep in mind that today is the LAST TRADE FOR DECEMBER OPTIONS.

Precipitation is developing over the Delta region which will likely expand to bring moisture to the eastern two thirds of the grain belt throughout the weekend. The 6-10 day forecasts show drier than normal precipitation throughout the majority of the Midwest. North Dakota and Minnesota look to be wetter in the 6-10 day forecast.

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Crop concerns are still minimal in South America other than planting delays in Argentina. Pockets of the country continue to receive precipitation keeping planting pace behind the average pace. About 20% of corn and soybean acres and about 30% of wheat cause some concern about timely planting.

Winter weather in Russia is bringing Rostov on Don water levels to 2.3-2.4 meters, which will stop shipment from that region. This is a shallow draft port with a grain export capacity estimated at 3 million metric tons a year, and typically loads 3,000-5,000 metric ton vessels destined for Mediterranean countries.


November 20 – Morning Comments

Soybean sales lagged expectations providing little support for a continued move higher.

In the overnight session corn increased 2 ¼ cents, soybeans increased 1 ¾ cents and wheat fell 3 cents as we go into the morning pause in trade. Export sales which were released at 7:30 CST caused soybeans to give back most of the gains it had achieved in an overnight bounce.

In this morning’s export sales report, wheat sales fell within market expectations booking 361,700 metric tons, down 13 percent from the previous week. Corn booked 908,700 metric tons, up 80% from last week and beating expectations by a large margin. Expectations for corn sales ranged from 500,000-700,000 metric tons. Soybean sales for 483,000 metric tons disappointed traders with expectations for sales between 700,000-1,000,000 metric tons. Export sales for soybeans fell from the previous week by 55 percent. Soybean Meal sales were strong however with 265,700 metric tons of new sales well over the analyst range of 100,000 metric tons of cancelations to 100,000 tons of new sales.

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Ethanol production numbers showed another week of increased production with 970,000 barrels per day reported on Wednesday. Ethanol production improved 24,000 barrels per day compared to last week. Ethanol stocks declined week over week by 370,000 barrels to 17.34 million barrels.

December corn looks to have found some support at $3.62 which also is the 100 day moving average. Strong ethanol numbers yesterday and exceptionally strong export sales this week should help to support corn in today’s trade. Keep in mind that CIF basis at the Gulf has slipped to the lowest levels in three weeks as farmer sales and declining barge rates pressure basis.

November 19 – Morning Comments

In the overnight session the grains were lower with corn down 2 ¾ cents, soybeans down 9 ¾ cents and wheat down 3 ½ cents.

U.S weather continues to look dry and clear for the next two days to help wrap up harvest, however the delta could receive more rains next week which would further delay corn, soybean and cotton harvest. Wheat should find support from the possible winterkill scenario in the 6-10 day forecast throughout the Plains, however this is still a low confidence event.

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Yesterday, a number of international wheat tenders were announced with Jordan’s state grain buyer issuing a tender for 100,000 metric tons of hard milling wheat, Tunisia issued a tender to buy 92,000 metric tons of milling wheat and Quatar issued a tender for 40,000 metric tons of milling wheat. This morning a tender to purchase 116,400 metric tons of feed wheat was issued by a large animal feed producer from the Philippines. We will see if the U.S wins any of these milling wheat tenders as the U.S dollar hovers near five months highs. A surplus of feed wheat out of Europe which was the result of a wet harvest has traders talking about a shipment of French feed wheat bound for U.S soil. This would be the first time French wheat would be shipped to the U.S in 12 years.


Keep a close watch on the Federal Reserve minutes which will be released at 1 PM CST. The fed minutes will give the market a better look as to how the Federal Reserve will approach weaker inflation, and give the market some clarity as to how the first cycle of rate hikes will begin.


November 18 – Morning Comments

In the overnight session corn traded down 1 ¾ cents, soybeans traded up 1 ¼ cents and wheat fell 4 ½ cents. Yesterday, soybeans saw some strong fundamental data which lifted the price into the close. In the first part of the trade the export inspections number supported prices as 3,113,311 metric tons of soybeans were inspected this week for export. The inspections number was well outside of the 2-2.3 million metric tons analyst were expecting.

Export inspections for corn and wheat were not nearly as impressive. Wheat missed expectations by only recording 139,351 metric tons and corn missed expectations to the low side with only 401,116 metric tons inspected for export.

NOPA crush numbers were released at 11 CST and showed a 58% improvement in crush over last month. According to the National Oilseed Processors Association 157.960 million bushels of soybeans were crushed in the month of October which was well above expectations for only 150.781 million bushels. Soymeal exports increased to 707,934 tons in October from 308,515 tons in September. Following the report, the market was able to rally over 10 cents to break through the 100 day moving average. We feel that the strong NOPA crush numbers are likely to explain why soybeans was able to trade over $10.80 last week, but not provide enough of a case for prices to set new highs in the coming weeks. Although demand is currently quite strong, soybean prices are expensive at these levels and we have a huge soybean crop that is now out of the fields.

In the latest crop progress report the USDA announced that 94% of soybeans were harvested up from 90% last week and corn was 89 percent harvested up from 80% last week. Winter wheat crop conditions maintained 60% good-to-excellent.

November 17 – Morning Comments

In the overnight session the grains traded slightly lower with corn down 2 ¾ cents soybeans down ¼ cent and wheat down 1 ¾ cents going into the morning pause in trade. Exporters reported a sale of 111,095 metric tons of U.S soybeans to China for 14/15 delivery. The U.S Dollar index is trading higher this morning within the range it has been trading since October 6th.

Last week soybeans dropped nearly 30 cents on Friday to close out the week trading at $10.20. The sharp drop in soybean prices late in the week took us back below the 100 day moving average which currently sits at $10.32. Trend line support for the rally that started from October 1st could support soybeans during the early part of the session as traders eye the NOPA crush numbers which is scheduled for release around 11 AM CST. Expectations for the NOPA crush report are to show that soy processors increased production in October crush to $150.781 million bushels according to a poll of market analysts by Reuters.

U.S weather looks clear from precipitation for the most of this week allowing producers to wrap up harvest. Monday will produce some rains on the eastern part of the U.S and on Fridaysome showers are expected in southeastern U.S. but for the most part there should be minimal harvest delays. Rains return to the forecast in the 6-10 day outlook with higher than average precipitation expected in the northern plains and from Illinois east.

Late this week rains are expected to return to the southern part of Brazil providing widespread relief for early corn and soybean development. Minas Gerais will be monitored for too much rain over the next 16-30 days. There is no significant concerns for crops in South America as of yet this growing season.

November 14th, Basis Report

Corn and bean futures prices found strength this week and the cash market added on to the gains with a 2 cent basis increase on average across the US this week.

In corn, ethanol plants were a dominant driver adding 4 cents a bushel as a group as ethanol production continues to accelerate. Weekly ethanol output was at 946,000 barrels per day, a marketing year high, and puts year-to-date output 6.1% ahead of last year’s pace. USDA has only a 0.3% increase expected for annual corn use for ethanol.  Export markets were also up with the Gulf port basis advancing 3 cents a bushel.  Weekly export inspections were at 517,000 MT on par with expectations but a bit slim for this time of year.

By comparison, soybean export inspections continue to set a blistering pace with 2,481,000 MT for the week and cumulative exports at 13.5 MMT compared to 11.8 MMT for the same period last year.  This is 14.4% higher than 2013 while USDA is only factoring in a 4.4% increase year on year. However, basis levels at the Gulf this week were flat with some river terminals in the Upper Midwest seeing lower basis as barge rates there moved higher.  Soy plants were up as a group gaining 3.4 cents a bushel, but some areas of Minnesota and Iowa were weaker with 5 to 10 cent declines being fairly common by plants in this region.

November 14 – Morning Comments

​In the overnight session the market retraced some of yesterday’s gains with corn down 3 ¾, soybeans down 12 ¼ and wheat moving 2 ¾ cents lower. Keep in mind that Monday the 17th the NOPA crush numbers will be released at 7:30 CST. Expectations are for the report to show that soy processors increased crushing pace by 51% percent. The average analyst guess in a Reuter’s poll for October crush was 150.3781 million bushels.
Export sales were released this morning showing wheat booked only 417,700 MT which was on the high side of market expectations of 250-400 thousand metric tons. Wheat sales were up 57 percent week providing some positive demand side news to support the recent run-up in price.

Soybeans reported sales of 1,074 thousand metric tons which was on the low side of expectations which were between 1,100-1,300 thousand metric tons. Soybean sales were down 33 percent from the week prior. Soybean meal which has had a strong export pace this year recorded positive sales of 21,300 metric tons which was up from net cancelations last week.

Corn sales were reported at 505,300 metric tons which was within analyst expectations and up 6 percent week over week.

Weekly ethanol output was at 946,000 barrels per day, a marketing year high, and puts year-to-date output 6.1% ahead of last year’s pace. USDA has only a 0.3% increase expected for annual corn use for ethanol. If realized, this higher pace would trim US corn carryout by 200 to 300 MB.

WEEKLY EXPORT SALES (in thousand metric tons)

Expected Actual YTD/USDA
Corn 400-600 505.4 -15% / -9%
Soybeans 1,100-1,300 1,074 +8% / +4%
Wheat 250-400 417.7 -25%  / -21%





November 13 – Morning Comments

In the overnight session the grains traded only slightly higher with corn up 2 ½ cents, soybeans up 3 ½  but traded as high as 10.58 before selling back down to the lows of yesterday’s range and wheat up ½ a cent consolidating near the highs of yesterday’s range.

Yesterday, January soybeans traded as high as 10.86 ¼, testing that price level twice before turning lower and finishing off the day around $10.47. There has been talk of two soybean meal cargoes being shipped from Argentina to the eastern U.S to meet short term demand which weighed heavily on the soy complex and pressured soybean meal to close the yesterday below $400. Keep a close watch on soybeans this week as volatile price action often times signals that the existing trend is coming to an end. The Monday WASDE report provided very little to support a sustained price rally, showing stocks to use stuck around 12%.

Wheat found strong buying interest yesterday but showed little follow through in the night session. Tensions between Ukraine and Russia continue to escalate which puts at risk trade movement out of those countries. In addition, dry and cold weather continues to be problematic for the Ukraine crop. Nearly a third of Ukrainian winter grain crops sown for the 2015 harvest are under threat and could be damaged by frosts, the state weather forecaster said on Thursday.  These are crops that were sown too late – in the second half of October.  Also, sub-zero temperatures in Colorado and Kansas pose some risk for winter wheat in the U.S.


In corn, basis levels have been mostly steady to inching higher in some areas. Ethanol plants continue to hold basis fairly firm although some areas of the country are stronger than others. A key plant in central Illinois has raised its basis by 20 cents a bushel since harvest lows 30 days ago. Weekly production of ethanol will be released today with expectations of another strong week likely to show output surpassing 900,000 barrels per day.


November 12 – Morning Comments

The grains moved higher in the overnight session, with corn up 3 ½ cents, soybeans up 13 ¾ cents and wheat up 8 cents as we enter the morning pause in trading. Soybeans traded as high as 10.86 ¼ in the overnight session.

Corn continues to be a silent follower to the bean complex but has managed to add over 50 cents from its low at $3.20 in early October. Weekly ethanol production will be released this morning with it likely to show a third-week running of greater than 900,000 barrels per day in production. Since Sept 1, ethanol production has been up 4.2% over the same period last year signaling a potential high corn usage than what USDA has factored in. Current USDA corn usage for ethanol is pegged at 5,150 MB versus last year’s actual usage of 5,134 MB, only a 0.3% yearly increase.

Ukraine’s farm ministry projects that farmers there will sow 6.3 million hectares of winter wheat for the 2015 grain harvest as of Nov. 10, exceeding the original forecast of 6.2 million and last year’s acreage of 6.1 million. Overnight, Russia announced it was in talks with China over possibly supplying grain. The move comes as China pledges to strengthen control over its grain imports to try to cut oversupply.

Domestic weather should remain clear throughout the remainder of the week, but a cold snap throughout the central plains is putting northeast Colorado and the Nebraska panhandle at risk of winterkill this evening. Lows in that region could hit -4 to -11 through tomorrow.

In south America precipitation is expected to favor the northern part of Brazil over the next 11 days while providing little moisture to the southern part. Weather models suggest precipitation is likely to return to southern part of the country in the 16-30 day outlook which should be in time to avoid any serious dryness concerns. Argentina is expected to receive some scattered showers throughout the central and southern part of the country. Broad precipitation in the 11-15 day forecast is expected keep Argentina crop regions with surplus moisture.

November 11 – Morning Comments

In the overnight session corn is up ½ a penny, soybeans are trading 3 ¼ cents higher and wheat is down 1 ¾ cents. Yesterday, the USDA released its November WASDE report which had a slightly more supportive reaction for corn and wheat than it did for soybeans. Corn yield was lowered to 173.4 BPA which was 1.8 BPA below the average analyst guess. Ending stocks for corn were also revised lower than expected to 2,008 million bushels with the average guess expecting 2,135 million bushels.

Soybeans yield was revised higher for the most part within analyst expectations. The WASDE report showed yield had been increased 47.5 BPA which was only .1 BPA shy of the average analyst guess. Demand numbers were revised higher which offset the increase in production. Ending stocks remained the same which triggered selling following the release of the report. U.S wheat ending stocks slipped lower by 10 MB around 16 MB below the average analyst guess.

Tuesday, November 11th the Brazilian Government Conab narrowed their 14/15 soybean production forecast from between 88.8-92.4 million metric tons to between 89.3-91.7 million metric tons. Conab narrowed their corn forecast to 77.3-78.9 from last month’s forecast of between 76.6-79 million metric tons.

Crop progress was released yesterday after the market closed which showed that corn harvest was 80 percent complete, jumping 15 percent over the last week, and finally on par with the average pace over the 5 year average. Soybean harvest showed that the U.S was 90 percent complete with harvest, up only 7 percent from last week and on par with the four year average.

In Argentina, wages for grain inspectors have not kept up with inflation which has triggered a 48 hour long strike starting today. As contract renegotiations are reworked, more strikes in Argentina are to be expected.

This morning, a Reuters story revealed that India has 30.1 million metric tons of wheat in government storage which is twice the official target. The abundance of wheat supplies has improved the chances of additional wheat exports from this region.