Morning Comments – July 28

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.

Morning Commentary – July 27

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.

Morning Commentary – July 24th

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.

 

Morning Commentary- July 23

In the overnight session the grains moved slightly higher with wheat showing the largest rebound, up 5 ¾ cents. Corn is trading unchanged this morning and soybeans is up ¾ of a cent. The U.S. dollar is moving nearly 1/3 of a percent lower and crude oil is up 12 cents per barrel.

Export sales were mostly on the low side of analyst expectations except for wheat which booked 502,800 metric tons this week. Wheat sales were up 73 percent on the week and beat analyst expectations which ranged from 200,000 to 400,000 metric tons. Old crop corn sales recorded 223,400 metric tons which was down 33 percent from the previous week missing analyst expectations which ranged from 250,000 to 450,000 metric tons. Old crop soybeans recorded positive sales this week, adding 80,800 metric tons to the books. Analyst were expecting between 0-150,000 metric tons booked this week.

New crop corn and soybean sales were on the low side of analyst expectations with corn only booking 311,400 metric tons and soybeans booking 241,800 metric tons. As of last week new crop corn and soybeans had booked just over half the sales we typically see during this time of the year. The strong dollar and sharp rally in the grains recently has slowed new crop export demand considerably.

Ethanol production fell 11,000 barrels per day this week to 973,000 BPD. Despite the weekly decline ethanol production continues to 4.6 percent ahead of last year’s pace. This week’s ethanol production was 14,000 barrels per day ahead of last year during the same week, and 101,000 barrels per day ahead of the four year average. Ethanol stocks also declined this week, falling 181,000 barrels to 19.56 million barrels.

Morning Commentary- July 22

In the overnight session the grains traded lower again with corn down 5 ¼ cents, soybeans down 3 cents and wheat down 8 cents. The U.S. dollar is up 1/5th of a percent and crude oil 66 cents lower. Corn is trading just above the 50 percent retracement level at $4.09 from the rally that started June 16th and recently peaked at 4.54 ¼ cents on July 14th. November soybeans is trading around the $10 level with a mild support level around $9.92.

The grains are moving lower this morning with the forecast showing a positive outlook for crop development over the next 10 days. The eastern Midwest which has been getting hit with excessive moisture in the early part of the growing season is expected to receive only limited showers, while the outlook in Iowa and Nebraska is for the weather to turn wetter for the next 10 days. Heat events are expected to be limited with only a few mild events expected over the weekend and early next week. Canada is also expected to receive beneficial rains for their wheat and canola crop.

This morning there was some export activity with NASS reporting 120,000 metric tons of U.S soybeans to be sold to china for new crop delivery. A tender was also issued this morning by South Korea’s corn processing industry association for 55,000 metric tons of corn from either the U.S, Brazil or Argentina. The corn is to be delivered in November and the tender closes on Wednesday.

Morning Commentary- July 21

In the overnight session the grains traded mixed with corn down 2 cents, soybeans up 1 ¾ cents and wheat down 4 ¼ cents. The U.S. Dollar is lower by 1/5th of a percent and crude oil is up 14 cents this morning. This morning the USDA reported 110,000 metric ton sale of U.S. soybeans to unknown destinations.

The crop conditions report was released after the market closed on Monday and showed that corn and soybeans rated good-to-excellent was left unchanged at 69 percent and 62 percent respectively. Corn did show an increase in the excellent column by 2 percent which was offset by a 2 percent decline in the good column.  Analysts were expecting to see corn ratings unchanged and soybeans conditions to decline from last week. In the state crop progress reports both Indiana and Ohio described some of the recently harvested wheat crop as being of very low quality with low test weights, high vomitoxin levels and high moisture content.

Export inspections showed that corn, soybeans and wheat all beat analyst expectations. In the report released on Monday corn showed 1,161,000 metric tons were inspected for export, above expectations which ranged from only 600,000-900,000 metric tons. Soybeans reported 306,000 metric tons compared to expectations of 110,000-215,000 metric tons and wheat reported 489,000 metric tons inspected for export. All three crops showed significant improvement over last week’s inspection numbers.

Egypt’s GASC was offered wheat from Russia, France, Ukraine and Romania in a tender for 55,000-60,000 metric tons of wheat that was issued yesterday. No wheat was offered from the U.S.  and Russian wheat was the most competitive at $193.75 a metric ton.

Morning Commentary- July 20

In the overnight session the grains traded lower with corn down 8 ¾ cents, soybeans down 12 ¾ cents and wheat in Chicago down 10 ¼ cents. The U.S. dollar is trading a fraction of a percent higher and crude oil is unchanged on the day. This morning the Taiwan Flour miller’s Association issued a tender for 104,350 metric tons of wheat to be purchased from the United States.

Crop conditions will be released out at 3 PM CST today, with expectations of corn conditions to be unchanged at 69 percent rated good to excellent and soybean conditions to decline slightly from 62 percent rated good to excellent last week.  Weather looks to clear up for the eastern grain belt for the next 10 days providing some relief from saturated fields which have hindered yield prospects. Temperatures have also moderated throughout the Midwest with highs in the 80’s throughout most of the Midwest today. Another heat event is expected later this week which is expected to be mainly located in Kansas and into the Delta.

New crop corn sales have been behind the average pace for this time of the year. As of last week cumulative outstanding export sales for soybeans delivered in 15/16 totaled to 6,851,276 metric tons, compared to a three year average of 12,034,663 metric tons. New crop corn sales are also behind the average pace with only 3,543,127 metric tons of new crop corn sold, which is only 55 percent of the four year average. The strong dollar and sharp rally in futures prices has many new crop grain buyers sitting on the side line for the time being.

Strategy Grains cut their EU forecast last Thursday after heat and dry weather damaged crop production prospects. Strategy Grains lowered their corn forecast to 66.7 million metric tons down .7 MMT from the June forecast.

Morning Commentary- July 17

In the overnight session the grains traded lower with December corn down 4 ½ cents, November soybeans down 5 ½ and December wheat down 5 ½ cents. The U.S dollar is trading up a fraction of a percent and crude oil is 46 cents lower this morning. Mexico which normally purchases from the U.S reported a purchase yesterday of French wheat cargoes illustrating just how expensive U.S. wheat is on the global market. A few cargoes of Argentinian soybean meal are expected to be delivered to the south eastern poultry markets in the U.S. which puts pressure on domestic prices.

Yesterday, Strategie Grains cut it EU corn and wheat crop forecast as a result of the hot weather that has stressed the crop. Corn production was lowered .8 million metric tons to 66.7 MMT and the wheat crop was cut .7 MMT to 140.9 MMT. The hot temperatures throughout Western Europe will begin to ease going into the weekend, but Eastern Europe is expected to continue seeing high temperatures stress their crop.

China offered 5.33 million metric tons of corn for sale this week from reserves and only sold 65,122 metric tons. Analysts are expecting weekly sales to remain lower throughout the remainder of the year as buyers turn to cheaper imported corn and substitutes until harvest this year.

Morning Comments- July 16th

In the overnight session the grains are trading higher with December corn up 6 3/4 cents, November soybeans up 8 3/4 cents and wheat in Chicago up 4 cents. The U.S dollar is trading up nearly ½ a percent and crude oil is up 26 cents this morning.

Old crop export sales showed weekly declines for both corn and wheat.  In the weekly sales report wheat booked 291,500 metric tons which was a 16% decline from the previous week. Corn sales were a marketing year low, declining 38 percent from the previous week with 331,100 metric tons sold. Soybeans showed positive sales with 45,500 metric tons booked which is expected considering the time of year.  New crop sales were strong for soybeans booking 507,000 metric tons for 15/16 delivery. New crop corn sales were also strong with 325,100 metric tons sold, up from only 149,010 metric tons sold last week.

Yesterday’s ethanol production numbers from the EIA showed production has fallen 3,000 barrels per day week over week to a total of 984,000 barrels per day. Although this was a slight decline from last week it was better than expected and is 41 million barrels per day ahead the same week last year and 106 million barrels per day ahead of the moving average. Ethanol stocks also fell 101,000 barrels to 19.74 million barrels this week.

June NOPA crush numbers were higher than expected with 142.473 million bushels crushed in the month of June. This beat the average guess of 141.478 million bushels and is up substantially from last year’s June crush number of 123.117 mbu. Soyoil stocks were reported at 1.574 billion pounds.

 

Morning Comments – July 15

In the overnight session the grains traded lower with corn down 2 3/4 cents soybeans down 5 3/4 cents and wheat down 7 cents this morning. The U.S dollar is up a 1/4 of a percent and crude oil is down 35 cents this morning. China’s stock market turned lower in the second half of Wednesday’s trading session closing 3 percent lower. China’s selling pressure in the equities could have a negative impact on soybeans this morning.

Weather over the next 8-10 days is looking to provide drier conditions for the corn crop throughout the Midwest providing Missouri and the eastern grain belt a break from the heavy rains that have saturated soils and damaged yield potential throughout the east. With the weather turning positive for crop development, and crop ratings unchanged in the latest crop progress report, the grains may give back some of the recent price gains. Producers should seriously consider some sort of price protection at this juncture. Give the office a call at 877-472-4607 if you have questions about your situation.

The charts are also raising a warning flag for corn in particular. December corn reached a critical resistance level of $4.54 yesterday which was near a previous low set back in January and again in June of 2014. That price level which acted as support in 2014 acted as strong resistance on Tuesday. Furthermore, the 100 period moving average on the weekly chart is currently at $4.40, and could also provide some resistance to any attempted move higher. With the weather turning positive and the charts showing clear resistance around these levels we are concerned that prices could come under pressure over the next few weeks.