Jul 31 – Morning Comments

 

Grains were mixed overnight with soybeans and wheat showing modest 1-cent gains, while new-crop Dec corn was off 3 cents a bushel.

In wheat, Japan’s Ministry of Agriculture is seeking to buy 178,212 MT of food wheat from the United States, Canada and Australia via a regular tender closing on Aug. 1. The tender included U.S. western white wheat for the first time since the U.S. Agriculture Department confirmed in late May that an unapproved strain of genetically modified wheat was found growing in Oregon. Egypt’s GASC wheat buying agency announced on Tuesday that they bought wheat from Ukraine and Romania.

best_corn_2013_07_30_sml

For corn and beans, the markets continue to be pressured by good weather prospects in the coming weeks.  Rain showers stretching from Nebraska to northwest Missouri are forecast for late this week and the weekend, boosting moisture in some areas stressed by dry soil during July.  The 12-14 day forecast looks much wetter and that takes out much of the weather risk around beans. As a result, Nov soybeans futures are struggling to hold above $12 a bushel.

In the cash market, basis levels continue to be volatile with some buyers moving basis higher following last week’s collapse.  While the basis slide of over a $1 a bushel  was likely overdone, it seems doubtful that basis levels will approach their highs as buyers try to entice some farmer sales before new-crop deliveries.

 

 

Jul 30 – Morning Comments

Grains found modest support overnight with corn and wheat advancing 3 cents a bushel, and new-crop soybeans up 2 cents a bushel.

USDA’s crop progress report showed no change in the condition of the corn crop, as 63% of the crop was rated as good-to-excellent. Seventy-one percent of the crop had reached the silking stage, not far off from the 5-year average 75%. In the cash market, basis levels stabilized on Monday and even firmed a bit as farmer sales are non-existent after the collapse last week. In international markets, South Korea’s largest animal feed maker Nonghyup Feed Inc. (NOFI) has made an initial purchase of 50,000 MT of corn from the Black Sea region in a tender for up to 140,000 MT.

sign up for a demo

For wheat, export business continues to be favorable. A Taiwan flour miller purchased 97,200 MT of US milling wheat overnight. Egypt’s GASC wheat buying authority also announced a tender for unspecified volumes seeking mid-September shipments.

In soybeans, USDA crop progress figures showed a slight decline in the crop condition score with 63% of the crop rated good-to-excellent versus last week at 64%. Weather over the next few weeks will be critical as the crop reaches its pod filling stage. Temperatures across the primary corn and soybean belts will average below normal for the first half of August.  The southern half of the U.S. will have average close-to-normal temperatures.

Jul 29 – Morning Comments

Grains were mostly weaker overnight with soybeans leading the complex lower, falling 12 cents a bushel.

Good weather and slow demand keeps the soybean market on the defensive. Cool temperatures are expected over much of the Midwest over the next two weeks which will aid the corn and bean crop development. In Brazil, analyst Safras e Mercado said on Friday that the 2013/14 soybean crop that starts planting in September is expected to grow by 7.4% under normal weather conditions to a record 88.17 MMT.

For corn, the collapse in the old-crop basis market at the end of last week has taken its toll on front-month Sep futures hit an all-time low of $4.89 overnight. In international news, South Korea’s largest animal feed maker Nonghyup Feed Inc. (NOFI) has issued an international tender to buy up to 140,000 MT of corn, for arrival in separate consignments by Jan. 15 and Jan. 25, 2014. Tender deadline is Tuesday, July 30.

sign up for a demo

In wheat, Jordan’s state grains buyer has issued an international tender for the purchase of 100,000 MT of wheat. Brazil is also expected to be in the market on an ongoing basis for hard wheat from the US and Canada to help blend with their smaller, soft crop domestically. Government officials there want to keep food inflation in check so imports will likely be a regular feature this year with wheat supplies tight.

Jul 25 – Morning Comments

The meltdown in soybeans continued overnight with front-month August futures falling another 40 cents a bushel, making the total loss after the last two days of carnage at $1.75 a bushel.

China’s decision to allow 3 MB of state-owned soybean stocks to be used domestically to help curb prices, helped start the sell-off. Traders viewed this as a sign that China will unlikely be a significant bean buyer in the near-term, and with fresh US supplies a few months away, the nearly $3 a bushel premium for old-crop supplies versus new-crop seemed to evaporate quickly. In the cash market, many buyers rolled out of August yesterday and into November for pricing, and used that opportunity to cut their basis, with net losses totaling 50 to 75 cents a bushel for the majority of buyers.

stop paying so much to trade

In the corn market, weather continues to look favorable towards the end of the month with the crop reaching pollination. The cool pattern will continue through the next two weeks, with the best chance for a brief warming trend in the south and southwest later next week.  Showers are likely late Thursday in portions of the northwest Midwest, bringing some relief from the dryness with more extensive rain likely in much of the Midwest on Monday and Tuesday with the rains shifting northward next Thursday through Saturday.

WEEKLY EXPORT SALES (thousand metric tons)

  OC Act OC Exp NC Act NC Exp
Corn -28 100-200 515.9 600-800
Soybeans 128.3 0-100 665.2 400-550
Wheat 661.4 400-600    

 

Jul 24 – Morning Comments

 

New-crop grain prices managed a modest recovery overnight after Tuesday’s sharp selloff.

For corn, the weather continues to be relatively favorable for pollination through the end of this month. Temperatures are expected to be in the 70s to low 80s in the Midwest and widespread rain of mostly 0.50 inch up to 1.00 is expected Thursday through Saturday in the Midwest. Another bout of rain of 0.50 inch to 0.75 inch is expected Sunday through Wednesday.  Most of the Midwest will be in good shape moisture wise with the exception of portions of Iowa, Missouri, Kansas, eastern Nebraska and west central Illinois. Soil moisture levels remain low in those areas and they are in need of additional rainfall to ensure good growth of the corn and soybean crops.

best_corn_2013_07_23_sml

In international news, a Taiwanese buyer purchased 23,000 MT of old-crop corn and 12,000 MT of old-crop soybeans from the U.S. overnight. Algeria also was an active buyer of wheat buying 400,000 MT of French wheat.

Crop scouts touring North Dakota say wheat yields in the southern part of the state look to be larger than average and higher than last year, as dry and hot conditions in July helped the crop develop after rain delayed planting throughout much of May. The first day of the tour showed projected yields of 43.3 bushels per acre, based on a survey of 195 fields vs 42.9 a year ago for southern North Dakota.

Jul 23 – Morning Comments

Corn and wheat continued to sink lower in the overnight session, while soybeans bounced back from a 10-cent loss in early trades to end the overnight session in unchanged territory.

Monday’s USDA crop progress report showed deteriorating conditions, with 63% of the crop rated good-to-excellent, off from last week’s reading of 66%. However, the outlook for the next week continues to point to lower than normal temperatures in much of the Midwest and reasonable chances of rain, especially in parched areas of Iowa and Missouri.  For old-crop, basis levels in corn continue to hold mostly steady at record-high levels. Key end-users have been holding their basis at +180U to 190U for the past few days as pipeline supplies continue to be tight

best_corn_2013_07_22_sml

For soybeans, basis levels were off sharply on Monday thanks to higher futures, which gave farmers another shot at selling above $16. Basis levels were off 20 to 40 cents fairly consistently at key markets. New-crop soybeans were rated at 64% good to excellent, down 1% from a week ago.

In wheat, overnight the Taiwan Flour Millers’ Association issued a tender to purchase 97,200 MT of milling wheat to be sourced from the United States. With about two months into the marketing year, wheat export business for the US has been relatively strong. Monday’s USDA export inspections report showed 155 MB shipped so far, compared to only 146MB this time last year.  With crop problems in China and Brazil, this could spell more business for US interests down the road.

Jul 22 – Morning Comments

Corn and wheat drifted lower overnight, while soybeans found modest support.

Weekend weather proved to be near ideal in most parts of the Cornbelt with rains and cooler temperatures helping the corn crop during key times of pollination. More rain is expected early this week and again later in the week. The area of concern about dryness is Iowa, northwest Illinois and far northern Missouri, as these areas aren’t expected to receive much rain. Most of the Midwest will receive from 0.25 inch up to 1.5 inches of rain and high temperatures will fall to the mid-80s, down from the mid-90s last week.

best_corn_2013_07_19_sml

In International markets, tenders were fairly light overnight. Iraq’s state grain board did purchase 50,000 MT of Australian-origin wheat.  Iraq is also expected to tender again in the coming week, in an attempt to boost its domestic volume, although traders expect Black Sea markets to win the business. Russia’s Institute for Agricultural Market Studies (IKAR) increased its July wheat export forecast due to active trading with the country’s clients in North Africa and the Middle East, its chief executive said on Monday.   Russia is likely to export 1.6 MMT of grain, including 1.2 MMT of wheat in July, up from early projections of 1.0 MMT for July wheat exports.

For soybeans, tight old-crop supplies continue to provide a boost to nearby August which broke through the $15 mark overnight. Domestic end users continue to hold firm on record-high basis levels, but with less than two weeks to First Notice day, it seems likely basis levels will start tumbling.

Jul 19 – Basis Volatility Continues

Basis Volatility Continues

Corn and soybean basis continue to show extreme volatility as tight old-crop supplies and prospects of lower prices in a few months keep  end-users scrambling to meet short-term needs. For the week, spot corn basis improved 9 cents a bushel while soybeans were off 4 cents a bushel.

For corn, ethanol plants in the Western and Eastern Cornbelt helped push basis higher over the past week as, on average, all plants increased basis by 12 cents a bushel, although several plants boosted basis by as much as 20 to 30 cents a bushel. At the river, weak exports and stagnate barge rates keep basis levels there mostly in check to slightly weaker. For the week, river terminals lost 4 cents a bushel on average.

spotcorn_2013_07_19

 

 

 

 

 

best_corn_2013_07_18_smlIn soybeans, the upcoming First Notice Day of the nearby August contract is likely to push spot basis levels down sharply over the coming weeks, as happened in mid-June with the expiration of the July futures. Current spot bids for key players continue to trade at +100Q, which suggest a lot of downside risk in the market as it approaches delivery and expiration. For the week, spot soybean basis was off 4 cents a bushel, but much of the weakness was centered on river terminals which lost an average of 15 cents a bushel.

spotsoy_2013_07_19

Jul 19 – Morning Comments

 

Corn came under more pressure overnight, with the new-crop December  contract falling 5 cents a bushel, while soybeans and wheat were up 2-cents in the night trade.

A promising weather outlook for the next two weeks during key pollination keeps corn prices on the defensive.  Cooler temperatures and occasional rainfall over the next week will boost U.S. corn and soybean crop prospects. Temperatures will begin falling this weekend bringing highs below seasonal normal into the 80s to even some 70s F.   Four separate rain events are expected over the next week with the northeast Midwest receiving 0.30 inch to 0.80 inch early in the weekend and a similar amount will fall late Saturday and Sunday in most of the Midwest. Also, from 0.30 inch to 0.80 inch is expected in roughly the southern half of the Midwest Wednesday and Thursday while rain is expected in the southwest Midwest by the end of next week.

best_corn_2013_07_18_sml

In international news, Egypt’s GASC closed their wheat tender on Thursday, buying 300,000 MT of wheat from Ukraine, Russia and Romania, with the US not getting any of the business. South Korea’s largest animal feed maker Nonghyup Feed Inc. (NOFI) has purchased 165,000 of corn likely to be sourced from the Black Sea region and South Africa. They also bought 60,000 MT of feed wheat from the Black Sea.

 

Jul 18 – Morning Comments

Corn and soybean prices were lower overnight, while wheat posted a modest one-cent advance.

Dec corn spent the night below the critical $5 a bushel mark, hitting a 10-day low on an improved weather outlook. Cooler temperatures and rain are expected in the 2nd half of July as the late-planted corn crop reaches pollination during this time period. Rains are expected in Iowa starting this coming weekend which should bring temps down to the mid-80s.

best_corn_2013_07_17_sml

For soybeans, tight old-crop demand continues to underpin nearby prices, while talk of lower acres has helped support new-crop prices. The USDA has estimated that an unusually large 10% of US soybeans will be double cropped this year, equivalent to nearly 8 million acres, of which many analysts believe one million acres may not be seeded thanks to late harvesting wheat crops.

In wheat, Egypt’s GASC announced tenders on Wednesday after the market closed for 120,000 MT of wheat.  Brazil is expected to buy more U.S. hard red winter wheat this week following recent large purchases.   Chinese importers are also negotiating deals to buy at least half-a-million tonnes of Australian wheat for January-March shipment to replace some of its weather-damaged domestic crop. Adverse weather has damaged up to 20 MMT of China’s milling grade crop.

WEEKLY EXPORT SALES (in thousand metric tons)

  OC Act OC Exp NC Act NC Exp
Corn 152.9 0-200 1,590 1,200-1,400
Soybeans 110.6 0-200 591.7 450-650
Wheat 996.6 900-1,200