Morning Comments – April 30

In the overnight session the grains moved higher with corn up 1 1/2 cents, soybeans up 6 1/2 cents and wheat up 3 1/4 cents going into this morning’s pause in trade. The dollar index was trading lower most of the night, but has found some buying support underneath the 100 day moving average and is now trading near the open of last night. Crude oil is up 41 cents this morning.

This morning’s export sales report held some surprises particularly for wheat which showed net cancellations for old crop sales. Wheat sales recorded a marketing year low for old crop when it showed 449,200 metric tons of old crop cancellations. New crop wheat sales only totaled to 852,900 metric tons supported by some old crop sales being switched over onto the new crop books. Corn export sales were down 4 percent week over week, booking 832,500 metric tons for old crop delivery. Soybean sales were very strong this week with 433,400 metric tons booked which is a sharp increase from the 102,100 metric tons booked last week. With South America on the downhill side of harvest, it is unexpected to see such a large week of U.S. soybean sales.

Ethanol production fell 9,000 barrels per day last week to 921,000 barrels per day. Ethanol stocks slipped 545,000 barrels to 20.8 million barrels this week as well. Ethanol production has been steadily declining since this year’s production highs in November. Typically, we would expect to see a seasonal increase in production between March and May as we head into driving season, but we have yet to observe a relative increase in ethanol production during this time period. Ethanol production is running 5.2 percent ahead of last year’s pace which is well ahead of the USDA expectations of an increase in production by 1.3 percent.

Morning Comments – April 29

In the overnight session corn was up 2 1/2 cents, soybeans up 1/4 of a cent and wheat increased 3 1/2 cents. A reportable sale was announced yesterday with 390,000 metric tons of new crop soybeans sold to unknown destinations. This morning another reportable sale was announced for 130,000 metric tons of old crop corn to Taiwan.

The U.S dollar is trading lower by over 1/2 a percent this morning after U.S. GDP released worse than expected numbers. GDP fell sharply in the first quarter to .2 percent annually as a result of low crude oil prices and harsh weather conditions slowing spending. This was a sharp decline from last year’s fourth quarter which reported GDP of 2.2 percent annually.

Yesterday’s trade activity was volatile for soybeans and has me questioning whether or not the commodity can continue higher in today’s session. Soybeans started out strong in yesterday’s session, climbing to $9.88 at the high of the day. However, the oilseed was unable to hold onto the gains and losing 7 cents in the last 45 minutes of trading. On the daily chart, soybeans struggled to rise above the 50 day moving average which has acted as strong resistance recently.

The weather looks positive for planting progress throughout the majority of the grain belt for the rest of the week. Showers will continue to delay planting in the Delta with substantial amounts of planting still left to complete in that region.

Morning Comments – April 28

In the overnight session the grains were mixed with corn up 1 1/2 cents, soybeans up 9 1/4 cents and wheat down 2 1/4 cents. First notice day for May grain contracts is Thursday the 30th. Be sure to either liquidate or roll those may contracts by the close of trade on Wednesday.

July Chicago wheat fell through $4.85 support yesterday and continued lower after breaching the level. Precipitation on Monday helped provide moisture to Western Oklahoma, parts of the Panhandle and southwest Kansas. Dry spots have now been limited to 10 percent of the winter wheat area with more precipitation expected in the 6-15 day forecast. Winter wheat conditions were unchanged this week with 42 percent of the crop rated good to excellent.

Crop conditions showed that 19 percent of corn has been planted which is behind the analyst expectations of 23-25 percent and lagging the four year average of 25 percent planted. Soybean progress was reported at 2 percent complete behind the four year average of 4 percent during this time period.

Yesterday, Iowa’s state agriculture department said that they have found “probable new cases” of the bird flu in an estimated 2.3 million birds. There were four probable cases throughout Iowa in Sioux County, Osceola County and two incidents in O’Brien County.

Morning Comments – April 27

In the overnight session the grains traded lower with corn down 2 1/4 cents, soybeans up 1/2 a cent and wheat down 2 cents going into the morning pause in trade. Crude oil is down 28 cents and the U.S. dollar is trading a fraction of a percent higher. Exporters reported 158,000 metric tons of old crop soybeans sold to unknown destinations. Taiwan issued a tender to purchase 65,000 metric tons of corn to be sourced from U.S, Brazil, Argentina or South Africa this morning.

Concerns that the Brazil trucker strike would escalate eased on Monday as the number of strike locations were on the decline. On Thursday evening there were 17 reported strike instances which compare to over 100 instances during the peak of the logistics crises. By Friday the number of strike related blockages on highways had fallen to 11.

More precipitation is expected today in the southern plains providing some relief to parts of Texas and Oklahoma, with chances of more precipitation in the 6-15 day forecast. The past two weeks provided between .5-5 inches of precipitation to the winter wheat fields of the plains, with over half of the region receiving 2 or more inches of rain. The moisture helped avoid serious crop loss, but continued precipitation is necessary to improve the overall condition of the crop. Without moisture in the coming weeks, the trade will begin to focus on the low subsoil moisture levels as a risk factor for the plains wheat.

Crop conditions and planting progress will be released out today with expectations of corn planting to jump from 9 percent complete to nearly 23-25 percent complete. This will be the first week of soybean planting progress and expectations are for around 3-4 percent completed nationwide.

Weekly Cash Comments

Cash Commentary-

Grain basis levels were modestly higher this week with both corn and soybeans posting an anemic 1-cent a bushel gain on average across the US this week.

In corn, it was a quiet week for export basis with the Gulf basis unchanged. River terminals found only modest strength with barge rates slipping a bit from the previous week. For ethanol, production continues to be robust which is keeping plant bids for corn relatively strong. Although basis levels were up on average only about a penny for the week, some plants in IA and MN were posting 5-cent advances for basis.

For soybeans, Gulf bids were modestly weaker with a one-cent decline, but river terminals found added strength, posting a nearly 3-cent gain on the week. Export sales for soybeans continue to be positive and while not as big as early season sales, are significant enough to keep buyers aggressively trying to get beans out of farmer hands. For crushers, it was a pretty quiet week overall, but there was some modest strength in the Eastern Cornbelt with some plants up 5 to 7 cents on the week.

Futures Commentary-

The grains were mostly quiet for the week ending Thursday, April 23rd with corn falling 5 1/2 cents, soybeans rising 12 1/4 cents and wheat jumping 3 1/4 cents. Crop conditions on Monday showed that winter wheat ratings were unchanged. Spring wheat is now 36 percent planted compared to only 17 percent a week ago and a five year average of 19 percent. Corn planting seemed to disappoint analysts by showing only 9 percent had been planted, up from 2 percent last week and behind the five year average of 13 percent.

The avian flu has also been a concern for corn and wheat traders this week after Wisconsin governor declaring a state of emergency over the recent outbreaks. The governor authorized the National Guard to help contain the flu and clean infected sites. The largest of the recent bird flu instance occurred this week at a farm near Harris, Iowa. The bird flu was detected in a flock of 3.8 million hens at an egg laying facility. Following the release of this news, Mexico halted all imports of U.S live birds and eggs from the state of Iowa. Traders are concerned that these incidents will impact the export market and effect grain feed use. Since the beginning of the year the bird flu has been detected in Arkansas, Idaho, Kansas, Minnesota, Missouri, Montana, North Dakota, Oregon, South Dakota, Washington and Wisconsin.

Export sales were very positive this week with corn reporting 867,000 metric tons of sales, an increase of 48 percent from the previous week and well above the 400,000-600,000 metric tons expected by analysts. Corn has booked cumulative sales of 39.5 million metric tons which is behind last year’s pace, but still well ahead of the 37.9 million metric tons needed at this time to meet current USDA expectations. Soybeans booked 102,100 metric tons of export sales which was bullish for the grain. Continued export sales for soybeans show that despite the record harvest in Brazil, demand for U.S. soybeans remains strong. Cumulative soybean sales now total to 48.6 million metric tons, well over last year’s pace and above the pace needed to meet USDA expectations. Wheat sales showed some strength this week booking 397,500 metric tons of sales, above the 0-100,000 metric tons expected by the market and well over the 47,000 reported last week.

On Thursday, the trucker strike in Brazil ignited again after negotiations failed to address the trucker’s main concerns. By Thursday, local authorities counted 17 strike locations. Although it is improbable that the most recent trucker strike will escalate to the level it reached over the last couple months, it is still an issue that deserves close attention in the coming week. The flare up of the trucker strike has some traders worried that a significant disruption in Brazil logistics could result in export sales being pushed onto U.S. books.

The Ethanol production reported a week over week increase of 6,000 barrels per day bringing the total to 930,000 barrels per day. This week ethanol stocks increased 697,000 BPD to 21.34 million BPD.

The International Grains Council raised its global corn stocks forecast by 10 MMT to 951 MMT on Thursday. The council also cut wheat production for the 15/16 crop by 4 million metric ton to 705 million metric tons. Also on Thursday the Argentinian Agricultural Ministry’s announced they expect a record harvest of 59 million metric tons of soybeans harvested this season, up from their previous forecast of 58 million metric tons. The USDA currently pegs Argentina production at 57 MMT, up from 56 MMT in March.

Morning Comments – April 24

In the overnight session the grains traded lower with corn down 2 cents, wheat down 1 3/4 cents and soybeans down 3 3/4 cents. The U.S dollar index is down 1/4 of a percent and crude oil is off 11 cents this morning. This morning a reportable export sale was announced for 121,400 metric tons of old crop corn to unknown destinations.

Yesterday, the Argentinian Agricultural Ministry is anticipating a record 59 million metric ton soybean harvest this growing year, up from their previous forecast of 58 million metric tons.  The increase in production was due to higher than expected yields in certain growing regions.

By Thursday night truckers in Brazil took to the roads to strike again, with local authorities counting 17 strike locations. Truckers began striking again after not adequately addressing their issues in the latest negotiations. Although it is improbable that the latest Brazilian trucker strike will escalate to the level it reached over the last couple months, it is still an issue that deserves close attention over the coming week.

The weather outlook next week is positive for U.S. planting and fieldwork with limited showers expected in the forecast. Planting pace was reported at 9 percent for corn in the last planting progress report, while spring wheat made the largest gains, jumping to 36 percent planted compared to a four year average of 19 percent during the same time period.

Morning Comments – April 23

In the overnight session corn, soybeans and wheat are trading higher with corn up 1 cent, soybeans up 4 3/4 cents and wheat up 3 1/2 cents. The dollar is trading down nearly 1/4 of a percent and crude oil is up 56 cents a barrel.

Export sales were very positive today for the grains with corn, soybeans and wheat either beating analyst expectations or reporting weekly sales on the high side of expectations. Corn reported 867,000 metric tons of sales, an increase of 48 percent from the previous week and well above the 400,000-600,000 metric tons expected by analysts. Corn is still well ahead of the pace needed to meet USDA expectations. Soybeans booked 102,100 metric tons of export sales which was a decline of 67 percent from last week. With the market expecting cancellations however, positive soybean sales are bullish news. Continued export sales show that despite the record harvest in Brazil, demand for U.S. soybeans remains strong. Wheat sales showed some strength this week booking 397,500 metric tons of sales, above the 0-100,000 metric tons expected by the market and well over the 47,000 reported last week.

The Ethanol production reported showed an increase in production last week by 6,000 barrels per day bringing the total to 930,000 barrels per day. This was the first increase reported in three weeks, but despite the trend lower in weekly production since the beginning of the year we are still 5.3 percent ahead of last year’s production levels. Ethanol stocks increased week over week by 697,000 barrels per day to 21.34 million barrels per day.

The International Grains Council raised its forecast for global corn supply by 10 million metric tons to 951 million metric tons this morning. The council also cut wheat production for the 15/16 crop by 4 million metric ton to 705 million metric tons, citing a decline in crop predictions across Argentina, China and India. The international grains council’s global wheat forecast is a substantial decline from last year’s 721 million metric tons.

Morning Comments – April 22

In the overnight session the grains were mixed with corn down 1 3/4 cents, soybeans down 3 3/4 cents and wheat up 1 1/4 cents going into this morning’s pause in trading. The U.S dollar is trading mostly unchanged and crude oil is off .25 percent.

Concerns about the reaction to the bird flu have the corn market nervous that feed use for hens could start to slow. Although the number of birds killed by the flu may not directly affect the feed use in a big way, the reaction by importers could hurt the demand for U.S poultry. Mexico in response to the growing cases of bird flu has stopped all imports of live birds and eggs from the state of Iowa.

Precipitation throughout the Midwest is expected over the weekend and again in the middle of next week. Heavier precipitation in the western grain belt is forecast later in the 11-15 day outlook. The U.S is now 9 percent planted for corn, just behind the four year average of 13 percent at this point of the season. There are no significant planting delays expected in the forecast.  The plains should continue to receive precipitation throughout next week which helps limit the stress on the winter wheat crop.

Morning Comments – April 21

The grains are all trading lower in the overnight with corn down 3 3/4 cents, soybeans down 1 1/4 cents and wheat down 3/4 cents going into the pause. The U.S dollar is trading a fraction of a percent higher and crude oil is mostly flat after consolidating for the last couple days.

Crop conditions were released yesterday which showed that winter wheat rated good-to-excellent remained unchanged at 42 percent compared to last week. All other wheat rating categories stayed the same as well. This week’s crop progress report also highlighted the planting progress for spring crops. The most remarkable number was the amount of spring wheat planted. Spring wheat is now 36 percent planted compared to only 17 percent a week ago and a five year average of 19 percent. Corn planting seemed to disappoint analysts by showing only 9 percent had been planted, up from 2 percent last week and behind the five year average of 13 percent.

The avian flu is in the news lately with the Wisconsin governor declaring a state of emergency over the recent outbreaks in the state. The governor authorized the National Guard to help contain the flu and clean infected sites. Another bird flu instance was recently reported in a 3.8 million chicken flock inside Iowa. The birds were being raised by Sunrise Farms near the city of Harris. Since the beginning of the year the bird flu has been detected in Arkansas, Idaho, Kansas, Minnesota, Missouri, Montana, North Dakota, Oregon, South Dakota, Washington and Wisconsin.

Morning Comments – April 20

In the overnight session corn is down 1 3/4 cents, soybeans are up 4 1/2 cents and wheat in Chicago is up 1 1/2 cents. The U.S dollar is trading nearly .5 percent higher this morning with crude oil down .75 percent. Over the weekend china’s central bank cut the reserve requirement by 100 basis points to 18.5 percent in an attempt to encourage bank lending to help revive economic growth. This is the second industry-wide cut in two months and frees upwards of a trillion yuan of liquidity.

Soybeans traded higher in the overnight session in response to lowered reserve requirement in China. With China importing roughly 60 percent of soybeans traded worldwide, news of increased liquidity and access to capital will impact the price of Soybeans in Chicago.

The plains saw beneficial rains over the weekend which should continue to weigh on wheat prices. More showers are possible on Tuesday and Wednesday and further precipitation is expected in the 6-10 day forecast. The crop conditions will be released today after the close. Analysts are expecting an overall increase in the good-to-excellent rating after widespread rains last weekend helped to lower the risk of crop damage to the winter wheat crop. Last week good to excellent ratings were at 42 percent, down from 44 percent the week earlier. Over the weekend Egypt’s GASC purchased 300,000 metric tons of French, Romanian and Russian wheat.