Weekly Grain Commentary

Grains were mixed this week with wheat and corn posting modest 2 cent gains while soybeans were off 11 cents.

Harvest has been picking up pace this week although areas of the Western Cornbelt continued to be hit by rains which have slowed progress. The Crop Progress report released on Monday showed that corn harvest for the third week in September is running behind the 5-year average with only 11 percent of the corn crop harvested compared to the average 17 percent. The corn crops good-to-excellent rating held steady this week at 61 percent. Soybean harvest is 10 percent complete compared to the 5-year average of 12 percent. Winter wheat is in line with the 5-year average with 24 percent planted.

Export sales for the week were strong for soybeans which were well above expectations. China and unknown destinations accounting for 2.4 million metric tons of the 2.982 total sales this week. Wheat sales were also strong this week, up 42 percent from last week and on the high side of analyst expectations. Corn sales on the other hand were a disappointment missing expectations with only 320,000 metric tons sold.

Wheat production in Australia will be impacted by the high temperatures and low soil moisture during the spring this year. The conditions across Australia have analysts polled by Reuters estimating a production at 20.015 million metric tons which is below the USDA’s September WASDE report of 22.5 MMT and a long ways from last year’s production of 35.56 million metric tons. Australian wheat prices have been rising and are already above offers being made for U.S. cargoes in Asia which should help North America export sales this marketing year.

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Morning Comments – September 29

In the overnight session the grains traded lower with December corn down ½ a cent, November Soybeans down 3 cents and December Wheat down 1 cent. Weather forecasters are watching the Northwest grain belt for harvest delays early next week.

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The Grain Stocks report will be released today, September 29th at 12 PM. Traders will be focusing on this report as the final carryout number for the 2016-2017 marketing year. With the marketing year complete and last years use set, the remaining stocks will give the clearest picture of 16-17 production. In the last 17 September stocks report, the USDA has revised its crop production estimate in 15 of them which makes this quarters grain stocks more difficult to predict.

Here are the expectations for the Grain Stocks report. In a Reuters poll of analysts the average trade guess for soybean stocks on September 1st is 338 mbu with guesses ranging from 321 mbu to 363 mbu. Analysts are expecting corn stocks to be at 2.353 billion bushels and wheat stocks at 2.205 billion bushels.

Wheat production in Australia will be impacted by the high temperatures and low soil moisture during the spring this year. The hot dry conditions across Australia have analysts polled by Reuters estimating a production at 20.015 million metric tons which is below the USDA’s September WASDE report of 22.5 MMT and a long ways from last years production of 35.56 million metric tons. Australian wheat prices have been rising and are already above offers being made for U.S. cargoes in Asia which should help North America export sales this marketing year.

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Morning Comments – September 28

In the overnight session the grains traded lower with December corn down 1 ½ cents, November Soybeans down 5 ¾ cents and December Wheat down 2 ¼ cents as clear weather throughout the majority of the grain belt will allow harvest to progress uninterrupted over the next 11 days. Precipitation early next week might cause some rain delays in the Northwest but widespread delays are unlikely.

There has been some light showers in parts of Mato Grasso over the last day and rains are expected to expand into the north over the next five days which will help planting which has been delayed recently due to dry weather.

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Ethanol production declined sharply week over week to 996 thousand barrels per day from 1.033 million barrels per day. Despite the decline production was still above last year’s numbers for the same time period. Ethanol stocks also declined this week to 871 million gallons from 888 million gallons last week. Ethanol production will have to run about 1 percent ahead of last years pace to meet the USDA’s corn used for ethanol estimate of 5.475 billion bushels.

The Buenos Aires Grain Exchange released their latest expectations for Argentina’s 2017-18 corn and soybean harvest. Corn production was seen at 41 million metric tons which is just below the 42 MMT estimated by the USDA in the September WASDE report. The exchange pegged Soybean production at 54 million metric tons which was 3 million metric tons below the latest WASDE report. Wheat harvest was seen at 17 million metric tons which was ½ MMT below the USDA’s most recent projections.

Export sales were strong for soybeans which were well above expectations. China and unknown destinations accounting for 2.4 million metric tons of the 2.982 total sales this week. Wheat sales were also strong this week, up 42 percent from last week and on the high side of analyst expectations. Corn sales on the other hand were a disappointment missing expectations with only 320,000 metric tons sold.

Weekly Export Sales-

Actual

Estimated

Wheat

435

250-450

Corn

320

500-800

Soybeans

2,982

1800-2200

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Morning Comments – September 27

In the overnight session the grains traded lower with December corn down 1 ½ cents, November soybeans down 2  ¾ cent and Chicago Wheat down ¾ cents.

On Friday, September 29th the USDA is scheduled to release its Quarterly Grain Stocks report. The average trade guess for corn is for 2.353 billion bushels with the highest analysts forecast at 2.495 billion bushels and the lowest forecast at 2.083 billion bushels. The average trade guess for soybeans is 338 million bushels with analyst forecasts ranging from 363 million bushels to 321 million bushels. The average trade estimate for wheat is 2.205 billion bushels with forecasts ranging from a high of 2.495 billion bushels to a low of 2.083 billion bushels.

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The planting pace for winter wheat is running ahead of pace in both Ukraine and Russia. Russia has reached 64 percent planted on an expected 43.24 million acres and Ukraine is 35 percent planted on an expected 6.17 million acres. Ukraine and Russia are expected to plant the same acreage as last year but some rainy weather throughout certain regions of Russia poses a risk to the crop according to the Agriculture Ministry.

With last years bumper wheat harvest, Russia is widely expected to become the world’s largest wheat exporter this marketing year. Weather conditions are better than last year throughout Ukraine which should continue to support a rapid planting pace.

On Tuesday, the U.S Environmental Protection agency announced it was seeking comment on a proposal that was announced in July to reduce the 2018 biodiesel blending requirements. The agency has expressed concern that the potential decline in biodiesel imports could raise domestic prices in a way that would cause economic harm.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

 

Morning Comments – September 26

In the overnight session the grains traded lower with December corn down ¾ of a cent, November soybeans down 3 ¼ cents and December Chicago wheat up 2 ¾ cents this morning.

Temperatures should cool down in the second half of this week. The recent  warm weather has helped speed along maturity after a cooler than normal late summer had some traders concerned about growing degree days. The corn crop is 51 percent mature according to the Monday crop progress report which is behind the five year average of 64 percent. Precipitation should be limited throughout the Midwest over the next couple weeks which will continue to support harvest work.

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The Crop Progress report released on Monday showed that corn harvest for the third week in September is running behind the five year average with only 11 percent of the corn crop harvested compared to the average 17 percent. The corn crops good-to-excellent rating held steady this week at 61 percent. Soybean harvest is 10 percent complete compared to the five year average of 12 percent. Winter wheat is in line with the five year average with 24 percent planted.

South Africa’s 2017 corn harvest is expected by analysts to be the largest on record at 16.498 million metric tons which is well above last year’s drought impacted production. The Crop Estimates Committee will provide its final production estimates on Thursday the 28th. Currently, the largest South African corn crop was in 1981 and produced 14.656 million metric tons.

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Morning Comments – September 25

The grains traded lower Sunday evening with December corn down 1 ½ cents, November soybeans down 4 ¾ cents and December Chicago wheat down 2 ½ cents this morning. Weather this week looks to be mostly favorable with precipitation in the northern Midwest expected over the next two days and above average temperatures helping the drying process. The recent moisture in the panhandle of Texas has been favorable to winter wheat germination.

Brazilian weather looks to bring moisture to some dry fields into Parana by the weekend with more chances of showers in Northern Brazil. The increased chances of showers should help the planting pace which started mid- September and is lagging behind the normal pace. The forecast for precipitation in Brazil is expecting dryness to return in the 11-15 day period, but expects rains by mid-October.

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The most recent Cattle On Feed report was a bearish surprise to many traders and showed that more cattle were placed in August than expected. August placements were 103 percent of last year compared to the Reuters average trade guess which showed trader expectations averaged around 97.1 percent. All Cattle on Feed was 104 percent of a year ago. Marketings were mostly in line with expectations with the USDA reporting 106 percent of cattle marketed in August compared to the average trade guess of 105.8. The report on Friday was released after the market closed.

Corn imports into China continued to run strong in August with 380,000 metric tons imported. Although imports are down sharply from July, August’s numbers representing a 14 times increase from last year when imports were reduced after China ended the state run stockpile program. Corn in China is mostly used to feed livestock.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

Weekly Commentary

Weekly Futures Commentary-

Grains spent most of the week trying to build a base with choppy two-sided trade most of the featured play. On the week corn lost 4, soybeans lost 5 and wheat gained 9.

Attention is starting to turn to South America where it is a mixed bag on early planting weather. The dryness in Brazil is not an immediate threat but it has slowed the pace of planting which starts mid-September and continues through November. Some areas haven’t received rain in nearly a month and are taking longer than usual to come out of the dry season. Weather forecasters are expecting some precipitation in the 6-15 day forecast but confidence in the likely distribution is low. Although the recent dryness is unlikely to have any impact on the crop, it puts emphasis on receiving more precipitation in October.

Unseasonably warm temperatures continued in a large part of the Midwest, which is helping to finish off crops and dry down corn. The WCB should see heavy rains into early next week which could slow harvest there. But the ECB looks to be dry which should help progress there steam along.

Soybeans have built some momentum going into the weekend as it cleared the $9.78 hurdle with some technician’s eyeing the $9.90 mark as the next upside objective. If reached this would likely be a big selling point for US and Brazil farmers. Soybeans priced in reals to the Brazilian farmer is nearing a 6 week high with a constructive chart structure – this makes them a more willing seller.

This week’s export sales were very strong for soybeans and less impressive for corn and wheat. Soybean sales recorded 2,338,100 metric tons with over half going to China. China importers are beginning to take advantage of the weakness in U.S soybean prices as supplies in Brazil have thinned. Wheat export sales were down three percent from last week and on the low end of analyst expectations with only 307,200 metric tons sold. Corn sales missed expectations with net sales of 526,900 metric tons recorded.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

Morning Comments – September 22

In the overnight session the grains traded higher with December corn up 2 cents, November soybeans up 7 ½ cents and December Chicago wheat up 1 ½ cents this morning. The strong export sales reported yesterday coupled with dryness in both Moto Grosso and Parana are helping to support prices this morning.

The dryness in Brazil is not an immediate threat but it has slowed the pace of planting which starts mid-September and continues through November. Some areas haven’t received rain in nearly a month and are taking longer than usual to come out of the dry season. Weather forecasters are expecting some precipitation in the 6-15 day forecast but confidence in the likely distribution is low. Although the the recent dryness is unlikely to have any impact on the crop, it puts emphasis on receiving more precipitation in October.

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The most recent Seasonal Drought Outlook maps have been updated by the Climate Prediction Center and show that drought is expected to persist throughout North Dakota, South Dakota and Montana. The report also shows persisting dryness expected throughout eastern portions of the Middle Mississippi Valley, Lower Michigan, western Nebraska.

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Morning Comments – September 21

In the overnight session the grains are trading lower with December corn down ½ a cent, November soybeans down 6 ¼ cents and December Chicago wheat down 2 cents. The sharp rally in the U.S dollar following the latest Fed meeting could be pressuring commodities this morning. The Fed’s intention to press forward with another rate increase by the end of the year despite the decline in inflation surprised many and triggered a sharp rally in the U.S dollar index.

EXPORTERS SELL 132,000 METRIC TONS OF SOYBEANS FOR DELIVERY TO CHINA DURING THE 2017/2018 MARKETING YEAR- USDA

According to the EIA report released on Wednesday Ethanol production dipped this week to 1.033 million barrels per day, down 1.3 percent from last week. This weeks production was 5.3 percent above last year during the same period. Production will need to continue running ahead of last years levels in order to meet the USDA 2017-18 forecast of 5.475 billion bushels used for ethanol. Ethanol stocks were mostly unchanged in this week’s report at 888 million gallons.

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This weeks export sales were very strong for soybeans and less impressive for corn and wheat. Soybean sales recorded 2,338,100 metric tons with over half going to China. China importers are beginning to take advantage of the weakness in U.S soybean prices as supplies in Brazil have thinned. Wheat export sales were down three percent from last week and on the low end of analyst expectations with only 307,200 metric tons sold. Corn sales missed expectations with net sales of 526,900 metric tons recorded.

Weekly Export Sales-

Actual

Estimated

Wheat

307

300-500

Corn

527

700-1,000

Soybeans

2,338

1,200-1,500

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

 

Morning Comments – September 20

In the overnight session the grains are trading higher with December corn up 1 ¼ cent, November soybeans up 3 ¼ cents and December Chicago wheat up 2 ¼ cents. Strong precipitation is expected over the weekend throughout southern Minnesota, South Dakota, Nebraska and western Kansas. By Monday the precipitation should extend down into the panhandle of Texas. The eastern grain belt is expected to remain mostly dry over the next couple weeks.

Exporters sell 132,000 MT of soybeans for delivery to China during the 2017/2018 marketing year. Exporters sell 1,080,000 MT of soybeans for delivery to unknown destinations, of which 960,000 MT is for 2017/2018 delivery and 120,000 MT for 2018/2019 delivery. -USDA

Yesterday’s trade action in November soybeans was positive after rebounding 8 ¼ cents off its low of 9.58 ½. Prices are now above Tuesday’s opening price and seems look like it wants to retest the most recent September 14th high of 9.78 ¼.

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The EU announced that they will be lowering Argentina biodiesel anti-dumping duties to between 4.5 to 8.1 percent, down from 22 to 25.7 percent set in 2013. The recent ruling will allow Argentina to begin exporting biodiesel to the EU which is timely considering the U.S sharply increased their countervailing duties in August.

Ukraine’s First Deputy Ag Minister reported that Ukraine corn harvest is expected to be 27 million metric tons compared to 2016’s cropo of 28 million metric tons. The September WASDE report estimated Ukraine’s total corn production at 27.5 million metric tons which was down 1 MMT from their August forecast.

Yesterday it was announced by Egypt’s state grain buyer GASC that they had purchased 175,000 metric tons of Russian Wheat in the tender that was issued on Monday.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)