Morning Comments – August 04

In the overnight session the grains traded higher with corn up 3 1/4 cents, soybeans up 10 1/2 cents and wheat up 3 3/4 cents. The U.S. dollar is down .20 percent this morning with crude oil up 88 cents. Corn and soybeans seemed to find some buying support during yesterday’s session with both grains closing the day in the top half of the day’s trading range. Soybeans had the most dramatic price bar of the day, printing a doji near support indicating a possible change in trend.

Crop conditions were in line with analyst expectations with corn good-to-excellent ratings unchanged on the week at 70 percent. Weather continues to look promising this week with above average precipitation, and cooler than normal temperatures expected across the majority of the grain belt. These conditions will be critical for the soybean development as only 54 percent of the crop is setting pods. Soybean conditions improved this week by 1 percentage point to 63 percent rated good-to-excellent.

There are a two yield related items to pay attention to over the next couple days including the first FC Stone yield estimate for the 2015 corn and soybean crop. FC Stone will be releasing their estimate at 3:30 PM CST today. Informa will also be releasing their monthly crop production estimates on Wednesday.

Export inspections disappointed for wheat on Monday with only 298 thousand metric tons inspected for export, down from 439 thousand metric tons last week and below the range of expectations. Soybeans and corn inspections met expectations with 148 thousand metric tons and 920 thousand metric tons respectively. However, corn’s inspections did decline from last week’s levels of 1.1 million metric tons.

Morning Comments – August 03

In the overnight session the grains traded lower with corn down 5 1/4 cents, soybeans down 8 3/4 cents and wheat down 5 1/4 cents. The U.S. dollar is trading .21 percent higher and crude oil is down nearly a dollar on news that China’s factory activity contracted the most in two years.

The weather forecast continues to look positive for corn and soybeans across the Midwest with cooler than normal conditions expected this week. Rains should be widespread this week covering the eastern grain belt this evening and moving west later this week. The market will be watching the latest crop progress report scheduled for release at 3 PM CST with expectations for mostly unchanged to slightly higher crop conditions.

The latest Planalytics corn yield forecast released on July 31st increased its yield forecast by 1.3 bushels per acre to 166.7 bushels per acre as ideal weather over the past couple weeks helped corn through a critical reproductive phase. Planalytics left soybean yield unchanged at 45.6 bushels per acre with august weather still unknown. August weather will be critical as soybeans continue its pod setting stage and so far weather is positive. Current USDA yield estimates are 46 bushels per acre for soybeans and 166.8 bushels per acre for corn.

This morning Ukraine announced it expects to increase grain exports to 36 million metric tons this marketing year from 34.9 million metric tons in the 14/15 marketing year. In Ukraine, the export pace in July increased 13 percent over last year to 2.5 million metric tons.

Weekly Cash Comments

Cash Commentary-

Cash grain basis was mixed this week with corn basis up 2 cents a bushel, while soybean basis was off 2 cents a bushel.

In corn, basis levels were mostly firmer in Iowa and Nebraska as ethanol plants have bid higher in an interest to get more farmer grain after the recent sell off. In addition, buyers in Indiana and Ohio posted higher basis as futures prices declined and poor new-crop prospects limited farmer movement of old crop supplies.

For beans, a bidding war was brewing in Indiana as major soy crushing plants moved up sharply to attract spot supplies. River terminals also found strength this week as late season export business continues to be unusually brisk for this time of year.

Futures Commentary-

The grains continued their descent this week with September corn falling 30 cents, September wheat falling 25 cents and September soybeans falling 21 ¾ cents. Most of the selling occurred on Monday as markets were ignited from an 8.5 percent decline in China’s stock exchange which seemed to have a ripple effect throughout commodities including the grains.

Crop conditions on Monday showed that corn conditions increased 1 percent, to 70 percent rated good-to-excellent. The market was expecting to see corn 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.

On Thursday, the Spring Wheat tour wrapped up three days of crop scouting throughout North Dakota. Final yield estimates were released on Thursday and estimated a spring wheat yield of 49.9 bushels per acre which is well above the 48.6 bushels per acre last year.

The latest Planalytics corn and soybean yield forecast was released on Friday, which is based on satellite imagery and uses the NDVI index which measures the greenness of the crop. In the latest report, Planalytics revised their corn yield higher by 1.3 bushels per acre to 166.7 BPA. Soybean yield held steady from the previous forecast of 45.6 bushels per acre on July 15th. This forecast is updated every two weeks.

Export sales were strong on Thursday with soybeans and wheat beating analyst expectations. Old crop corn sales booked 364,900 metric tons which was within the analyst expectations and up sharply from last week’s marketing year low. Wheat sales topped expectations by 100,000 metric tons with 699,400 metric tons booked, and Soybeans booked 416,700 metric tons which was well above the 100-200,000 metric tons expected. New crop corn and soybean sales also outperformed with corn booking 443,300 metric tons and soybeans booking 899,100 metric tons. This week’s new crop sales were up substantially from last week.

Ethanol production declined 8,000 barrels per day this week to 965,000 barrels per day. This is the third weekly decline, but production levels are still well above last year and 101,000 barrels per day above the 4 year average. Ethanol stocks increased 89,000 barrels per day to 19.65 million barrels this week.

Throughout this week we have seen some grain buyers in the eastern grain belt lift soybean basis sharply to help draw in any unpriced grain still stored on the farm. Farmer grain sales have slowed in recent weeks as November soybean prices have slid nearly a dollar from their highs. As prices declined, producers have become less willing to price their soybeans at these levels which has triggered processors and elevators to increase soybean basis. Since July 1st we have observed spot soybean basis in Claypool Indiana increase 60 cents to +90X, providing an opportunity for producers in the area who still have unsold grain in the bins. Another grain buyer in Morristown, IN increased spot soybean basis by 15 cents on Wednesday evening to +120X. To see what basis opportunities may be in your area click here and take a 14 day free trial at Grain Hedge.

Morning Comments – July 31

In the overnight session the grains traded mixed with corn up 1 3/4 cents, soybeans down 2 cents and wheat up 5 3/4 cents. Crude oil is trading down 69 cents and the U.S. Dollar has shed nearly 1 percentage point. Soybeans have struggled over the last two days to rise above the 100 day moving average which looms overhead at $9.56. This morning China canceled 200,000 metric tons of old crop soybean sales.

Some reportable sales were announced this morning with 72,136 metric tons of new crop corn sold to Mexico and 36,068 metric tons sold for 16/17 delivery. Exporters also sold 37,250 metric tons of white wheat, 67,650 metric tons of HRW and 22,000 metric tons of spring wheat to unknown destinations for 15/16 delivery. Taiwan’s MFIG group issued a tender to purchase 130,000 metric tons of corn from the United States, Brazil, Argentina or South Africa.

Yesterday, the Spring Wheat tour wrapped up after three days scouting the spring wheat crop in the producing state. Results were released on Thursday and estimated an average yield of 49.9 bushels per acre which is well above the 48.6 bushels per acre last year.

The latest Planalytics corn and soybean yield forecast was released on Friday, which is based on satellite imagery and uses the NDVI index which basically measures the greenness of the crop. Planalytics corn yield was revised higher by 1.3 bushels per acre to 166.7 BPA. Soybean yield held steady from the previous forecast of 45.6 bushels per acre on July 15th. This forecast is updated every two weeks.

Morning Comments – July 30

In the overnight session the grains traded higher with corn up 3 3/4 cents, soybeans up 10 1/4 cents and wheat up 5 1/2 cents this morning. The U.S. dollar is up nearly 1/2 a percent and crude oil is 29 cents higher. A reportable sale of 140,000 metric tons of old crop soybeans was announced this morning.

Export sales were strong this morning with soybeans and wheat beating analyst expectations. Old crop corn sales booked 364,900 metric tons which was within the analyst expectations and up sharply from last week’s marketing year low. Wheat sales topped expectations by 100,000 metric tons with 699,400 metric tons booked, and Soybeans booked 416,700 metric tons which was well above the 100-200,000 metric tons expected. New crop corn and soybean sales also outperformed with corn booking 443,300 metric tons and soybeans booking 899,100 metric tons. This week’s new crop sales were up substantially from last week.

Ethanol production declined 8,000 barrels per day this week to 965,000 barrels per day. This is the third weekly decline, but production levels are still well above last year and 101,000 barrels per day above the 4 year average. Ethanol stocks increased 89,000 barrels per day to 19.65 million barrels this week.

Today the spring wheat tour will be releasing its yield forecast after touring North Dakota since Tuesday. So far reports have been very positive with the first day yield estimate coming in 51.1 bushels per acre compared to 48.3 bushels per acre last year.

Russia’s largest farming region wrapped up harvest with 9.8 million metric tons of grain, an increase of 650,000 metric tons compared to last year. The Russian grain crop is looking relatively healthy with expectations for 100 million metric tons harvested this year, down 5 percent from 2014.

Basis is heating up for end users in the eastern grain belt after weeks of futures price declines. A soybean plant out of Claypool Indiana increased basis another 10 cents to +90X after jumping 10 cents the day before. In Morristown IN, a grain buyer lifted its bid by 15 cents last night to +120X. For producers that still have some old crop in the bins, the futures sell-off has introduced basis opportunity.

Morning Comments – July 29

In the overnight session the grains traded slightly lower with corn down 5 1/4 cents, soybean down 3/4 of a cent and wheat trading down 5 cents this morning as nearly ideal Midwest weather continues to be the focus. December corn is now only 18 cents off the lows it printed on June 15th and 16th. The U.S. dollar is trading a fraction of a percent higher and crude oil is down 43 cents. Asian markets traded higher on Wednesday with Shanghai closing up 3.44 percent.

On Tuesday the U.S. Spring wheat tour began. Scouts are touring North Dakota, the country’s largest spring wheat producer to inspect the crop development. Yields are expected to be very good this year with nearly ideal growing conditions in that region. Currently the USDA has spring wheat conditions pegged at 71 percent rated good-to-excellent across the six major wheat producing states and 84 percent good-to-excellent in North Dakota. A final yield projection is expected to be released on Thursday.

Yesterday, we saw some grain buyers in the eastern grain belt lift soybean basis sharply to help draw in any unpriced grain still stored on the farm. Sales have slowed in recent weeks as November soybean prices have slid nearly a dollar from their highs on July 14th. As prices declined, producers have become less willing to sell their soybeans triggering processors and elevators to increase soybean basis. Since July 1st we have observed spot soybean basis in Claypool Indiana increase 50 cents, providing an opportunity for producers in the area who still have grain in the bins. To see what basis opportunities may be in your area click here and take a 14 day free trial at Grain Hedge. Grain Hedge clients have access to a cash market intelligence platform that allows them to monitor basis opportunities within 200 miles of their farm.

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.