September 17 – Morning Comments

Grains once again experienced a very quiet overnight session with corn down 2 cents, soybeans up 2 cents, and Chicago wheat down ¼ cent.

The Federal Reserve is meeting today to discuss interest rate policies and economic direction. Fed Chairmen Janet Yellen will deliver comments at 2:30 pm central time and is expected to lay the ground work for interest rate increases sometime during 2015. These comments will be closely monitored by equity markets, energies, and most importantly for the grains – the dollar index. The dollar has remained exceptionally strong July only adding pressure to the recent selloff.

Weekly ethanol production numbers will be out today and are once again expected to show strong production across the grain belt. Ethanol production remains very strong seasonally as crush margins are well above $3.00 per bushel at many facilities. Ethanol facilities remain aggressive bidders of spot and new crop corn as this crush margin allows merchants to firm basis levels.

September 16 – Morning Comments

U.S. grain prices are drifting higher this morning with corn up 4 cents, soybeans up 2 cents, and Chicago wheat up 3 cents.

FSA preventive plant numbers were released this morning and have been lending support to the corn and soybean market. Their projection for corn preventive plant acres increased to 1.582 million acres from 1.54 in last month’s report. Soybean prevent plant acres were bumped to 841 million from 827 million last month. Today’s report indicates that the harvested acres projected for corn and soybeans in the September report may be too high considering this survey based report from FSA.

USDA crop conditions were released yesterday afternoon, showing corn and soybean conditions unchanged on the week. 72% of soybeans and 74% of corn remain rated good to excellent. 27% of corn is now mature vs a 5 year average of 39% at this time. 24% of soybeans are dropping leaves verse 32% over the last five years.

Frost/freeze threat remains small for the remainder of September, with Planalytics projecting a warming trend entering the US Grain belt Thursday and into the weekend. Lows should be seasonally warm for the majority of the grain belt.

September 15 – Morning Comments

US grain prices continued to slip lower in Chicago this morning with corn down 2 cents, soybeans off 6 cents, and Chicago wheat down 6 cents.

Light frost was felt across northern IA, central NE, and MN and ND over the weekend. The coldest areas were in the low 30’s which was on par or slightly warmer than most projections from Friday. Damage to immature corn and soybean plots will be very minimal and this frost event has done little to support new crop grain prices in the overnight. The eastern corn belt should see colder than normal temperatures through Friday, when a warming pattern is projected to engulf most of the US grain belt through the remainder of September.

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The USDA will release weekly crop progress and condition ratings this afternoon at 3:00 pm central time. Trade expectations are for corn and soybean conditions to remain at record highs, with 74% of corn and 72% of soybean rated good-excellent. Maturity remains a concern, with last week’s report showing just 15% of US corn mature compared to 26% this week over the last 5 years.

NOPA crush numbers will be out at 11:00 AM central time this morning. Traders expect NOPA to report 111.636 million bushels crushed during August and soybean oil stocks at 1.352 billion pounds. If realized, this would be the smallest monthly stocks figure since February 2015. Even a very tight stocks figure at this time would do little to support soybean prices as most trade focus has turned to 2014/15 production. Today’s NOPA number is from August usage which is the very end of the 2013/14 marketing year.

September 12 – Morning Comments

Grains had a quiet trade in the overnight session on very light news following yesterday’s selling pressure. Corn was up a quarter of a center, soybeans moved 3 cents higher, and Chicago wheat continued lower – off 3 cents.

The national weather service has issued a frost advisory for parts of the Dakotas, Minnesota, Nebraska, and Wisconsin tonight. Commodity Weather group is still reporting that there is a “very low risk of freeze damage” as a result of this frost warning and the low temperatures projected over the weekend. The corn crop is roughly 10% behind in terms of maturity for this week in September. At the moment, the freeze concern remains in the back of trader’s minds but has been unable to help grains find a bottom.

Thursday’s USDA report weighed heavily on futures as yield estimates for corn and soybeans came in above market expectations. The USDA projected U.S. corn yield at 171.7 bushels per acre, 4.1 bushels per acre above their conservative August estimate. Production is now expected at 14.395 billion bushels for 2014/15. Soybeans saw a similar report, with the USDA projecting yield at 46.6 bushels per acre – 0.3 bushels per acre higher than trade estimates. Soybean production is expected at 3.913 billion bushels for the 2014/15 marketing year pushing stocks to use over 13% for the first time since 06/07.

Bears remain in firm control of the U.S. grain market after several technical levels were broken this week. The last hurdle for this crop remains the threat of an early frost/freeze which could creep into the market as early as next week. We continue to feel that downside risk remains in these markets and prices could slip another 10% without much difficulty if yield potential can hold through harvest.

September 11 – Morning Comments

ALERT: USDA REPORT OUT AT 11:00 AM CENTRAL TIME TODAY

In the overnight session corn traded 2 ¼ cents lower to 343 ½ cents sitting right on support that has held over the last week. Soybeans slipped another 3 ¼ cents last night to 990 ¼ cents and wheat fell another 3 cents to 516 ¾ as we enter the morning pause in trade activity.

Big reportable sales come across the news wires this morning, with a combined 450,000 metric tonnes of soybeans being sold to China and Unknown Destinations. 360,000 tonnes of optional-origin soybeans were sold to China.

Export sales were released this morning which seemed to be positive overall, meeting expectations for corn and soybeans and beating expectations for wheat. Last week the marketing year concluded for the 13/14 season and this week marks the first export sales report for the 14/15 marketing year. Wheat export sales were reported at 690,000 metric tons which was well over analyst expectations of between 250,000-450,000 metric tons. Corn sales were recorded at 563,200 metric tons which was within the 450,000-650,000 metric tons expected. Corn also carried over 1,341,400 metric tons of old crop sales into the new marketing year. Soybeans recorded strong export sales of 984,300 MT with china making up 69% of volume sold. Soybeans carried over 1,340,500 metric tons of soybeans from old crop to the 14/15 marketing year.

USDA Report Expectations

  • USDA Report Today at 11:00 AM Central Time.
  • Corn yield expected at 170.74 BPA, soybean yield expected at 46.29 BPA
  • Corn production expected up 250 MB, soybeans up 65 MB

Corn yield will be a focus of today’s report, following a very conservative 167.4 bushel per acre estimate in August. The average analyst is projecting corn yield north of 170 BPA, with many respected analyst looking for even a 173 or 174 figure from the USDA. Early harvest reports have shown exceptional yields across the southern plains and delta, but harvest has not yet reached the key growing states of Iowa, Illinois, and Indiana. Our weather intelligence company, Planalytics, is projecting corn yields to average 168.9 bushel per acre – at the low end of trade estimates.

September 10 – Morning Comments

Going into the morning pause in trade corn was unchanged, soybean was up a penny and wheat fell 3 ¼ cents. Soybeans broke the $10 dollar support level yesterday as early harvest results report strong yields and as the risk of a damaging frost event remains very low. The technically weak soybeans could see more selling pressure today as traders position themselves for the WASDE report on Thursday. Corn is still consolidating near support of $3.43 which held as support last Thursday and which held as support through yesterday’s trade session. Breaking through this price level today could trigger stops and cause a sharp impulse lower in prices.

USDA Report Expectations

  • USDA Report Tomorrow at 11:00 AM Central Time.
  • Corn yield expected at 170.74 BPA, soybean yield expected at 46.29 BPA
  • Corn production expected up 250 MB, soybeans up 65 MB

Corn yield will be a focus of Thursday’s report, following a very conservative 167.4 bushel per acre estimate in August. The average analyst is projecting corn yield north of 170 BPA, with many respected analyst looking for even a 173 or 174 figure from the USDA. Early harvest reports have shown exceptional yields across the southern plains and delta, but harvest has not yet reached the key growing states of Iowa, Illinois, and Indiana. Our weather intelligence company, Planalytics, is projecting corn yields to average 168.9 bushel per acre – at the low end of trade estimates. Please contact our office if you did not receive the full USDA report analysis sent yesterday afternoon.

September 9 – Morning Comments

Corn, wheat and soybeans are trading lower in the overnight with corn down 2 ¾ soybeans down 5 ½ and wheat down 4 ¼ cents as we go into the morning pause. Corn is now cupping back over on the $3.43 ¾ which was the low printed last Thursday.  Keep a close watch on that level to see if it holds as it was a previous low back in June 2010 just before the historic corn rally. Soybeans is also cupping back over toward $10 as selling pressure increases as traders expect higher yield forecasts to be released in the September 11th WASDE report.

Crop Conditions were released yesterday after the market close, further pressuring prices as conditions hold steady at 20 year highs. Corn and soybean conditions were unchanged from last week, with 74% of corn and 72% of soybeans rated good to excellent. 1% of the soybean crop was moved from rated good to excellent. Spring wheat conditions were down 3% on the week, now rated 60% good to excellent. 12% of soybeans are dropping leaves verse a 5 year average of 17%. Corn maturity is also lagging, with just 15% of the corn crop mature. Over the last five years the first week in September has seen 26% of the corn crop mature.

Midwest will be receiving a good amount of precipitation over the next couple days, with some showers interrupting harvest in the Delta over Thursday and Friday. The frost risk for the later part of the week continue to show a chance of light frost in northern Iowa and near the Minnesota/Wisconsin border. The risk for yield damage is very low.

Russia and Iran have entered talks to begin trading grain for oil in the coming months. Russia sits on large wheat stocks and has seen domestic prices fall sharply over the last year. In recent weeks prices have begun to trend higher as exports and domestic usage have been strong. In August the USDA raised their Russian ending stock projection for 2014/15 wheat by 18% from their July estimates.

September 8 – Morning Comments

Grains gave back most of Friday’s gains in the overnight session. Currently corn is down 6, soybeans off 8 and Chicago wheat is down 7 cents. Technical support on December corn sits at 3.46 ¾ while looking at the soybean daily chart, support would not be expected until 10.02.

Russian what prices have rose for the last two weeks following record exports during the month of august. Strong domestic demand and a weakening Russian Rouble have also contributed to prices strengthening. This will be a supportive story moving forward if Russian domestic prices can find a bottom. The U.S. market has been pressured throughout harvest by the price and demand for Black Sea wheat.

By mid-week, some heavy precipitation of about 1-2 inches should develop primarily over Iowa, Southern Minnesota and Wisconsin. Other Midwest states like Michigan, Indiana, Illinois and Missouri should also receive some rain although to a lesser degree expecting between .25-1 inches of rain. The risk of frost damage is still very low this week although the best chance for a frost will be Saturday morning.

Informa Economics released its latest expectations of the USDA crop report forecast last Friday. Their corn expectations are for a yield of 170.3 bushels per acre which compares to their August estimate of 168. Informa’s soybean yield estimate was for 46.1 bushels per acre compared to 44.5 bushels per acre estimated in August.

Spetember 5 – Morning Comments

A slight bounce in the grain market was observed in the overnight session with corn up 2 cents soybeans up 5 ½ cents and wheat up 4 ¼ cents. Kansas City wheat pushed 6 ¼ cents higher and spring wheat was up 6 cents going into the morning pause. The dollar is down slightly in the overnight session after a sharp rally in yesterday’s trade session.

Export sales were very weak for wheat which only recorded 168,800 metric tons which was down 56% from the week before. Old crop corn had net reductions of 7,500 metric tons which was within analyst expectations of -100,000 to +100,000 metric tons. Old crop corn finished off the marketing year on par with the USDA’s August export sales forecast.  New crop corn sales were recorded at 525,000 metric tons which was on the low side of expectations.

Old crop soybean sales saw net reductions of 87,700 metric tons which was within analyst expectations. With this week being the final export sales figure for the 13/14 marketing year, soybeans finished off 35 million bushels ahead of the August export sales estimate. Grain Hedge expects a further revision to the old crop balance sheet to reflect the better than expected old crop export sales pace in the September 11th WASDE report. New crop soybean sales missed analyst expectations to the low side booking 869,000 metric tons with analysts expecting between 900,000 and 1,100,000 metric tons sold this week.

Yesterday’s ethanol production figure once again showed strong corn usage by ethanol facilities for the week. Production averaged 921,000 barrels per day, up 8,000 from the previous week. Ethanol crush margins remain very strong across the grain belt, with margins in Eastern Iowa near $3.19 per bushel. Ethanol prices have climbed 1% percent in the state since July 4th, while cash corn prices have fallen 11%. Ethanol facilities remain aggressive bidders of old and new crop corn.

September 4 – Morning Comments

In the overnight session corn soybeans and wheat all traded lower with corn down ½ a cent, soybeans down 3 and wheat down 3 cents. The dollar index is up sharply this morning now trading at 83.455. Due to the Monday holiday, export sales will be delayed until Friday, September 5th. Ethanol production and stock numbers will be released today.

The USDA reported a 120,000 tonne 2014/15 export sale of corn to unknown destinations this morning.

The dollar is rising sharply this morning after the Central European Bank cut their interest rate to 0.05 percent from 0.15 percent. The rate cut came as a surprise as Mario Draghi announced that the ECB was also cutting their inflation forecast and Eurozone growth forecast. The grains should be further pressured by the sharp rise in the U.S dollar as our competitiveness on the global market hurt. The results out of the latest Egyptian tender were announced yesterday with France and Romania winning the sales.

The GFS weather model still shows a chance of spotty frost across the northwest grain belt next week. With the pace of the crop in Minnesota and North Dakota this could be a trade concern but limited damage is expected. At the moment traders seem more focused on a potential yield revision higher in the September 11th USDA Crop Production report.