Morning Comments – August 24

Grains continued to weaken overnight and crude oil was off nearly $1 a barrel.

Day 2 of Pro Farmer’s crop tour were in fields in Nebraska and Indiana. The crop tour projected Indiana’s corn yield at 173.42 bushels per acre, up both from last year’s estimate of 142.94 bpa and the three-year crop tour average of 165.11 bpa. USDA said yields in the state would average 187 bpa, up from 150 bpa in 2015.  The crop tour does not estimate soybean yields but projected the amount of soybean pods in a 3-by-3-foot area at 1,178.41 pods, up from 1,093.08 pods last year and the three-year tour average of 1,166.34 pods. USDA estimated soybean yields at 55 bpa, up from 50 bpa in 2015.

The forecast for Nebraska was 158.60 for corn, below 165.16 in 2015. The soy pod count came in at 1,178 vs 1,093 last year.

Yesterday, Egypt’s GASC canceled its tender to buy wheat. GASC did not give a reason for the cancellation. Cairo-based traders said they were surprised by the decision to cancel after hours of negotiations with several suppliers who had presented offers to GASC.

In international pricing, the recent slide in the US wheat price and losses in the US dollar, combined with a move higher in Ukrainian prices has put the US in a better competitive position. Last month, Ukraine wheat prices were $17/MT lower than the US and today’s values are on par with each other.

Crude oil prices continued to slump this week. Industry data from the American Petroleum Institute (API) showed on Tuesday that U.S. crude inventories had risen by 4.5 million barrels in the week ending Aug. 19. Analysts had expected a 455,000-barrel fall. Official EIA data on inventories will be out later this morning, and are expected to show a modest dip, but that was before API data came in surprisingly large.

 

Morning Comments – August 23

Grains were weaker to start the day while crude prices continued to slide in overnight trade.

Pro Farmer’s crop tour concluded day 1 reporting estimates for OH & SD. Corn yields in Ohio were projected to come in roughly unchanged with last year and down from a three-year average after dry field conditions negatively impacted fields in parts of the state. Corn yields in Ohio are projected to be 148.96 bushels per acre, just above 148.37 bpa in 2015 and down from the three-year tour average of 167.37 bpa. USDA pegged Ohio yields at 163 bpa, up from 153 bpa in 2015. For soybeans, the tour estimated the amount of soybean pods in a 3-by-3-foot square in Ohio at an average 1,055.05 pods, down from 1,125.26 last year and the three-year average of 1,250.43 pods.

In South Dakota, corn yield was estimated at 149.78 bushels per acre, below the tour’s three-year average of 160.13. A year ago, scouts on the tour calculated the average South Dakota corn yield at 165.94 bushels per acre. Soybean pod counts in a 3-by-3 foot area were pegged at a statewide average of 970.61. That compares with average pod counts of 1,054.98 in 2015 and the three-year average of 1,043.15.

In overnight news, Egypt’s GASC was tendering for wheat. The lowest offer came from Ukraine for $171 /MT. Stats Canada released new crop estimates, pegging the all wheat crop at 30.49 MMT, up from last month’s forecast and up 10% from last year. Anola output was estimated at 17.02 MMT, off 1.2% from last year

Crude oil prices continued their slide this morning, giving up 50 cents a barrel after yesterday’s steep sell-off of a $1.70 a barrel.

 

Morning Comments – August 22

Grains were lower to start the week as were most of the outside commodity and equity markets.

The Pro Farmer crop tour gets underway today as two teams will traverse across the Midwest to come up with corn and soybean yield forecasts. This year, with USDA’s August forecast so much in question, the PF tour should take on added weight in helping the market determine a true value for yields.

This morning USDA announced the sale of 120,000 MT of new-crop sales to unknown destinations. That marks the 3rd trade day in a row of soybean deals announced by USDA.

In weather, rains return to the Midwest late Tue.-Thu., with the heaviest in C. & SW Iowa/N. Missouri/E. Kansas/far E. Nebraska. The 6-15 day shows rains in W. Midwest corn/soy and threaten pockets of excess rain (main risk in Iowa).

Crude oil prices fell Monday amid fading hope for a unilateral agreement on production cuts from major producers and as traders and money managers cashed in recent profits.The prospect of the OPEC agreeing with other major producers to cut or freeze production in September is now starting to fizzle out with most observers now convinced that there is little chance of a consensus being reached. Any tailwind this may have given to prices over the past week won’t be there in the coming five days.

 

Morning Comments – August 19

Grains were off in overnight trade with soybeans again losing double digits.

Soybeans slid for a second session on Friday as beneficial rain in the U.S. Midwest buoyed expectations of a record U.S. crop this fall. Recent rain in key U.S. growing areas has helped ease concerns about dryness in the Eastern Corn-belt.

Grain millers in Bangladesh are boosting their wheat purchases from Russia and Ukraine as cargoes from key exporter India fade due to a supply squeeze in that country. Bangladesh has booked about 800,000 tonnes of wheat from the Black Sea region for shipment between mid-July and October, up from around 550,000-600,000 tonnes in the same period last year, two trade sources said.

Germany’s Farmers’ Association (DBV) said on Friday that the German 2016 winter wheat crop fell 13% on the year to 22.9 MMT. France also is suffering crop losses this year with forecasts there off 17%.

USDA’s Cattle on Feed Report will be released today at 2 pm CDT. Analysts expect cattle on feed as of Aug 1 at 101.4%, placements in July at 100.5% and marketings in July at 99.7%.

Crude oil prices were lower on Friday after gaining a $1.50 a barrel on Thursday to an eight-week high, capping a rally driven by speculation producers could agree to measures to support crude. Nigeria’s oil minister said on Thursday that while a cut in OPEC production is unlikely, there is hope a meeting of producers in Algeria next month could help shore up crude prices.However, analysts and traders warned the rally was overblown, especially since planned talks between the OPEC and other major producers like Russia to rein in on ballooning overproduction were unlikely to lead to a reduced supply overhang.

 

Morning Comments – August 18

Grains were off in overnight trade while crude oil hit the $47 a barrel mark and the US dollar continued to erode

In overnight news, South Korea’s DongAOne issued an invitation to bid seeking a total of 23,200 tonnes of U.S. origin wheat. The tender came after South Korea found no genetically modified wheat in U.S. wheat imports. Earlier in August the discovery of unapproved GMO wheat in shipments from Washington state prompted Japan and South Korea to suspend some U.S. imports. Japan’s Ministry of Agriculture bought a total of 87,430 tonnes of food quality wheat from the United States, Canada and Australia in a regular tender that closed late on Thursday. This was below their usual volume purchased of 120,000 MT

In Argentina, farmers there are expected to boost corn plantings next season. The Buenos Aires Grain Exchange projects acreage will jump from 3.6 million hectares to 4.5 million hectares.

Yesterday, weekly ethanol numbers were positive as production hit a record high for this time of year with 1.03 million barrels per day of production and stocks were lower from the previous week.

WEEKLY EXPORT SALES

Act-OC

Exp-OC

Act-NC

Exp-NC

Corn

167.4

250-450

1,042

800-1,100

Soybeans

177.9

100-300

1,597

1,500-1,800

Wheat

489.5

400-600

Morning Comments – August 17

Grains were higher overnight again led by soybeans while wheat was in the red for much of the night session. In outside markets, the US dollar was fractionally higher after yesterday’s steep sell-off and crude oil was also lower in limited trade

Wheat continues to struggle with ample domestic and world stockpiles. The US carry-out projections are giving us nearly half of a year’s crop  (47.4%). While international players like France and Germany are having severe crop issues, the rest of the world remains replete in wheat stockpiles. The US dollar has moved 2% lower in the past two weeks which should help bolster US competitiveness in wheat trade.

Soybean prices continue to rally off of their lows from August 2nd, adding nearly 60 cents a bushel in that time frame. Corn, while higher, has found less enthusiasm to the upside only adding 13 cents. Farmers continue to struggle with holding old crop corn inventories to make way for the new crop in the next month. Storage space will surely be at a premium this fall.

Crude oil prices fell in early Asia trade Wednesday, as optimism that major producers would agree to a production freeze agreement ebbed after Iran signaled it has little interest in such a deal. Traders and investors are focusing on the weekly U.S. oil data to be released later today. Estimates by the American Petroleum Institute indicate U.S. crude stocks fell 1 million barrels, but gasoline inventories rose 2.2 million barrels.

Morning Comments – August 16

Grains were mostly higher overnight as soybeans and corn continue to add to recent gains while wheat slipped. In outside markets, the US dollar was sharply lower while crude oil slipped lower from 5-week highs.

On Monday, USDA’s crop progress report showed corn and soybean condition unchanged from last week, with corn pegged at 74% good-to-excellent and soybeans at 72%. Also on Monday, NOPA’s monthly soybean crush report was disappointing showing 143.7 MB of soybeans crushed in July while traders had been looking for 146.7 MB.

In international news, the head of Russia’s grain union expects the wheat crop there to be 69.5 MMT. That would be a lower number than the 72.0 MMT pegged by USDA. Germany’s 2016 wheat harvest will fall 8.8% on the year to 24.21 MMT after crops suffered from bad weather this summer with rain and lack of sunshine, the country’s association of farm cooperatives said on Tuesday. This was down from the 25.4 MMT the association had previously forecast in July with crops in the meantime suffering from persistent harvest-time showers in major German grain belts.

Oil prices remained near five-week highs on Tuesday, fueled by talk of producers taking action to prop up the market, although some investors cashed in during Asian hours on the 16% rally since early August. Asian equity markets rose to one-year highs, expanding their gains this year to 10 percent, supported by a jump in oil prices and investor expectations of an extended phase of easy monetary policy around the globe.

 

Morning Comments – August 15

Grains were higher to start the new week, shrugging off Friday’s bumper crop forecasts by USDA. Crude oil was also higher, trading briefly above $45 for the first time since Jul 21.

Friday’s crop report couldn’t have been much more bearish as both corn and soybean production forecasts came in well above analyst expectations, but traders seemed skeptical of 175 yield on US corn as prices ended up rallying on the news and continue to trade higher today. Export prices for US corn has achieved the low price medal in the world market, which should help keep export business brisk.

Saudi Arabia’s main state wheat buying agency the Saudi Grains Organization (SAGO) said on Monday it has purchased 640,000 tonnes of hard wheat in a tender. A tender for for 600,000 tonnes content had closed on Friday seeking wheat with 12.5 percent protein for October and November shipment. The accepted origins in the tender were the European Union, North America, South America and Australia at the sellers’ option.

NOPA July crush estimates are out later this morning. The report is expected to show a crush of 146.7 million bushels of soybeans in July. That would have been the biggest crush ever for any July. The previous record of 145.227 was set in July 2015. In June, NOPA processors crushed 145.050 million bushels of soybeans. Crush forecasts ranged from 142.643 million to 150.000 million bushels, with a median of 147.500 million bushels.

The NOPA report is scheduled for release on Monday at 11 a.m. CDT

Morning Comments – August 12

Grain markets drifted lower overnight as traders await news from USDA at 11 am CDT this morning about the size of the corn and soybean crop.

Traders are looking for big bumps in the yield and production forecasts relative to USDA’s numbers in July. For corn, traders expect a 170.6 corn yield and a production forecast of 14.76 billion bushels. This would be up from the July forecast of 168.0 and 14.54, respectively. For soybeans, July’s estimates by USDA were 46.7 for yield and 3.88 for production. Traders expect those numbers to grow to 47.5 and 3.94, respectively.

In overnight news, the Taiwan Flour Millers’ Association purchased 85,250 tonnes of milling wheat to be sourced from the United States in a tender which closed on Thursday, European traders said on Friday. The wheat was bought for September/October shipment in two consignments comprising different wheat types, they said.

USDA reported a sale of 258,000 MT of soybeans to China.

Morning Comments – August 11

Grains were higher overnight although continue to struggle with relatively tight, range-bound trade. In outside markets, crude oil dipped below $42.

Traders await Friday’s USDA report, expected to show large production for corn and soybeans. Average analyst estimates are at 170.6 yield for corn and 47.5. Both figures would be well above July yield projections from USDA. However, there is a growing number of analysts that are suggesting the potential for lower yields. Lanworth in a seminar yesterday put their yield forecast at 165.6 and Descartes Labs yesterday released a forecast if 169.0.

In export news, Saudi Arabia’s main state wheat buying agency, the Saudi Grains Organization (SAGO), has issued an international tender to purchase 600,000 tonnes of hard wheat, it said on Thursday. The tender deadline is Aug. 12. The wheat, with 12.5 percent protein content, is sought from global suppliers for shipments in October and November 2016, it said.

Weekly export sales from USDA came in strong with all three crops scoring an above expectation total.

WEEKLY EXPORT SALES

OC-Act

OC-Exp

NC-Act

NC-Exp

Corn

595

200-400

1,015

800-1,100

Soybeans

308

200-400

2,792

1,900-2,500

Wheat

607

350-550

 

World shares hovered close to one-year highs on Thursday as oil prices dropped for a third straight day and the latest interest rate cut in a developed market – this time New Zealand – got a lukewarm response from investors.   The slip in crude markets left energy firms and London’s FTSE backpedaling, though a sharp jump in consumer goods stocks lifted the rest of Europe ahead of what was expected to be a 0.2 percent higher start for Wall Street. Currency markets’ broader focus remained on whether U.S. interest rates will rise this year, with traders looking ahead to speeches by Federal Reserve officials culminating in Fed Chair Janet Yellen’s Aug. 26 address at the Jackson Hole symposium.