Grain News

  • Grain Recap 7.19.17

    Market Snapshot:

    Markets are chasing daily weather forecasts.  Tuesday started strong buy faded as mid-day weather runs showed more rain in stressed growing regions.  Tuesday night models took some of the rain chances out so markets worked mildly higher again today.  Minnesota corn conditions dropped slightly again this week, but in line with market expectations nationally.  Bean conditions were slightly lower as well, but since beans are made in August, the market pays slightly less attention to bean conditions in July.  Locally, as more and more corn pushes tassels out, we await a general widespread rain to help the entire territory.  The spotty rains over the area this week have done little to ease the concerns of locals.  Today’s radar looks promising, but seeing is believing.

    On the cash front, the stronger dollar takes us further out of the export market.  Ethanol plants seem to be getting their fill of spot corn and unwilling to push bids, but also not feeling the need to weaken basis further either.  The bean market has started to show some signs of life along with the board working higher.  River bids improved for the second day in a row.  Processing plants joined the fun today, firming nearby bids, yet still showing significant carry to September.

    Consider this…  As the calendar continues to move closer to October and another harvest, logistics will start to play a bigger role in marketing decisions.  Consider locking in a cash price for the grain you plan to ship, but keep the upside open to participate in any rally.  This can be done using a minimum price contract where the cost of a call would be deducted from your cash price.  Which call to chose can vary depending on your risk appetite and overall opinion of the markets.  Many December 17 calls can be purchases for less and a dime, minimizing your cash price hit, but leave the upside open.

    Don’t keep wondering…  ASK A MERCHANDISER!

    How can I take advantage of the carry in the futures market?

    A futures carry is when the nearby futures price is lower than later months.  For example, December 2017 futures are lower in price than July 2018 futures.  Board carries will often fluctuate, starting narrow and working wider as the crop grows.  This means the best way to take advantage of this fluctuation is to lock in new crop HTA contracts with December futures (for corn) and wait for the carry to become more favorable.  As an example, given our current corn carry out scenario, it is reasonable to expect the carry from December 17 futures to July 18 futures to widen to $0.24 or more.  Today that carry stands at $0.205.  So a producer could lock in December 17 futures today at $4.00, wait for the carry to widen and roll to July 18 at $0.24 netting a $4.24 July 18 HTA, before any fees.  Keep in mind basis still needs to be set.  The objective is to allow the basis to improve post-harvest making the net cash price more attractive than selling right out of the field.

    Read Full Market Update

    Aaron D. Ulland
    CHS – Procurement Merchandiser

    Kasson: 507-634-7545 ext 7
    Ostrander: 507-657-2234

    This Material has been prepared by a sales or trading employee or agent of CHS and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS bases its recommendations solely on the judgment of CHS personnel.

  • Grain Recap 7.17.17

    Market Snapshot:

    Last Friday capped a rather tumultuous week for grains with corn and beans both closing slightly higher on the day, yet still suffering double-digit losses for the week.  Today started with mixed results as weather forecasts gyrate from hot and dry to warm with a wetter bias.  Overall, weather continue to drive the market in the near term.  The only other market news is weekly USDA reports like Exports and Crop Conditions.  Weekly export inspections were strong for corn this morning, but this late in the year doesn’t impact the market too much.  Export sales this Thursday are likely to disappoint again as US prices continue to be dramatically higher than our South American counterparts and drive business away from our ports.  NOPA crush numbers today were lower than expected but taken in stride by the market.  As for weekly crop conditions, traders are generally looking for another decline of one to two percentage points, despite the rains received last week.  Declining crop conditions could give the market more friendly headlines to trade but until we see a change in expected USDA yield, we are unlikely to see major price action.  The last government figure was unchanged at 170.7 for corn and 48.0 for beans.  The overall market opinion has a corn yield of 165 – 167 figured into prices.  The bean yield at roughly 47 is the prevailing market opinion.

    Consider this…  Even though prices are well off the highs, and potentially below breakeven cost of production, there are ways to work toward higher prices.  December 2018 futures are still above the $4.00 mark.  November 2018 beans are hovering around $10.00.  The worldwide supply of grain doesn’t necessarily point to higher prices for the 2018 crop.  Consider setting a pricing window for using a Min/Max contract.

     

    Don’t keep wondering…  ASK A MERCHANDISER!

    FUTURES:  Prices for commodities traded on the Chicago Board of Trade

    Futures fixed, or HTA, contracts offer great flexibility for marketing your grain.  Futures and Basis are often inversely related which presents the opportunity to capture attractive futures prices at a time when you believe basis is too wide and will improve before you are ready to deliver.  HTA contracts will generally offer flexible delivery points as well.  If you were to lock in, or set futures with CHS Rochester, you have the flexibility to deliver directly to any of the local CHS elevators or CHS facilities in Winona, Fairmont, Mankato, Savage or the corn plant in Lyle for no additional fee.  If you have on farm storage available, HTAs are also a great tool which allows you to capture board carry and higher futures prices for holding your grain until a later delivery date.

    Read Full Market Update

    CHS – Rochester Grain Team
    Kasson: 507-634-7545 ext 7
    Ostrander: 507-657-2234

    This Material has been prepared by a sales or trading employee or agent of CHS and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS bases its recommendations solely on the judgment of CHS personnel.

  • Grain Update 7.13.17

    Market Snapshot:

    The summer weather market has begun in earnest.  To start July, deteriorating wheat conditions combined with a hot and dry forecast really drove the market to start July.  From the close of 6/29/17, the day before the June acreage and stocks report, to Tuesday 7/11/17, December corn gained $0.34 while November beans rallied $1.18.  The rally came to a swift halt Wednesday as we got the first look at the updated USDA balance sheet incorporating the June acreage changes.  While the market was anticipating a decrease in average corn and bean yields, lowering overall production, the USDA left yields unchanged this month.  Combing that with the increasing crop size in South America, and the world supply of grain and soybeans is becoming overwhelming.  As a result, December corn lost nearly $0.16 and November soybeans dropped nearly $0.09.  Though the market is still expecting yields to drop in forthcoming reports, we are left to trade the numbers as printed today.  Focus is likely to shift back to weather forecasts in the coming days along with lower production levels.

    Something new to consider…  Grain markets can make the most seasoned producer’s head spin.  Marketing your grain is no easy feat in the best of times.  Don’t go it alone and don’t keep wondering.  With the new periodic publication, your CHS Rochester grain team would like to the opportunity to answer your marketing questions.  We are here to help and chances are if one grower has a question, a dozen more have the same question.  Send Jared Schaefer (Jared.Schaefer@chsinc.com) or Aaron Ulland (Aaron.Ulland@chsinc.com) your grain marketing questions and we will do our best to answer your question and walk through any appropriate scenarios to help understand.  I’ll get us stared this week with some basic definitions we commonly use in the world of grain.

    Don’t keep wondering…  ASK A MERCHANDISER!

    FUTURES:  Prices for commodities traded on the Chicago Board of Trade
    CASH: Final price paid to producer
    BASIS:  Difference between Futures price and Cash price

    There are several factors influencing basis.  Every location and grain company will use and interpret the factors differently.  That is why there is not one uniform price for grain.  Some of the biggest factors impacting basis are freight, local margin, supply, demand, competition, and end user bids.

     

    Read Full Market Update

    CHS – Rochester Grain Team
    Kasson: 507-634-7545 ext 7
    Ostrander: 507-657-2234

    This Material has been prepared by a sales or trading employee or agent of CHS and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS bases its recommendations solely on the judgment of CHS personnel.

  • CHS MARKET UPDATE MEETINGS

    CHS will be holding a series of market update meetings in our trade area.  Join us to learn more about current market conditions and special offerings from CHS.

    Click on the meeting date for more information.

    Thursday, June 22, 2017
    St. Charles Moose Lodge #1114

    Monday, June 26, 2017
    Cabela’s, Owatonna

    Wednesday, June 28, 2017
    Wedgewood Cove Golf Club, Albert Lea

    RSVP to any of the meetings at www.chsag.com.

  • Grain Recap 6.2.17

    Not much new or different in the grain markets this week.  Fresh news is generally lacking to provide direction to the market.  On the macro market front, a softer dollar index help support today’s small futures rally.  Respectable export sales report for beans and wheat was also seen lending support to the market.  The funds still hold net short positions, so any reason for nervousness could contribute to slight short-covering as we saw to end this week.

    Planting progress and crop conditions were in line with five year averages, which was slightly surprising to the market.  Near term weather forecasts look favorable to wrap up planting, and even replanting, in most areas.  Some talk has surfaced of dryness concerns in the Dakota’s wheat country.  However, not enough to make too much impact on the market just yet.  Some chatter about the slower start to this year’s growing season has given a slightly more friendly bias to producer price sentiment.  However, the board has done little to help producers make favorable sales on either old or new crop, and basis has done even less.  Corn basis has softened nearby as river markets sort out the impacts of high water and increase freight costs.  Bean basis has also softened slightly from last week’s uptick.  End users are fully aware of the ample supply of grain sitting in the country unpriced and are waiting and expecting to see a flush of grain at wider basis sometime between now and harvest.

    Read Full Market Update

    CHS – Rochester Grain Team
    Kasson: 507-634-7545 ext 7
    Ostrander: 507-657-2234

    This Material has been prepared by a sales or trading employee or agent of CHS and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS bases its recommendations solely on the judgment of CHS personnel.

  • Grain Recap 5.19.17

    A roller coaster of a week in markets, punctuated by weather and geo-political news.  After a huge week and weekend of planting progress, benign weather forecasts could mean less acreage switching from corn to beans.  This sparked a mild rally in beans early in the week while corn mainly held steady in a narrow range.  On Wednesday night, while most of us were dodging thunderstorms, Brazil was just learning of a potential corruption scandal involving the current President.  News of the scandal sharply devalued the Brazilian Real by 7 to 8%, making crops prices much more attractive.  The South American producer which had been holding grain, quickly rewarded the changing currency by selling large volumes of soybeans and corn.  With more grain out of the farmers’ hands, more supply hit the world market.  Brazil’s devalued currency quickly made their product more competitive when compared to US supplies.  This combination put a double whammy on the US farmer, a sharply lower board and lower basis values.

    Locally, basis levels were decidedly mixed.  Bean basis at the river terminals were lower with the newly engaged South American producer.  The domestic processor market, however, was steady to slightly better.  The falling board is more apt to influence the processor market as they work to keep the supply pipeline full.  Corn basis was also mixed.  Terminal values for corn were slightly better, while the ethanol plants tried to weaken, paying pushes only for near-term supplies.  Overall, we still face a huge supply of corn sitting in the country unpriced, which will ultimately push basis values lower.  The only question is, when?

     

    Read Full Market Update

    CHS – Rochester Grain Team
    Kasson: 507-634-7545 ext 7
    Ostrander: 507-657-2234

    This Material has been prepared by a sales or trading employee or agent of CHS and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS bases its recommendations solely on the judgment of CHS personnel.

  • Grain Update 5.5.17

    Weather is the name of the game.  Last weekend saw extremely heavy rains in part of the Eastern Corn Belt and snow in key wheat growing regions.  While wheat was initially the market driver, the corn market quickly responded in kind by moving higher to start the week.  Soybeans were surprisingly resilient moving higher with the corn as well.  As the week wore on, weather forecasts improved with nearly every new model run, putting pressure on the futures.  Late week ran again in the eastern Belt and Delta has once again slowed progress, this time in bean planting.  As the market continues to debate the potential replant or yield damage in the critical “I” states, the weather here in Minnesota looks clear for rapid expansion of planting progress.

    From a basis point of view, we have seen values soften slightly with this week’s uptick in corn.  In general, the end users of corn know there is a vast supply of corn sitting on the farm and in the elevators unsold.  These users know the corn will need to move to market post-planting to make space for the next crop.  With that in mind, there is little reason to expect basis to improve in the short term.  Our sense is that corn basis will stay mostly steady until planting is wrapped up and the crop is out of the ground.  At that point, it is likely we will see basis deteriorate throughout the summer into next fall.

    Bean basis on the other hand is actually seeing some slight improvement in an effort to keep trucks moving to the processors throughout the planting season.  Chances are once the planters get parked, bean basis will fall apart quickly.

     

    Read Full Market Update

    CHS – Rochester Grain Team
    Kasson: 507-634-7545 ext 7
    Ostrander: 507-657-2234

    This Material has been prepared by a sales or trading employee or agent of CHS and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS bases its recommendations solely on the judgment of CHS personnel.

  • Grain Market Recap 4.21.17

    Fundamentally, there has been little to feed the bulls in recent weeks.  Prospective acres were in line with expectations and the monthly supply and demand report confirmed ample stocks of both corn and soybeans.  Only two things are giving anyone in production agriculture any hope: weather and funds.  After the bearish government reports of late, funds have sold futures, increasing their net short position.  The hope is at some point, funds will get nervous and we will see a mild short-covering rally.  Weather is a perennial source of simultaneous hope and despair this time of year.  Here in southern Minnesota we have had plenty of water, slowing our progress while the wheels are turning in other parts of the country.  In very basic terms, the more wide spread the planting delays are, the more optimistic the corn market should be.  However, this week proved that theory inaccurate as weather forecasts still point to cool and wet which should lead to a lower bean bias.  This wasn’t the case as beans actually performed better than corn on the week.

    Read Full Market Update

    CHS – Rochester Grain Team
    Kasson: 507-634-7545 ext 7
    Ostrander: 507-657-2234

    This Material has been prepared by a sales or trading employee or agent of CHS and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS bases its recommendations solely on the judgment of CHS personnel.

  • Grain Update 3.24.17

    Big crops tend to get bigger and eventually fundamentals will kick in to drive price direction.  That was very evident this week as soybeans continued their steep slide lower with old crop contracts losing nearly $0.25 on the week.  Corn was able to separate itself from beans some this week but still lost a dime or more in most contracts.  The South American crop keeps growing and exports continue to slow down.  These two factors alone are enough to put extreme pressure on the soy complex.  In addition, we are faced with the prospective plantings report in just one week.  Anticipation and price-pressure continues to build as pre-report surveys start to come out.  For several weeks the trade has been pricing in 88.0 million acres of beans and roughly 90 million corn acres.  As we get closer to the real report, chatter of 89+ million bean acres is starting to get louder.  If the USDA prints anything larger than 88.0 prices are likely to take another sharp dive lower.  Corn acres at 90.0 million seem manageable and likely.  The biggest question being bantered about now is the total planted acreage.  After the Outlook Conference in February, many analysts have been pointing to nearly four million “missing” acres.  Will the USDA find those acres and for which crop?  We will all be smarter at 11:01 on March 31.

    Prospects of big South American production along with early ideas of huge US bean acres took its toll on new crop bean basis this week.  Discussions about slower than usual soy exports with bigger than usual stocks has end user back peddling to not over pay for beans that are more likely to be forced into the processor market, away from the export channels.

    If interpreting market information seems intimidating or you just want to learn more about marketing your grain, email Aaron (aaron.ulland@chsinc.com) for more details about our Back to Basics: Marketing 101 informational session coming up March 28th.

    Read Full Market Update

    CHS – Rochester Grain Team
    Kasson: 507-634-7545 ext 7
    Ostrander: 507-657-2234

    This Material has been prepared by a sales or trading employee or agent of CHS and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS bases its recommendations solely on the judgment of CHS personnel.

  • Grain Update 3.10.17

    The first full week of March for grain markets was not unlike the recent weather pattern.  Our good times came to a crashing halt leaving us looking for the next glimmer of hope, however dim it might be right now. It seems in the short term fundamental pressures have finally caught up with the futures markets.  When the USDA released the latest Supply & Demand report along with the monthly Crop Production on Thursday, most were expecting a mundane day.  Corn stocks were left unchanged from last month, while US Soybean ending stocks were increased 15 million bushels for the year through a decrease in exports only partially offset by increased crush demand.  While the marketplace has generally been trading 104 to 108 MMT Brazilian bean crop, the USDA is typically slow to respond with world increases.  This month however, the Feds raised their estimate four million metric tonnes confirming the world is awash in soybeans.  Nothing in this week’s reports were seen as bullish news to spur any meaningful rally.  The next key report will come on March 31 with the Prospective Plantings report.

    As futures prices continued their descent this week, back to the lower ends of recent ranges, local basis was seen as dropping as well.  In many instances, as board prices fall, basis will improve as a means to entice producer movement and transfer ownership to the user.  Unfortunately that was not the case this week as bean basis took the biggest hit with the increase in stocks.  Corn basis was mostly steady with some pockets of strength, however with ethanol margins under pressure it is likely that strength with be short lived.

    If interpreting market information seems intimidating or you just want to learn more about marketing your grain, email Aaron (aaron.ulland@chsinc.com) to learn more about our Back to Basics Marketing 101 informational session coming up later in March.

    Read Full Market Update

    CHS – Rochester Grain Team
    Kasson: 507-634-7545 ext 7
    Ostrander: 507-657-2234

    This Material has been prepared by a sales or trading employee or agent of CHS and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS bases its recommendations solely on the judgment of CHS personnel.

© 2017 CHS Inc.