Grain News

  • Grain Market Update 9.13.17

    Market Snapshot:

    For those of you who haven’t seen the numbers, Tuesday’s USDA report was surprisingly bearish, yet again.  Yields and production for both corn and soybeans were raised again this month.  Just like last month, the market was expecting a friendly report with lower yields based on less than stellar crop conditions.  Unfortunately, with the market caught leaning the wrong way, we saw a rather dramatic collapse after the report.  At the end of the day, both commodities managed to recover some of the initial loses with corn closing down six and beans down nine.  One of the key points from the report yesterday, the USDA numbers may not be right now but the potential for corn yield to drop dramatically, is diminishing.  Until a new source or huge increase in demand shows up, corn prices are going to struggle.

    Harvest is starting to progress through the corn belt with some local activity reported in isolated areas.  In our trade territory it seems beans are anywhere from 10 days to three weeks away from maturity.  Corn will need all the time it can have to finish.  This week’s heat should help the process immensely.  So far the end users have not shown any signs of being concerned over a late harvest start.  Bean plants are still showing a mild inverse for quick ship bushels, but nothing as dramatic as seen in years past.  The bigger carries are shown from October to November at the river terminals.  If you have the ability to hold beans for even a couple of weeks until corn harvest starts, at this point it appears the market will compensate you for the extra handle.  The ethanol plants are still showing significant carry from spot delivery to October.

      9/12/17 Pre-report range of estimates Previous Estimate Change Market Impact
    Corn Production (bil bu.) 14.184 13.878 – 14.249 14.153 + 31 million BEARISH
    Corn Yield (bu/ac) 169.9 166.7 – 170.9 169.5 + 0.04 BEARISH
    Bean Production (bil bu.) 4.431 4.179 – 4.417 4.307 + 124 million BEARISH
    Bean Yield (bu/ac) 49.9 47.1 – 49.8 49.4 + 0.05 BEARISH

    Read Full Market Update

     

    Aaron D. Ulland

     

    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 9.11.17

    Market Snapshot:

    Mixed trade to start the week.  Corn was fractionally higher while beans settled down two cents.  The market is waiting with bated breath for tomorrow’s USDA monthly Crop Production and Supply & Demand reports.  The market is looking for lower yields in both corn and beans.  Traditionally the September report wouldn’t be considered a major report, however with the surprising yields reported in August, there may be more attention paid to the numbers tomorrow than normal.  Look for sideways trade until the numbers are released.  Post-report, the market will initially trade the number as printed, but it won’t take long for the market to realize we need more concert yield evidence to determine price direction going forward.  With the Corn Belt weather fairly conducive to finishing the crop, we may not have to wait long, combines are already rumored to be running in southern Illinois.  As the rigs, and yield reports, creep north, we will start to have a better handle on what we will have to work with for the next twelve months.

    With harvest in sight, basis values are starting to trend toward new crop values.  In the case of corn, the trend is actually showing slightly firmer nearby bids in some areas.  Beans are showing the opposite, with stronger nearby bids weakening to eventually match new crop values.

    Looking ahead, ProAdvantage contracts will be completed this Friday.  If you haven’t already locked a basis value for those futures, there is still time.  Depending on your cash needs, it may also be beneficial to roll the futures to July of next year while the carry is still at or near $0.26.  This roll can be locked in even before the Friday completion of the ProAdvantage contract.  Give us a call if you would like to set some price or roll targets.  We can also get started with bushels for next year as well.

    Crop Production released 9/12/17 Average Guess Pre-report range of estimates Previous Estimate
    Corn Production (bil bu.) 14.035 13.878 – 14.249 14.153
    Corn Yield (bu/ac) 168.2 166.7 – 170.9 169.5
    Bean Production (bil bu.) 4.328 4.179 – 4.417 4.381
    Bean Yield (bu/ac) 48.8 47.1 – 49.8 49.4

     

    Aaron D. Ulland

    Read Full Market Update

    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 9.1.17

    Market Snapshot:

    Mixed markets to start the new month and new market year.  Corn had a solid performance on Thursday but failed to follow through today.  One year ago yesterday, 8/31/16 was the low for December corn which provided just enough chatter and just enough of a reason for a short-covering rally.  Whether or not the lows from yesterday hold remains to be seen.  There is a long way to go before we get deep into harvest and have a solid feel for production potential.  Beans were able to rally to end the week, closing higher for the third week in a row.  New export sales announced this helped support the market.

    Going forward, the market is still trying to estimate production potential in the US for this year.  Some private analysts have started releasing their yield guesses this week, ahead of the USDA on September 12.  If you remember, the USDA last gave us a 169.5 corn yield but the market has generally been trading something closer to 166 to 167.  The first look this week showed a range of 166.7 to 169.2.  Some are starting to think the Feds might not be too far off which could limit the upside potential on corn.  Bean estimates have also slowly increased with some estimates coming in better than 49 bushels per acre.  While this would probably pressure the markets as well, demand has been steady enough to give the market some hope.

    Further confounding the grain markets are some very early looks at the acreage mix for 2018.  Here in the US one survey shows intended corn acres to be up something close two million acres while bean acres are projected to drop roughly the same.  The first look at South American acreage shows bean acreage will likely drop as well.  Yes, these are very EARLY estimates and are very likely to change between now and then, but they are factors to keep in mind as we evaluate marketing opportunities for both old and new crop.

    Beyond the board, basis values have continued to very slowly improve.  The dramatic drop in futures through the last half of August brought cash selling to a hard stop.  As a result end-users were forced to slowly improve basis to keep grain moving and maintain ownership for production.  Supplies are still are plentiful nearby, keeping a significant carry in the market from old crop to new crop.  This is something to keep in mind for those who still have old crop grain left to unpriced.  With our harvest seemingly two to three weeks behind normal, there could be opportunity to contract old crop grain for early October shipment at new crop prices.  Of course, this opportunity could be short lived, and some nearby bids could even improve enough eliminate that carry.  Be alert and ready to pull the trigger for the right opportunity.

     

    Aaron D. Ulland

    Read Full Market Update

    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 Grain Market Recap 8.30.17

    Market Snapshot:

    Another day lower in grain markets.  Traders and producers alike are waiting and hoping we are nearing a bottom in prices.  With the exception of Hurricane Harvey, a majority of the US growing regions are enjoying benign weather to help crop development.  There is some concern about the lack of heat to help the crops finish maturing in the coming weeks.  However, the market will continue to trade USDA yields until they are proven wrong, which is not likely to happen for more than a month.  A bear market, such as the one we seem to be in, tends to be slow to alter course.

    Consider this… Recently, prices have been trending lower, with little sign of improvement.  The funds have continued to sell commodities with their estimated position thought to be net short.  Looking at charts, it also seems this market is thin, oversold and due for some kind of bounce.  The big question is when and how much.  If you have old crop grain left to sell, consider taking advantage any price strength.  With new crop, there is a case to be made for being patient to see what yields truly develop as we get further into harvest across a broader production area.  At the same time however, any strength in new crop should not be ignored either.  One option would be a minimum price contract, which would set the cash price for your grain but still keep you open to upside.  With this contract, be sure to manage the call and put in a target to exit the option.

    Don’t keep wondering…  ASK A MERCHANDISER!

    Is it better to use a minimum price contract or cash plus at these low prices?

    The best route to take will depend on your personal market bias.  A minimum price contract will be best suited to the producer who might need cash now, but believes we are due for a significant futures rally.    For the producer who feels the market is not going to move much in the foreseeable future, a cash plus contract might be best.  One key with the cash plus contract is to pick an offer price that still makes sense in your marketing plan, and pay attention to which crop year you are working with on the firm offer.    Also keep in mind with the cash plus, you need to hold bushels off the market until you know for sure if the offer will fill.

    Aaron D. Ulland

    Read Full Market Update

    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 Grain Market Recap 8.28.17

    Market Snapshot:

    Farm Journal Midwest Crop tour completed last week failed to provide the friendly market input producers were hoping to see.  It seems many producers throughout the Midwest have gotten stung by backyard syndrome, confident their crop was no where as good as the USDA was predicting and even more confident the croup tour would verify this opinion.  Unfortunately, the Crop Tour seemed to verify the current USDA opinion, pressuring markets to life-of-contract lows.  When it was all said and done, the Farm Journal Midwest Crop Tour came out with an estimated national corn yield of 167.1, roughly two bushels per acre better than the USDA, but also roughly two bushels per acre above the implied market consensus.  The Tour average bean yield came in at 48.5 bushels per acre, below the USDA.  The corn market didn’t take the results well and have traded lower for 8 of the last 10 sessions.  As for beans, the market seemed to take the information in stride.  In broad terms, the market is not confident in bean yield estimates this time of year, especially in light of the unseasonably cool weather we have seen recently.  One of the recurring themes last week throughout the Tour was lower pod counts in many areas.  Anecdotal evidence in our neck of the woods seems to verify lower pod counts along with the need for heat to help fill out the beans before harvest.

    On the basis front, most markets have softened corn basis.  The ethanol plants are able to source ample supplies simply by keeping the doors open.  Each day that goes by puts us one day closer to new crop and a potential space crunch.  Bean basis has improved in recent days, particularly at the processor level.  The steady demand for beans to be crushed for meal and oil is supportive to basis in the short term.  The bid structure is very quick-ship oriented with inverted markets to new crop.  The new crop basis values for both corn and beans have been mostly steady.

    Consider this… Before we get fully engulfed with harvesting this year’s crop, take some time to start thinking about next fall.  An easy way to take some of the emotion out of marketing your grain is to commit a portion of your production to CHS ProAdvantage.  Sign up for the program is coming up quick.  Don’t miss out on the opportunity while you are in the field, give us a call to walk through the ProAdvantage program details and get started.

    Aaron D. Ulland

    Read Full Market Update

    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 8.21.17

    Market Snapshot:

    Rain makes grain.  As simplistic as that sounds, that is the operating assumption futures traders right now.  Rainfall has been better than anticipated throughout  much of the Midwest over the past several days, leading to a substantially bearish mentality across the board.  While the rains have been good, the heat units are still lacking, but that is not yet being factored into prices.  Nearby September corn hit a new contract low today of $3.4650 before bouncing back ever so slightly.  Weekly crop progress report showed corn unchanged at 62% in the good and excellent categories.  Soybean conditions improved one point in the good and excellent categories this week.  Combined, this is likely to pressure both commodities more in the coming trade sessions.

    This week marks the annual Farm Journal Midwest Crop Tour (formerly Pro Farmer.)  The market is hoping to hear lower yield reports come out throughout the week to at least slow the commodity sell off.   Snap shots from day one results, while less than impressive, were quite variable and failed to impact the markets much to start the week.

    Consider this… The falling board prices have helped widen the board carries to more attractive levels.  In other words, the market is telling us to there is no supply concerns and we should continue to hold our grain.  Now is the time to set targets for rolling new crop futures to next spring or summer for later shipment and capture those carries.  But what about those producers without on farm storage?  Take a look at the cash price for new crop versus next spring or summer.  Depending on the location there is a good chance the cash carry from new crop to April, for example, is more than enough to cover storage charges.  This is a good opportunity to consider your breakeven prices and cash needs to determine the right time and price to sell grain.  Even if the April, or spring price, isn’t quite where you need to be today, put in a sell offer so if the market turns around, your offer is ready.

     

    Read Full Market Update

    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 8.14.17

    Market Snapshot:

    Two days post-report and not much has changed.  Traders are still digesting the USDA figures released Thursday, still expecting to see lower yields in forthcoming reports.  Corn has managed to squeak out two days of higher closes since the USDA shocker, but we are still well off recent highs leading many to question if we are simply establishing a new, lower range in which to trade corn futures.  Soybeans were lower again today, but the late day surge lends some hope for a pause in the descent.  Beans closing nearly the same as the daily open, leaves the door open to a technical indicator pointing to a change in direction.  Non-threatening weather throughout the Midwest will likely limit any significant gains in the short term since minimal heat stress combined with timely rains is seen as generally positive to crop production.  However, not all parts of the Corn Belt has fared the same and traders continue to look for perfect weather.  This week’s crop condition ratings are expected to be unchanged to slightly lower on corn.  Look for beans to be unchanged to slightly better.  The biggest question on everyone’s mind is where do we go for now.  At this point it is a difficult to see any major directional change until we have a better handle on yields, 30 to 45 days out.

    On the basis front, the collapsing board has had a small positive impact on basis values.  Granted, the basis appreciation has paled in comparison to the falling board, but depending your market bias, this could be an opportunity to set basis on unpriced grain.  End users have been sitting back waiting for grain to naturally move to the market, however the pipeline is never as full as it seems.  The cash carry from old crop to new crop is slowing the movement of old crop grain just enough to force a slight improvement in nearby basis.  Don’t expect this trend to continue for long.

    Consider this…  Despite Thursday’s USDA report being bearish futures, it was friendly to futures spreads.  New crop spreads have widened out to the widest point seen to date.  In corn for example, the December 17 to July 18 spread has gone from  $0.2250 to $0.2425 in just over two sessions.  This is a good time to consider setting spread orders for any new crop HTAs that you will be carrying through to next spring or summer, rather than shipping this fall.  Remember, by spreading or rolling HTA contracts forward, you can capture the carry in board price and wait for any potential basis improvement as well.

     

    Aaron Ulland

    Read Full Market Update

    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 8.11.17

    Market Snapshot:

    This week started out with optimism in the grain markets.  Rains were disappointing over the weekend and traders were looking forward to friendly reports from the USDA on Thursday.  All that came to a screeching halt on Thursday with the USDA data.  Within a matter of seconds, moderately higher markets turned sharply lower.  A summary of the key data is below.  The biggest surprise of the day came in the bean market.  Thursday reports showed the estimated bean yield INCREASING from the July estimate of 48.0 bushels per acre to 49.4 bushels per acre.  This alone was enough to briefly drive prices nearly $0.35 lower before settling down $0.33 on the day.  Corn yield also surprised the market with a smaller than expected 1.2 bushel per acre reduction.  Even with the lower yield, the USDA still anticipates a 14.1 billion bushel crop for the coming year, enough to keep yearly carryout over 2 billion bushels once again.

    Now that corn prices are the lowest we have seen since September 2016, beans are the lowest since June of this year, the big question is, what next?    The trade still believes yields are over stated in corn and it is reasonable to expect yields to decrease in the coming reports the USDA gets more first hand yield estimates.  Soybean yields are considered suspect as well because most believe it is difficult to predict bean yields this early in August.  So, until we see lower printed yields, we have to trade the current numbers as printed, believe them or not.  That being said, the sell off on Thursday did some serious technical damage to the charts, implying a meaningful recovery is not imminent.  Not impossible, but not immediate either.

      8/10/17 Pre-report range of estimates Previous Estimate Change Market Impact
    Corn Production 14.153 13.590—14.070 14.255 -0.102 BEARISH
    Corn Yield 169.5 162.8—168.5 170.7 -1.2 BEARISH
    Bean Production 4.381 4.165— 4.307 4.260 +0.121 BEARISH
    Bean Yield 49.40 46.9— 48.0 48.0 +1.4 BEARISH

    Aaron Ulland

    Read Full Market Update

    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 8.7.17

    Market Snapshot:

    A dry weekend starts grain markets off the right foot to start the week.  Rain had been anticipated throughout parts of the upper Midwest, but failed to develop especially in Iowa where it is considered to be most stressed.  As a result futures gapped higher Sunday night and held on to gains throughout the day.  Export inspections released this morning showed better the expected corn loadings and soybeans were respectable as well.

    Weekly crop conditions capped off the day with slightly lower corn ratings and slightly improved beans ratings.  Both corn and beans were expected to be unchanged this week, but the corn slipped one percentage point while beans gained one percentage point.  Seasonally corn does start to slide in weekly condition ratings, but look for this to be viewed slightly friendly when we reopen tonight.  The improved bean conditions on the other hand, are likely to be viewed as slightly negative.

    Consider this…  The calendar is quickly moving toward new crop once again.  Corn prices have been less than exciting all summer long leaving a lot of unpriced grain sitting in bins on the farm.  Recent producer sales have been very slow which has helped basis levels firm slightly over the past week.  Now might be a good time to consider a Cash Plus contract.  One example would be to sell nearby cash and add a Cash Plus for next July, adding $0.16 to old crop sale with a firm offer to sell if the July 18 futures are above $4.40 on 6/22/18.  Call your Aaron or Jared for more information.

    Don’t keep wondering…  ASK A MERCHANDISER!
    How can I watch the market and sell at my price when it is constantly changing?  Continued…

    Grain prices are always changing.  We can help keep you informed throughout the day with market updates and changes.  We have the ability to keep you updated with market updates via text messages three times per day.  We also send out a bid sheet daily with all the CHS Rochester locations cash bids along with basis and futures values.  If you would like to learn more, or get signed up for bid text or emails, call Aaron or Jared to get started.

     

    Aaron Ulland

    Read Full Market Update

    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 8.2.17

    Market Snapshot:

    Dry forecasts for the western growing regions helped the market stay in the green after the washout that took place Tuesday.  General consensus is crops are in good condition for an average or better crop, but market traders want perfect growing conditions and confirmation of yield potential.  Speaking of yield potentials, the USDA will issue its projections next week in the monthly reports, but we are already starting to get a glimpse of what private forecasters are estimating.  Most analysts feel a corn yield of 165 is priced into the market.  However these early guesses are starting to lower expectations to around 162 to 164 bpa.  The bean yield is still much more uncertain with guesses ranging from 46 to 48 bpa.

    Local basis values have started to show signs of improvement in the past few days.  The most improvement have been seen at the terminal lever, however some corn and bean processors are also showing signs of strength.

    Consider this…  In the best of times grain marketing can become very emotional trying to pick the right price point or even trying to determine the right amount to sell.  We can even get struck with “Backyard Syndrome”  when the greater marketplace is telling us something different about the crop.  Consider taking the emotion out of your marketing and diversifying your sales.  The CHS Pro Advantage contract does just that.  Commit a portion of your bushels to the program and let CHS manage the futures pricing for you.  Give us a call for more information.

     

    Don’t keep wondering…  ASK A MERCHANDISER!
    How can I watch the market and sell at my price when it is constantly changing?

    Catching the right moment to sell your grain at your price is always a challenge.  Thankfully, there is a tool to help!  You can use the DTN Portal to let us watch your offer for you.  If you have a target price and quantity in mind, we can use the Portal and wait for the market to reach your price.  Once the price is reached we will send out a contract for your confirmation and signature.  We can enter offers for you, of if you are interested, you can sign up for your own account to enter offers on  your own, when it is most convenient for you.

     

     

    Aaron Ulland

     

    Read Full Market Update

    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.