Grain News

  • 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.

  • Grain Update 3.3.17

    February went out with a whimper this week, but March started with a bang.  The optimistic start to February quickly faded away ending the month nearly unchanged.  With a new month came new money flow into commodities driving prices mildly higher early on Wednesday.  The real fireworks this week was influenced by the US government, but not the USDA as is usually the case.  As rumors started to swirl that the President was considering a change to the RFS standard and potentially the ethanol blend rates, corn started to spike higher, nearly reaching the February highs.  However, by the end of the day, the White House soundly denied these rumors and the corn balloon burst.  Daily gains were cut in half for both corn and beans.  Algorithm trading on headlines and rumors has a tendency to create wild volatility in markets, which was clearly demonstrated this week.  After the dust settled from the rumor mill, commodities were still able to manage gains on the week.

    The one day rally was enough to pull some grain from producer hands, though less than one would originally think.  In most cases this is the second time seeing this price level for both old and new crop which muted much of the enthusiasm.  From a basis standpoint, most bids have rolled to the May futures.  Moving the bids from the March futures to May didn’t have much net effect on prices this time.  Local domestic users such as ethanol plants and soybean processors are getting enough bought but are still facing tough competition from the river terminal market.  Carry in the markets has pushed much of the grain sales to later in the spring and summer, yet we all know the grain is in the country and needs to move to market before the next harvest.

    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.

  • Grain Update 2.10.17

    Money flow and headline trading is still the major guiding force in grains right now.  The USDA did offer an updated look at the US production and supply & demand tables this week as well.  For the most part the report was well within inline with expectations.  US corn carryout dropped slightly to 2.32 billion bushels from 2.355 billion.  The drop in stocks came from a 35 million bushel increase in the Food/Seed/Industrial category.  Of the 35 million increase, 25 million is expected to come from increased ethanol grind.  The weekly ethanol figures came in on Wednesday showing a slight drop in production week over week, but still very near record production levels set in the past few week.  Soybean carryout was left unchanged for the month.

    Two big questions on the mind of producers everywhere is why have we rallied and how long will it last?  The easy answer to the first part is money flow.  Fundamentals of ample worldwide stocks have taken a back seat to funds wanting to get into commodities for a multitude of reasons from fears of inflation to too much rain in Argentina and strong demand.  That last part is what makes predicting a top, or the end of the rally, so difficult.  When funds decide to take profit, it is very possible we will see a turn lower for a period of time where fundamentals will regain influence.

    Through this rally one would typically think local basis would slip as futures and basis are usually inversely related.  However, this week was atypical.  As corn gain nearly a time in the futures, local basis has only lost a couple cents.  Producer movement has been slow on the premise we have seen these prices before.  We need to make another jump higher for the next big round of producer sales.  Soybeans were in a similar boat.

     

    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 2.3.17

    Headline traders have ruled the trade lately.  Algorithms have been watching South America weather headlines as well as the transition of power in Washington D.C. which has been impacting the markets at times as well.   These headline traders and fund money flow can be difficult to follow let alone predict.  Overall the market is very emotional right now.

    Let’s look at the fundamentals of the market, starting with old crop.  There is ample supplies of both corn and beans in the US.  While corn export demand is running well above year ago levels, soybean exports have slowed.  This is in part due to the Chinese Lunar holiday this week, but also due to South America harvest starting in the north which ships piling up at ports waiting to be loaded.  Old crop corn is also supported by record levels of ethanol grind.  On the flip side, soybean crush is steady but margins are slim due to poor domestic soybean meal demand.  In both cases, old crop basis is likely to suffer as a result of the ample stocks; at some point the grain needs to move to market, buyers know this and basis will react accordingly.

    On to new crop.  The market is anticipating a 4 million acre switch from corn to bean production.  Assuming trend line yields, the corn balance sheet can sustain a 4 million acres loss.  Soybeans however, has a bigger challenge sustaining reasonable balance sheet levels with only a 4 million acre gain.  Some have argued it could take a 6 million increase in soybean acres to maintain current stocks to use levels.  The market’s job now is to determine what gets planted.  This annual acreage debate will only gain attention in the coming weeks.

     

    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 12.23.16

    Merry Christmas and Happy New Year from all of us at your CHS grain team.  We look forward to working with you in the coming year.  As a reminder, our offices will be closed on Monday, December 26 and Monday, January 2nd.

    Holiday shortened trade today featured much of the same softer tone seen all week.  Beans took the brunt of the damage this week, down nearly $0.50 nearby and nearly $0.40 in the new crop 2017 slot.  Corn tried to hold its ground against collapsing beans, but still ended lower on the week, closing down five of the last seven sessions.  Soybeans have been trading lower on improving weather conditions in South America.  Parts of Argentina had been in a mild drought situation but recent rains have corrected the situation, and more rain continues to show up in the forecasts.  These rains should help the beans that are already planted, which will likely start to show up in global crop ideas in coming reports.  Ideas of big crops in South America on top of the big US crop will likely pressure beans in the near term.  Our next look at USDA numbers comes on January 12.  This should be the final yield and production number for the 2016 US crop.

    Local basis levels have been quietly improving throughout much of the month.  Corn basis showed the first signs of life at some ethanol plants when the bitter cold snap dramatically slowed producer direct shipments.  Soybeans basis was slower to react, but did have a slightly better tone this week.

    Next week will be another shortened week with thin, volatile trade likely to be a feature.  Be alert for pricing opportunities as any rally could be very short lived.

     

    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 12.02.16

    Now that the US harvest is all but complete, the bins are stuffed to the eaves and market attention is shifting to South America prospects.  In broad terms, the US producer, seeing much better than expected yields sold beans off the combine as prices slowly climbed higher.  Corn on the other hand was generally put in storage in hopes of better prices to accommodate the higher yields.  The dismal cash movement is beginning to improve local basis values.

    From a global perspective, US export sales have been disappointing with South America being more competitive in earlier-than-normal time slots.  Also, now that our friends to south are in their planting season focus has shifted to total production and world stocks of grain. Early indications are for record production out of South America which will only add to the record US crop to create a burdensome supply of grain in the world.

    All that being said, where do we go from here?  World demand for US grain is waning, leaving our fortunes in the hands of the domestic processors.  It is quite possible we will see a “second harvest” in the US once the minimum storage time is used and the spring input costs start to pile up.   We could see some short term basis improvement, the huge crop we have stored in the bin coupled with steady demand, it is hard to justify prices being at the current values.  Beans are shakier ground than corn at this point.  Be prepared with target prices in mind and working.  At the same time, look ahead to next fall.  In some cases, fall 2017 soybean prices are at or above cost of production.  Generally speaking, there isn’t anything wrong with locking in a profit.

     

    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.

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