Monthly Archives:: July 2015

Weekly Grain Update 7.31.15

It was yet another tough week for commodity prices this week.  Crop conditions seems to have stabilized in most areas and weather is forecast to be fairly benign in the coming weeks.  Very little news on the fundamental front to keep rallies alive.  Now that prices have taken a big step back, traders are hesitant to take any significant positions, especially with the USDA report due next week.  On Wednesday, the USDA is due to release the latest crop production estimates and Supply & Demand reports..  This should give us an updated look at the much-debated acreage mix.  The big question remains, what will our national yield be this year, and will the USDA start to show their hand in the August report?

Soybeans are still trying to discern what the export program will look like this fall as competing South American supplies won’t run dry as early as past seasons.  There was a brief glimmer of hope for soybeans this week with a big export sale announced in the weekly reports, however it was later revealed that the 300 tmt of old bean sales to China were actually for new crop.

Producer selling ground to a halt this week as the board continued to collapse.  As a result, end users have started to show signs of basis strength to keep supplies moving up to harvest.  Old crop basis has shown the most strength of late, which for corn means the carry to new crop is narrowing.  Holding old crop to new is slowly losing its appeal.

 

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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 Rochester 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 Rochester bases its recommendations solely on the judgment of CHS Rochester personnel.

Weekly Grain Update 7.24.15

What happens when national weather patterns turn more favorable, and technical signals turn less favorable? Sharply lower markets. In the last two weeks, corn has lost more than $0.40 in both the old and new crop slots. Soybeans dropped $0.40 + in old crop, while new crop November dropped nearly $0.60! Some parts of the Eastern corn belt were in need of dryer, warmer weather, while select pockets of the Western belt needed a shot of rain. And this week provided just what the doctor needed in each area. Crop conditions on Monday are expected to improve slightly after the beneficial rains and heat. The jury is still out on total acreage, and the yield debate rages on, at least in corn. General consensus is the rally in corn was too far, and too fast, with this week likely being a correction. Some risk premium will still need to remain priced into futures as most expect the USDA to come off the 166.8 bpa figure in the current balance sheet. It seems the trade is pricing corn with a 163 to 165 yield in mind. Anything lower, and we could see another rally, but the trade needs confirmation. Look for sideways to lower trade until the next round of reports on August 12th.
Grain sales moved soundly to the famine category after the feast of sales over the first half of the month. While many will hope for improving basis in the face of falling futures, the abundant supply of corn in the world is holding basis back. Small improvements were seen in basis, however, changes were measured in pennies, not dimes like the futures. Try not to get hung up waiting for a nickel gain in basis only to watch the board drop a quarter.

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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 Rochester 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 Rochester bases its recommendations solely on the judgment of CHS Rochester personnel.

Weekly Grain Update 7.17.15

After three straight weeks of gains, grain futures took a step back this week. Money flow has been focused on the potential for a reduced crop in the US due to prevent planting and persistent rain. Now that the weather seems to be cooperating in the short term, more attention is shifting to the world stocks situation. Corn and soybeans are more than ample throughout the world, which should put a lid on any more significant rallies.
The futures gains seen over the past three weeks prompted the producer to move grain out of storage and get a solid start on new crop sales. Sales en masse of old crop corn in particular, pushed basis levels wider for the week. New crop corn basis is seen as mostly steady as this rally finally allowed the processor to establish an ownership base, though still lagging behind years past.
Bean basis is just the opposite. Old crop basis is steady to slightly firmer, while new crop basis is a little weaker. A week ago, the USDA report showed stocks at 255 million bushels. NOPA crush released this week was the highest June crush on record of 142.473 million bushels. While this number was in line with trade expectations, it still raises the question of accuracy of stocks figures and where we will end the year.
This week’s setback in prices is likely not a long term trend changer. Look for futures prices to drift sideways in the near term, unless we see a new weather threat, the fundamentals have not changed. World stocks will eventually outweigh US production concerns.

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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 Rochester 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 Rochester bases its recommendations solely on the judgment of CHS Rochester personnel.

Weekly Grain Update 7.10.15

Another week, another USDA report to stir the markets. Today, the market was faced with the monthly crop production and supply & demand reports. Heading into the 11:00 am release, analysts looked for the yields to remain unchanged versus the June production report. And that is exactly what was printed. Acreage figures used in the S&D tables incorporated the June 30 figures.
As for the supply and demand, the numbers were more interesting. Corn usage for this year was increased 99 million bushels, through an increase in feed, ethanol, industrial and exports. A slight uptick in estimated imports and the end result was a lower 2014/15 carryout of 1.779 billion bushels. The 2015/16 carryout was lowered as well, by 172 million bushels, to 1.599 billion.
Soybean carryout was lowered a surprising 75 million bushels for this year, and 50 million for next year. Much of the change in 14/15 balance sheet came from the “residual” category, which is often described as a fudge factor to accommodate future changes in last years production.
For the week, corn ended higher while beans took a small step back. Weather still seems to be the key market driver at this point, along with the guessing game over yield and acres. These higher prices are leading to more producer sales, both here in the US and in South America, which is having a negative impact on basis. US and world buyers are waiting as long as possible, knowing full well there are ample stocks to move to market before the next harvest.

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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 Rochester 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 Rochester bases its recommendations solely on the judgment of CHS Rochester personnel.

Weekly Grain Update 7.2.15

Another strong performance from grain markets this week. USDA on Tuesday released June 1 stocks in all positions report, as well as the planted acreage report. Acreage figures from the Feds were about in line with pre-report estimates, with 88.9 million acres of corn planted and 85.1 million beans. The corn figure was down just 300 acres while bean acreage was up 500 from the March Intentions report. This was the more mundane of the day’s reporting.
US Stocks in all positions showed less grain that was anticipated. Corn stocks totaled 4.447 billion bushels versus the estimate of 4.555 billion. Soybean stocks came in at 625 million versus per report guesses of 670 million. The lower stocks numbers combined with wet weather across the Southern and Eastern Corn Belt provided enough impetus for a major rally. Tuesday alone corn futures gained nearly 30 cents in old and new crop positions. Soybeans gained more than 50. With the huge rally came massive sales from the producer, which had a very pronounced, negative impact on basis with some locations dropping more than ten cents in one day. However, future gains still outweighed the basis losses.
Now we are faced with a three day weekend, which is often a recipe for volatility on Monday. Weather forecasts will be watched with bated breath on Sunday, as many areas to the east are beyond the “rain makes grain” stage and looking for hot and dry.

 

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 Rochester 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 Rochester bases its recommendations solely on the judgment of CHS Rochester personnel.

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