Monthly Archives:: April 2016

Weekly Grain Update 4.22.16

Even the best amusement park ride couldn’t duplicate the roller coaster that commodities experienced this week.  Unfortunately, even the most experienced, well-versed traders in the industry are struggling to fully explain this week’s market action.  Let’s start with what we do know, first South America.  Argentina is too wet, preventing producers there from harvesting the soybean crop fueling concerns of lost production.  This is viewed as an old crop soymeal issue because Argentina is a bigger crusher than exporter of beans.  Brazil is having an opposite weather struggle, too hot and dry over key areas, potentially decreasing the corn crop.  In light of the corn production concerns Brazil has adjusted the import tax structure, which could benefit the US corn demand.  However it is too early to gauge the full impact.  Brazil is also host to a political quagmire as they start the process of impeaching the president on allegations of corruption.  Keep in mind too, that Brazil is preparing to play host to the world this summer as the Olympics come to Rio.

Here in the US, fundamentally, very little has changed.  Planting progress should come in around 25%  on Monday compared to 16% on average.  The rapid rally in corn should have put a halt to any acreage changes from corn to soybeans.

Money flow buying into commodities, covering short corn positions, and waiting for US weather clarification was seen as a major force behind this week’s rally.  As the board rallied producers were quick to reward the market on the way up. Rising futures coupled with heavy cash movement throughout the country led to the biggest basis drop seen in long time.  Some places down double digits in a matter of days.

Given the variability of price movement, now is the time to have pricing orders in place with the grain department to avoid missing an opportunity while we all start to focus on better weather and spring planting season.

If you would like to receive the Weekly Grain Recap via email each week, just send Aaron an email and I will get you on the list. aaron.ulland@chsinc.com

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.

 

Weekly Grain Update 4.15.16

Solid gains on the heels of macro market influences this week.  Fundamentally, the weather has turned more agreeable to crop progress through much of the Corn Belt and there is still a lot of grain in the US to be marketed.  Therefore, we are left with money flow and South American weather to drive our markets.  This week chatter, and photos, of Argentinian soybeans sprouting in pod due to rain-delayed harvest took over social media and pushed the soy market higher.  Fund money moving around the commodity space was seen as a primary driver for the corn market.  Another contributing factor for corn has been the continued strength in weekly export sales pushing the cumulative sales to 26.8 million tons, a 4.5 million ton increase compared to this time last year.

Despite a general focus on spring field work, rallies in corn and soybeans this week caught the attention of producers across the country.  As a result of the massive cash movement, basis levels in corn and beans both too a hit in most areas.  Corn basis was seen as generally two to three cents lower at most terminals and processors.  Soybeans took a larger hit with old crop down five to eight cents and new crop down five to ten in many locations.

Where to from here?  Some indications point to a short term correction, however the intermediate term trend looks to be mixed.  Corn only breached the high end of our recent range today after recovering the planting intentions report losses.  The soybean trend looks to continue higher with month with six of the previous seven weeks closing higher since the low was set at the end of February.

Given the variability of price movement, now is the time to have pricing orders in place with the grain department to avoid missing an opportunity while we all start to focus on better weather and spring planting season.

If you would like to receive the Weekly Grain Recap via email each week, just send Aaron an email and I will get you on the list. aaron.ulland@chsinc.com

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.

 

Weekly Grain Update 4.8.16

Nothing new this week to give a firm direction to trade.  However, corn was able to stage a rally with May corn closing up each of the six trading sessions since last Thursday’s washout.  New crop corn closed up five of the previous six sessions.  The soybean market was much more volatile through the week, ultimately closing down slightly on the week.  My perception is the market is trying to tell us the final planting mix for corn and beans is not yet set in stone.

Fundamentally nothing has changed in the grain markets.  There are ample stocks of corn and soybeans throughout the US and the world, and barring a complete failure this summer, stocks will likely continue to grow.  A primary contributor to this week’s recovery has been fund activity as well as outside market influences.  A weak weather concern in South American garnered some attention today, keeping a floor under commodities.  Furthermore, wet weather in the Southern US has some concerned for our crop potential, however most have discounted these weather issues as too early to determine an impact.

Cash movement has dropped off dramatically since the USDA report.  Unfortunately, basis has not moved much in response to slow cash sales.  Corn has seen small pockets of strength for quick shipment, a trend that could continue in some areas throughout the spring planting season.  Soybean basis was slightly better at the processor market.

Given the variability of price movement, now is the time to have pricing orders in place with the grain department to avoid missing an opportunity while we all start to focus on better weather and spring planting season.

If you would like to receive the Weekly Grain Recap via email each week, just send Aaron an email and I will get you on the list. aaron.ulland@chsinc.com

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.

 

Weekly Grain Update 4.1.16

Fireworks in March?  An early April Fool’s Day joke?  No, just another USDA report.  Thursday brought two key reports, Grain Stocks and Prospective Plantings.  Leading into the report the general consensus was that this would be a fairly mundane report.  As far as the Grain Stocks report went, it was mundane.  Corn and soybean stocks were both in line with pre-report guesses, above year-ago levels.

Prospective Plantings provided the head-scratching surprise of the day.  The average guess ahead of the report had corn acres just shy of 90 million, yet up 2 million from 2015.  Soy acres were guessed to be at 83 million, up just 300,000 acres versus last year.  The actual USDA figures showed 93.6 millions acres of corn projected to be planted, 3.6 million higher than the guess and a whopping 5.6 million more than a year ago.  Corn was immediately sent lower, trading down 20 cents at one point before closing down 16 cents on the day.  Soybean acres were projected at 82.2 million, down 500,000 from a year ago, giving a small boost to the soy complex.

Now we enter the debate stage of our spring markets.  Early, post-report discussions have centered on the idea the tight ag lending atmosphere may limit corn acre expansion, as well as the idea that an increase in acreage of this magnitude, would produce daunting, over-burdensome supplies a year from now, pushing prices even lower.  Now the job of the marketplace is to convince growers to plant soybeans over corn.  Thus far, soybeans have answered that call, by improving new crop prices in relation to corn.

If you would like to receive the Weekly Grain Recap via email each week, just send Aaron an email and I will get you on the list. aaron.ulland@chsinc.com

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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