Monthly Archives:: May 2016

Weekly Grain Update 5.20.16

Volatility again reigns supreme, lead by the soy complex, fueled by fund money flow.  Funds have continued to buy commodities, with occasional profit taking corrections, such as was seen on Thursday.

Planting progress seems to be a story of two Corn Belts.  The Eastern Belt has been plagued with wet weather delaying planting.  Some areas have reached the critical decision point, corn or beans.  This is on top of an already perceived increase in bean acres thanks to the nice soy rally.  Here in the Western Corn Belt, planting is nearly complete in most areas, at the very least well ahead of five-year average pace.  Locally however, last weekend’s frost event came with mixed impact.  Most agronomy sources have indicated the corn should come out unscathed since the growing point was still below ground.  This is not to say the corn got hit, growth above ground was hit, and will likely stunt/slow growth.  Soybeans however, are another story.  It seems the earliest beans planted were emerged prior to the frost, thus destroying the plant.  The total of acres needing replanting is not yet determined, but anecdotal evidence indicates a few thousand acres.

While on the surface, fundamentals appear mostly stable, still negative to price.  However, there are very early signs of a change in the works.   Soybeans have seen basis improve alongside the futures rally, a counter-intuitive move.  Cash movement has slowed, but cash demand has increased with improving crush margins for the processor and steady, late season export demand.  While unlikely, it is possible these forces will collide to drop carryout in coming USDA reports.

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

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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 5.6.16

Volatility is the name of the game, and it looks like we have a long game ahead of us.  South American weather, which fueled our April rally, moderated in the past week which left the market looking for buyers.

Now that we are in the heat of spring planting season, cash sales have slowed dramatically.  However, due to the heavy volumes of grain in the past month, basis levels have weakened dramatically.  In a broad sense, the marketplace is convinced the ample stockpiles of grain in the country will move to market eventually so there is no need to pay more now if it will come cheaper later.  Another basis influence at the regional level is logistics.  The longer the producer waits to sell grain, the more grain the elevator or terminal will need to ship in a shorter time frame.  In order to help ease those troubles, there is some thought that basis could become inverted to force sales nearby rather than delay the decision and shipment.  Be careful as we move through the summer.  The combination of an falling basis and a volatile board could make pricing opportunities few and far between.

Next on the docket is the USDA report on Tuesday giving us the updated Supply & Demand outlook and a first look at the 2016/17 tables as well.  The average estimate for corn carryout is 2,256 million bushels.  Beans are pegged at 412 million.  While both these figures are bearish and not terribly surprising given the acreage estimates, the surprise comes in the wide range of guesses.  Corn carryout ranges from 1.7 billion to 2.5 billion, a 800 million bushel swing.  Beans range from 248 million to 748 million. This simply goes to show volatility will be rampant for the foreseeable future, or at least until we have a better handle on total production.

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.

 

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