Monthly Archives:: September 2016

Grain Update 9.23.16

When it comes to describing markets, volatility is a word used perhaps too often by grain traders and consultants.  Often times it is used when no clear explanation exists for the action of the overall market.  However, one could argue that the past week was the perfect definition of volatile.  The dictionary defines volatile as: a) likely to change in a very sudden or extreme way (Soybeans futures prices); b) having or showing extreme or sudden changes of emotion (Soybean basis); c) likely to become dangerous or out of control (Mother nature).

First, the week began with November soybeans marching higher, coming within just six cents of the $10.00 mark before turning tail and closing lower for the week.  Second, soybean basis jumped higher for prompt shipment to ensure processing plants were able to bridge the gap to new crop and the impending rain delays.  Monday started with some bean plants paying double-digit positive basis values to ensure supplies.  By Wednesday, bids collapsed by 30 to 45 cents in a matter of hours.  The plants got their fill and opted to wait.  We also had a first hand look at Mother Nature’s dangerous, out of control side of volatility.  Heavy rain fall put an abrupt end to early harvest progress and caused flooding of rivers, and low lying areas including low spots in many fields.

The bright beginning to the week was the excellent yield reports from local bean harvest.  Early indications are that the bean crop is better than a year ago.  While the market set back to end this week, extended wet weather could potentially reverse that trend as the market debates the impact of harvest delays on total production as well as quality.  Conversely, if the weather turns warm and dry, as is currently forecasted, quality and quantity concerns will dissipate and focus will shift back to the demand side of the balance sheet.

If you would like to receive the Weekly Grain Update 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 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 9.9.16

Markets were fairly mild-mannered this week as we wait patiently for the next round of USDA reports on Monday.  Technical trading and position squaring were the primary features of the week.  On Monday we get a look at the latest USDA Crop Production and Supply & Demand table.  All eyes will be keenly focused on the estimated yield figures on both corn and beans.  The most recent estimates came in at 175.1 for corn and 48.9 on beans.  Pre-report guesses show are estimating the feds will lower corn yield slightly to 173.4 bpa and pump up bean yield marginally to 49.2 bpa.

From the supply perspective, the market is looking for a big drop in soybean carryout due to strong demand to outweigh the potential increase in yield.  Corn carry would likely slip with a drop in yield, however even carryout drops to 2.2 billion bushels, there will be plenty of corn in the country.

Local basis has remained fairly steady throughout the recent futures recovery.  In the nearby slot though beans seem to be have a better story as we wait for new crop supplies.  River markets are softening but processors appear to fighting for the last of the old crop to keep supply pipelines full.  Look for quick-ship premiums and opportunities but be wary of tightening deadlines for delivery.  Once the user is convinced of adequate new crop supplies hitting the plant, bids will fall quickly.  The wet weather pattern has the potential to delay harvest beyond processor ownership, supporting the nearby bids.  Ethanol plants are a different story, paying a carry for new crop as the old crop keeps coming without much effort on their part.

chs-weekly-recap-9-9-16If you would like to receive the Weekly Grain Update 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 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 9.2.16

The end of one month and the beginning of another, simply a turn of the calendar page, but market action was starkly different when the calendar flipped.  Most noticeable was the rebound in corn.  After suffering losses ranging from a quarter cent to seven cents for the previous eight trading days, corn turned higher, with gusto, as we moved into September.  The eight days down started with the kick off of the Pro Farmer crop tour and culminated with trading down to lows not seen since September of 2009.  Market gurus had been watching the key December contract and the October 2014 low of $3.1825 as a key support level.  This price was breached this week with Dec 16 futures trading down to $3.1475 on Wednesday.  Thursday and Friday showed a strong recovery, gaining $0.13 in two days to close at $3.2850.  The late rally this week, bouncing nearly $0.14 off the contract lows gives hope that we have found the bottom.  Watch for follow through next to confirm.

Soybeans didn’t fare as well moving into September.  Pro Farmer estimates came in higher than the last USDA estimate, pressuring soybeans throughout the week.  There was a small recovery Thursday and Friday of this week, however, proportionately not as strong as the corn market.  Key points to keep in mind with beans.  Demand always seems robust for soybeans throughout the year.  Early indications point to another solid year for exports.  However, a counter to the demand equation is supply and the old adage, big crops get bigger.  Is the Pro Farmer estimate a precursor to what we will see coming from the USDA in coming months?  We can only wait until the combines hit the field in the weeks ahead.

If you would like to receive the Weekly Grain Update 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 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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