Monthly Archives:: May 2017

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?

 

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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.

St. Charles Cardtrol Closure

As a valued customer, it is important that you know the St. Charles Cardtrol location will cease operation as of May 18, 2017. The St. Charles convenience store will remain open, as usual, and kerosene will be available at our Chatfield convenience store.

We apologize for any inconvenience this may cause you. This decision, however, may have a positive effect for the community. The City of St. Charles is acquiring our parcel of land where the Cardtrol is located as part of the MnDOT Safe Routes to School grant program. As you know, safety is always a priority for CHS and that includes safety of our children as they walk or bicycle to school.

For your convenience, you can always find the locations of our other Cenex convenience stores and Cardtrols in the area on our website (www.chsrochester.) Learn more about the grant and plans for St. Charles here http://www.winonapost.com/News/County/ArticleID/48640/Safer-streets-sidewalks-for-St-Charles

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.

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