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.

 

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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 6.26.15

Wet weather prevails across the Midwest, our weather market has commenced. Despite a great start to the planting season, continued rain in the southern corn belt has delayed soybean planting and wheat harvest. The unsettled, wet weather pattern looks to persist for the immediate term, which has caused crop condition ratings to fall. The falling ratings along with delayed wheat harvest has pushed prices higher for the week. Old and new crop futures in both corn and soybeans enjoyed significant gains this week. For the week, corn was up over $0.30 while soybeans rose nearly $0.45.
The price rally was just what the farmer was waiting for, enough to pull stocks out of storage and into the supply pipeline. End users were seemingly flooded with new grain purchases this week, which was clearly reflected by in the falling basis levels. Thus far, old crop basis has taken the brunt of the damage, especially in soybeans. With ample old crop supplies in the country, end users are unwilling to pay one cent more than necessary for the next bushel purchased. Enough questions remain around new crop acreage and production that basis levels there are holding steady. We will get a better idea of those figures on Tuesday when the USDA releases the June 1st Stocks in all positions and Planted Acreage reports.

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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 6.12.15

Another quiet week for grain markets this week, punctuated by the much anticipated, yet highly mundane, June USDA Supply and Demand report. Very few changes were made the balance sheet. Corn carryout increased in both the old and new crop years thanks to a 25 million bushel decrease in 2014/15 ethanol production. Soybean carryout dropped 20 million for 2014/15 and 25 for new crop. This was done through increases in crush and exports.

In general the market is focusing on weather and ample stocks, driving prices lower. The old adage “rain makes grain” is also feeding the bearish sentiment. Brief rallies in corn were typically the result of short covering and concerns of too much rain in parts of the corn belt. Soybean gains have been short lived as 330 million bushels is more than enough to get through to new crop. However, bean basis is seen as steady to slightly firmer, margins and crush rates remain strong in the near term. Widespread bird flu outbreak has not yet made a significant impact on demand.

Our next opportunity for significant market direction will be the June 30 acreage report from the USDA. Many questions should be answered by then. Did more corn get planted in the early planting window we saw this year? Did late spring rains prevent all the intended bean acres from being seeded? Will the “missing” acres from the total acreage pie be found? Until then, we will likely see sideways trade with any rally a function of non-fundamental forces.

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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 6.5.15

Markets this week can best be described as a roller coaster ride, usually following the US Dollar index. As the macro economic picture gyrated throughout the week, fluctuations in the US Dollar index forced quick changes in the commodity space. For the week, both corn and soybeans closed with gains. From a fundamental standpoint, there is little reason for commodities to rally, but they seem to be showing some strength all the same. Crop conditions show no concerns at this point in the growing season. Now the market waits for the next round of USDA reports, starting with Supply and Demand on Wednesday. Early guesses are for the soybean carryout to drop slightly while corn carryout is estimated to increase a little. Export sales appear to be slow and behind pace, leading to the projected higher corn carryout. Soybean demand on the other hand, continues to stay robust, dropping supplies slightly. June 30th, we will get the official final planted acreage. This will serve to fuel the new crop supply debate more, particularly in soybeans. Current estimates are for 84.8 million acres of soybeans, but many in the trade look for that to jump dramatically, thereby increasing soy carryout . Without a major increase in demand, burdensome supplies are likely to remain.
On the cash front, corn basis has backed off slightly while the board has enjoyed the minor rallies. Soybean basis has shown little to no signs of weakness. With eastern corn belt processors are rumored to be paying nearly $10.00 cash, it leads some to question the accuracy of current soybean carryout figures. We will all be wiser on Wednesday when we see the latest numbers from the Feds.

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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 5.22.15

For the week, grain trade was relatively quiet.  The primary market maker this week was weather.  Early in the week frost and freeze warnings were issued for parts of the upper Midwest, potentially putting some of the young corn crop at risk.  When the threat passed with little impact, Monday’s weather premiums were quickly taken back.  As the week progressed, corn resumed it’s mundane sideways trend, while soybeans continued their slow decent lower.

Wheat markets were also playing with the corn markets this week.  Wet weather over parts of Southern wheat crops are beginning to negatively impact production and quality potential.  This had led to some short-covering gains in wheat, with corn an additional beneficiary.

Monday’s planting progress is expected to show nearly 85% of corn planted and 65% of soybeans in the ground nationally.  We should also get our first condition rating for corn, with estimates putting 78% of the crop in the Good and Excellent categories.  Should this prove out, it is possible we will start to hear more debate about potential yield with early planting and high ratings this early in the year.

With Memorial Day on Monday, there will be no markets Sunday night or Monday.  The long weekend has many traders vacating the floor early, resulting in a quiet, thin trade.  Weekend rains over wheat country will likely impact market direction when trade resumes Monday night.

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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 5.15.15

On Tuesday, the USDA released the latest round of Supply and Demand estimates.  Trade participants were generally expecting a small increase in corn carryout for this year.  Corn carryout was raised slightly to 1.851 billion bushels, up 24 million from April.  In our first glance at carryout for next year, the USDA projected  a 1.746 billion carryout in 2015/16.  Both numbers were generally as expected, and after some knee jerk reaction higher, corn ended the day mostly unchanged.  For the week, corn managed to gain two to four cents in most contract months.

The soybean balance sheet provided more of a firework show.  Old crop carryout was decreased 20 million bushels thanks to a small increase in both crush and export categories.  The USDA’s first shot at the 2015/16 bean carryout was the biggest surprise of the day, an estimated 500 million bushels.  If realized, this would be the largest soybean carryout figure since 2006/07.  The soy complex reacted sharply lower on the higher stocks facing us in the coming year.

As for local basis, corn bids were generally weaker.  End-users and producers seem to be playing a game of chicken.  Who will blink first?  Will the processor firm bids to keep supplies moving or will the producer throw in the towel, unwilling to pay more storage in a falling market?

Soybean bids seem to be steady to slightly firmer to end the week.  NOPA crush figures, along with soyoil stocks, indicate demand for soybeans will remain strong in the short term.

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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 5.1.15

Corn prices fought against the rapid spread of two strong bearish factors: planting progress and avian flu. While national corn planting progress was reported at 19% on Monday evening, it is thought to be approaching 50% planted in key areas which will likely bring the nation to nearly 40% planted next week. With the ideal planting conditions there has also been some talk that “extra” corn acres will be seeded rather than making the switch to beans this early in the planting window. The spread of the avian flu continues to baffle scientists trying to slow the spread and find a solution to the problem.

Soybeans attempted a brief rally this week in an effort to prevent the “extra” corn acres from going in the ground. Slightly better than expect export sales of old crop soybeans failed to push the market past key technical resistance levels, and the rally failed as another month-end came to pass.

Cash basis levels were seen as mixed this week. Soybeans saw the best strength nearby, an effort to keep the few trucks still on the road during planting season, hauling beans rather than corn. Corn basis was steady to slightly weaker for the week. End users are less willing to push to extend ownership as they wait for the inevitable “second harvest” this summer, a time when basis is likely to collapse.

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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 4.24.15

The rapid spread of the deadly bird flu had the market on edge and trending lower for much of the week. As more reports of infected barns surfaced, demand for corn and soybean meal was put into question. The full impact on demand will not likely be felt for some time though, depending on how long the out-break lasts. The US Dollar index traded higher early in the week which also contributed to the downward pressure on grains.

National planting progress reported on Monday showed the US still behind the five year average pace for corn. The slow start did little to spur any rally. Progress is not expected to show much gain when we see the next update on Monday. Weather over the weekend looks to slow progress early, but by Sunday and into next week, locally at least, we should see activity ex-pand at a fast clip. Even though we are just a week away from May 1st, there is little concern in the marketplace regarding the slow start.

Basis levels are seen as slightly weaker to end the week. End users appear to have enough coverage for the time being, and with rain bring trucks back to hauling grain, quick-ship premiums are fading quickly.

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Brought to you by the 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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