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Monday, July 30, 2012

Crop conditions were released this afternoon with a 2% decline in the good/excellent ratings for both corn and soybeans. Iowa crops continue to decline for both corn and beans with a 3% loss in g/e ratings. Iowa corn is now 20% g/e while beans came in at 25% g/e. The big changer for corn was Pennsylvania increasing in rating 6% to 49% g/e. Soybean big changers where Kansas and Mississippi decreasing their rating 7% for g/e. After a good week of rains in the eastern corn belt both corn and bean ratings increased but at a slower rate than the western corn belts loss. Today was possibly a buy the rumor sell the fact kind of day with traders feeling the 2-4% estimated decline in g/e ratings wasn’t enough. At this point in the season g/e ratings may not mean much to corn. Expect these numbers to be slightly bearish for the overnight opening for both corn and beans.

Good morning!

Our markets were higher overnight and are still higher this morning. New all-time highs were made in Dec corn this morning, now up over 20 cents!  Weather is still the story.  Weekend rains did fall across parts of the northern Midwest but overall – they were less than forecasted/hoped.  Over the next 10 days across most of the corn belt there are only a couple chances for rain (one late this week, one early next).  If we miss those watch out – this crop will continue to shrink which gives this market more work to do to destroy demand.  Speaking of demand there is talk the Arkansas and South Carolina may soon ask the EPA for an ethanol waiver.  They must show ethanol causes severe economic harm.  In this environment, that may not be as difficult as once thought?

Corn is up 20 to 22 cents
Soybeans are up 40 to 45 cents

Friday, July 27, 2012

Good morning!

Our markets are a little higher today, but generally there are no surprising fundamental news stories out there.  Projected yields are still retreating as the extended forecasts are a little drier for next week – more important for beans than anything today.  Next Monday afternoon’s crop ratings are expected to show another 3-5% drop in the good to excellent categories.

We hear that corn harvest is starting today in small pockets of Central Illinois, one particular farmer’s field we heard about had a hand checked moisture on it on Monday which came in at 25%, this was planted mid late March.  Moisture should be in the teens today and although yields will be interesting to see - aflatoxin levels will also be watched closely. 

The outside markets are a touch friendly today as this looks to be the 3rd day in a row that financials are higher. 

Corn is 6 to 8 cents higher
Soybeans are 19 to 23 cents higher

Thursday, July 26, 2012

Finally had rain move thru the state last night, amounts ranged from near zero to an inch in spots. The same front is moving East with the same mixed results. Overall the market looks at rainfall totals this morning as disappointing. Weekly export sales are out this morning and we had net corn sales cancellations for both this crop year and next (both likely China). Corn demand rationing is happening, mainly in the ethanol and export sectors. This current year’s carryout will be larger than last advertised, probably pushing towards 1.0Bln bushels. National corn yield is probably trading around 130bpa, although some private analysts are below that. Weekly soybean sales were for the most part as expected. Trade has certainly been volatile so far this week…charts look toppy and when the funds want to either buy or sell it can move in a hurry. Markets this morning are fairly quiet with corn slightly higher and soybeans slightly lower.

Wednesday, July 25, 2012

Good morning!

Our markets fired up last night and were sharply lower as the funds continued to liquidate (sell) their positions.  But as the overnight session drug on, corn and beans slowly started to recover their losses and are now trading higher.  The extended forecasts may have turned a touch wetter yesterday but - overall this lack of rainfall mixed with extreme heat is still affecting yield.  As long as yield is perceived as going down – it will be hard to completely sell this market off.

The outside markets are supportive for the first time all week as the dollar is lower and the DOW is higher.  This is also aiding the recovery.

Corn is 8 to 10 cents higher
Soybeans are 20 to 25 cents higher

Drought Footprint from NY Times:

Tuesday, July 24, 2012

Good morning!

Our markets are weaker this morning led by soybeans.  The bearish influences are coming from cooler, wetter weather forecasts and EU debt problems.  The hot temps will finally subside later this week as a cold front moves in, adding moisture.  The 8 to 14 day forecasts also show cooler, more normal temps along with rainfall across a good swath of the corn belt.  If all of this predicted moisture holds true, it would be hugely beneficial to the soybean crop, coming just in time. 

Yesterday afternoon the crop ratings were out.  In corn the US dropped 5% points from 31% GE to 26%.  This was as expected.  The only thing that may be a surprise to the trade is how sharply the Western Corn Belt fell off (Iowa dropped 13% points, down to 23% GE after being 36% GE last week). In beans, the US dropped just 3% in the GE category and states like Wisconsin and Michigan actually improved week-on-week after some nice rains.  The Western Corn Belt slipped however, with Iowa dropping 10%, down to 28% GE from 38%.

Corn is down 13 to 17 cents
Soybeans are down 35 to 40 cents

Monday, July 23, 2012

Good morning!

Our markets are sharply lower this morning – even as temps climb into the triple digits across much of the belt this week.  You can blame this on outside influences as equity markets are coming under heavy pressure today.  The world has shifted its eyes back to the EU debt situation, there are A) fears that Greece isn’t doing what it needs to do to cut spending and B) indications that Spain will need more help (likely a full-blown bailout).  This has the dollar rallying, the DOW down 150 pts and crude oil down $3/barrel! 

As far as our grains go, the weather is still friendly and the weekly crop ratings will come out this afternoon (expecting a 4-6pt drop).  Safe to say with the collapse in the outside markets the buyers are standing on the sidelines and when the buyers step away – all that is left are sellers…

Corn is down 15 to 18 cents
Soybeans are down 30 to 40 cents

Friday, July 20, 2012

Good morning!

Our markets are higher overnight, led by soybeans.  Yesterday NOAA released updated 30 & 90 day weather forecasts which painted a hot and dry scenario for the corn belt.  This has bean traders nervous as beans are basically made in August.  There was talk that some electronic traders started taking profits in their corn positions, selling corn and buying beans – pushing that corn/bean spread out. 

As far as nearby weather? Not much change. Ohio and parts of Indiana did receive some much needed rainfall, I am not sure what help that gives to the corn at this time (depending on planting/maturity/etc) but I think they will take anything they can get.  There are also stories that China is cancelling new crop corn purchases from the US and the Korean Feed Association asked the US to use less grain stocks for biofuels.  Safe to say the demand side of this equation is starting to get shaky.  We aren’t hearing of many new crop soybean purchases from China being cancelled – probably because there is nowhere else to buy beans. If they do cancel bean purchases they will probably need to replace them with their own reserves.

Corn is steady to up 5 cents
Soybeans are up 10 to 20 cents

Thursday, July 19, 2012

Good Morning!

The bulls are back in the market after making record contract highs and with continued weather patterns remaining hot and dry. Yesterday parts of Indiana and Illinois saw good rainfall, but is it too late? Ag Secretary Vilsack made a statement yesterday suggesting they have no intents on changing the Renewable Fuels Standard for ethanol blending at this point despite South Korea’s top grain importer urging the US to cut corn use for biofuels. Outside markets are supportive as the dollar trades lower while oil and gold trade higher.

Corn 6-8c higher
Beans 40c higher

Wednesday, July 18, 2012

Good morning!

Our markets are a bit weaker this morning on what appears to be just profit taking.  We are still trading weather, and the bullish weather pattern has not changed.  I think this market is finally taking a glance at the demand side of the equation and nobody quite knows what price level this market needs to be at to ration enough demand.  Honestly, we don’t know how much demand we actually NEED to ration until this crop stops shrinking.  We do know this regarding next year: supply is getting smaller & demand is getting smaller.  The question is how much of each?

The outside market today are a little weaker with a rallying dollar and lower financials.  There is a small rain event coming across the Midwest today, maybe a ¼ to a ½ inch of rain could fall.  After that though???  Maybe mid-next week for a small shower with temps staying hot throughout. Crop size will be under attack again.  There are rumors throughout the market that China has cancelled some US corn and soybean purchases… this is probably true and more of this needs to happen if we are to ration demand and work prices lower.

Corn is down 3 to 5 cents
Soybeans are down 4 to 6 cents

5-day QPF:

Tuesday, July 17, 2012

Good Morning!

Our markets are mixed this morning with corn up a few cents and soybeans down a few cents.  The crop progress ratings released yesterday afternoon were friendly to prices (dropping G/E in corn 9%, now the 2nd lowest rating on record).  The markets opened sharply higher last night because of that but over time were whittled down as waves of profit taking came through in a volatile, high volume night session.

Current weather outlook continues to show stress for developing crops as the 6-10 day forecast shows above normal temps for pretty much the entire corn belt with below normal precips showing in states like Iowa, Missouri, Illinois and Nebraska.  NOAA is calling this drought the worst since 1956, there are 1,016 counties across the US that have been declared disaster areas because of it. 

Corn is 3 to 5 cents higher
Soybeans are 3 to 5 cents lower

Yesterday afternoon’s Crop Progress Report (LW):

Monday, July 16, 2012

Good morning!

It has been a wild morning so far, both corn and soybeans are trading at new contract highs as the weather forecasts remain bullish.  Too hot.  Too dry.  The crop in the west is now starting to come under question as ‘feels like’ temps are back in the triple digits this week.  There are some rain chances for mid-week this week but they aren’t expected to amount to much more than a ½”.

The outside markets are a negative input this morning but nobody seems to care about that today.  Demand is also probably weakening at these new highs but nobody cares about that just yet either.  Until the crop stops getting smaller the bulls should have their way.  Weekly crop conditions are out this afternoon, the trade is expecting a drop in G/E ratings of 4-6%.

Corn is up 25 to 30 cents
Soybeans are up 30 to 35 cents

Friday, July 13, 2012

Good morning!

Our markets are higher this morning as Dec corn broke through the contract high set shortly after Wednesday morning’s S&D report, making another new contract high today!  The drought seems to be worsening as the temps are turning extreme once again and next week looks mostly dry.

The outside markets are also in our favor today as crude and gold are higher while the dollar is mixed.  Today is Friday which means we have another “weather weekend” in front of us.  The recent trend has been for the longs in our grains to take profits on Friday afternoon, watch the weather over the weekend and if no changes are made – the money flies back in Monday.  If that holds true again, we could see a setback later today.

Corn is 10 to 15 cents higher
Soybeans are 20 to 25 cents higher

Here is the recent drought monitor, recorded Tuesday, released yesterday:

Thursday, July 12, 2012

Good morning!

Our grains are bouncing back this morning as all eyes have turned back to weather.  There was some talk yesterday about additional rainfall in the forecast – well the talk today is that hot temperatures are returning later this week and into next week and the only real rain event in the forecast consists of scattered light showers.  The rains projected for the Eastern corn belt also appear to be slipping a little south.  Yield projections are in question again and long story short: weather appears to be a bullish this morning.

One of the handful of reasons that our grains got smacked by profit taking yesterday was that there were rumors that the USDA was going to announce some potential changes to the ethanol mandates which had the longs in the market nervous.  Their announcement came at approx 12:30 yesterday afternoon and all it basically said was that there will be some greater CPR flexibility in disaster areas, for emergency haying and grazing.  Ag Secretary Vilsack says there are no plans to change biofuel ethanol mandates for corn-based ethanol.  This may calm some fears in the short-term and allow the markets to bounce higher today. 

The USDA released their weekly export sales report this morning, this was a non event for the most part although old crop bean sales were strong which is friendly.

Corn is up 10 to 15 cents
Soybeans are up 5 to 8 cents

Wednesday, July 11, 2012

USDA monthly supply/demand report out this morning featured aggressive yield cuts to the corn crop. National corn yield slashed from 166bpa to 146bpa. There were some demand cutbacks both for this year and next, so the ever-important carryout numbers stand at 903Mln for this current marketing year and 1.183Bln for next year. Soybean yield was lowered slightly to 40.5bpa. Soybean carryouts are 170Mln this year and 130Mln for next year.
These numbers, along with current weather, are supportive to prices. However, be aware that corn demand rationing is actively happening. Corn exports are non-existent and rumors of Brazilian corn imports to the SouthEast US look to be valid. The ethanol sector is suffering amid negative margins and unless crude oil return to $100/barrel or national gas consumption reverses the declining usage trend, this will continue.
Prices have been higher, but volatile following the report. Currently corn is up 15 and beans up 25.

Tuesday, July 10, 2012

Good morning!

Our markets are (finally) taking a breather so far this morning as corn, soybeans and wheat are all weaker across the board.  Yesterday the USDA’s crop conditions report showed that the crops continue to decline, but this was mostly expected and likely built into the market as the trade overnight appeared to have a “buy the rumor sell the fact” type of action from the start. 

The weather forecasts do look a tad wetter today than they did yesterday, pushing a few rains further North into the Eastern corn belt.  All of this is giving us a weaker start to the day.

Remember, tomorrow morning is the USDA’s July S&D report.  The trade is expecting sharp declines in both corn and bean production.  Here are some average trade estimates for that:
·       Corn
o   Yield of 154.1 (previously 166)
o   11/12 ending stocks of 840mb (previous 851mb)
o   12/13 ending stocks of 1.231bb (previous 1.881)
·       Soybeans
o   Yield of 42.3 (previous 43.9)
o   11/12 ending stocks of 170mb (previous 175mb)
o   12/13 ending stocks of 134mb (previous 140mb)

Corn is down 12 to 15 cents
Soybeans are down 14 to 17 cents

5 day QPF map: (the QPF is based purely on raw data, not a meteorologist’s forecast)

Monday, July 9, 2012

As expected the weekly USDA Crop Progress Report reduced good/excellent ratings in both corn and soybeans caused by excessive heat and lack of rain. National corn crop ratings are 40% g/e down 8% from last week. Soybeans nationally rated 40% g/e down 5%. Iowa corn conditions over the past week dropped 16% to a rating of 46%. The Iowa Soybean crop dropped 11% from last week to a rating of 48% g/e. North Carolina took the brunt of crop decline boasting a drop in corn ratings of 18% and a soybean reduction of 19%. Trade estimates were projecting a 5-7% decline in both corn and beans. These numbers are friendly corn and neutral beans.

Our markets are sharply higher again this morning after another hot weekend with disappointing rainfall.  The temps did cool down (back to normal) for this week, but unfortunately for crop sizes – no rain is in sight.  The outside markets are negative this morning, but that doesn’t really matter – we are still tied to weather and it is bullish to prices. 

Crop ratings will be out this afternoon after the markets close, the trade is expecting a 5-7% drop in G:E ratings across the board.  The USDA releases its monthly S&D on Wednesday.  Yields will fall, but probably not by as much as traders feel they should – this report will be as of July 1st and weather has continued to wreak havoc since then.

Corn is up 30-35 cents
Soybeans are up 40-45 cents

Friday, July 6, 2012

Good morning!

The markets appear to be taking a deep breath this morning (much-needed).  Most of this is due to good old fashioned pre-weekend profit taking. 

This rally we have seen has been one everyone should remember for a while.  Looking at yesterday’s close vs. the close just two weeks earlier… dec corn gained a whopping $1.58/bushel!  Nov beans over the same 2-week, 9-trading day window gained $1.55/bushel.  Talk about a game changer for producers’ bottom lines (at least those that plan to have a crop).

As hot and as dry as it has been – it is hard to imagine the US corn crop getting any worse in traders’ minds then it is has been this week (triple digit temps, no relief in sight).  Current general weather this morning shows cooler temps this weekend as a cold front moves across the Midwest.  Late next week there is a chance for hotter temps to show up once again, but it could also bring with it showers for the Southern Plains/Delta/Southeastern Belt.  This is helping the market work lower.

The USDA released its weekly export sales report this morning.  Corn sales came in well below guesses – actually coming in at a marketing year LOW.  That is not friendly to corn prices.  Bean sales on the other hand were somewhat impressive – especially in new crop.  That is a touch bullish to beans but likely won’t matter today.

The goal of the market is to slow down demand, especially corn demand.  If you pay close attention it may already be happening.  You can see it in decreasing corn exports, poor ethanol margins, and a basis that is backing off every other day.  A big rumor that was floating around the trade late yesterday was that the EPA is thinking about reducing the ethanol mandate for next year by 20%.  Really the whole idea is pure speculation – but these are the types of things that can turn a bull market around. 

Corn is 16 to 19 cents lower
Soybeans are 15 to 17 cents lower

Thursday, July 5, 2012

Good morning!

The markets have been closed since Tuesday at noon and don’t open today till 9:30am.  Currently calls appear to be higher on both corn and soybeans, led once again by weather.  With the hot/dry weather we saw over the holiday and the limited rainfall showing in the forecasts – crop sizes are still under pressure.  There wasn’t a USDA weekly export sales report this morning – that is delayed till tomorrow due to the holiday. The only other piece of news to discuss involves the outside markets.  Both China and the EU cut their interest rates. This has rallied the dollar which could take some of the bullishness away from commodities today…

Opening Calls
Corn 5 to 10c higher
Soybeans 10 to 20 cents higher

Tuesday, July 3, 2012

July 3rd, 2012 Mid Session Comments

Markets are lead higher on bullish news from yesterday’s crop condition ratings. Weather projections show hot and dry conditions to remain over the next 5 days. Outside markets are mixed with crude up, US$ up, and gold up. Markets will close at noon today and reopen at 9:30 on Thursday. Have a safe and happy 4th of July.!/fccoop

Monday, July 2, 2012

July 2nd, 2012 Afternoon Market Comments

Weekly USDA crop condition report came out with the national corn rating 48% good/excellent, down 8% from last week. Trade estimates were looking for a decrease around 4-5%. Iowa came in at 62% g/e down 6% from last week. Missouri was the surprise of the release coming in at 18% g/e down 16% from last week leading the nation in the lowest rating followed closely by Indiana at 19%. Similar to corn soybeans came in down 8% with g/e rating of 45% nationally. Iowa beans are 59% g/e down 4% from last week. It’s been a tough growing season in Missouri as they lead the nation in the worst ratings not only in corn but beans as well with a rating of 18% g/e.  Needless to say lack of rain is really starting to be felt across the eastern corn belt. Poor condition ratings and minimal rain in the 5 day weather forecast has opening calls higher across the board.

July 2nd, 2012 Morning Market Commentary

Good morning!

This is still a weather market and the weather still appears to be friendly.  We are off our highs this morning, but are still showing double digit gains in both corn and soybeans.  There were a few scattered showers over the weekend.  Nice to see – but they were scattered at best, not a big help to the crops there, the East is still in desperate need of a soaker (along with cooler temps).

The outside markets are currently mixed to a maybe a touch bearish to our grains.  All eyes will be on weather forecasts today and assuming there are no major changes we should trade higher all day.

Corn is 20 to 24 cents higher
Soybeans are 20 to 22 cents higher

Have a great day!

3-day Rainfall Totals, concentrating on the East: