Follow by Email

Friday, August 31, 2012

Good morning!

It is the Friday before a 3-day weekend and we are seeing a little profit taking across our markets this morning.  Russia had their “Food Security Council” meeting last night – their Deputy Prime Minister said they will not limit grain exports and will firmly oppose any thoughts of export restrictions.  This is adding pressure to the markets.

The outside markets this morning are a bit friendly, the Dow, crude oil and gold are higher while the dollar is weaker.  Bernanke’s speech is today which could affect those markets although there isn’t much expected to change with this being an election year.

Other than that, there isn’t much to go on.  Corn harvest is quietly progressing and yield reports are all over the board.  The next USDA S&D report is out Sept 12th, we will probably have to wait until then to get new fundamental data to trade on. 

**Reminder** -no markets Monday due to the Labor Day holiday.

Corn is mixed, down a penny to up a penny
Soybeans are down 5 to 8 cents

Thursday, August 30, 2012

Good morning!

After yesterday’s sharp rally higher in our corn and soybean markets you could almost expect some profit taking today, but that really hasn’t been the case as both corn and beans hover around steady.  Yesterday’s rally could be credited to the wheat market as news of Russia implementing an export ban surfaced (dry growing season).  Now, the Russian Ag Minister is stating that there is no need for an export ban.  This has cooled the wheat market off, but I am not sure how many people actually believe it.    

Weather reports for the corn belt are fairly quiet – parts of MO, IL OH, and IN will get some rain from Isaac (1-3”) through the end of this week.  High winds from this storm do have some traders nervous – we do not need what corn is out there to be blown to the ground.  There are some hot temps across the belt nearby, but temps turn to average quickly and next week cool off even more. 

The USDA released some export sales numbers this morning, corn appears to be a touch light on new crop corn exports while beans appear to be within the range of guesses.  Both corn and soybeans experienced net cancellations of old crop exports (negative numbers) but the old crop marketing year is almost complete so this isn’t big news.  Corn rationing stories continue to surface in nearly all demand sectors.  While some areas continue to forge ahead crushing corn (as of today), the outlook looks bleak.  For example, an economist from Purdue University is projecting hog producers will be losing $60/head by January – this would be an all-time record high.

Financial markets are quiet, Bernanke will give his annual speech at the Jackson Hole economic summit tomorrow, everyone will be listening for the slightest hint of an additional economic stimulus.  Jobless claims were out this morning and came in as expected.

Corn is up 1 to 2 cents
Soybeans are steady to up 1 cent

Wednesday, August 29, 2012

Good morning!

There is support in our market today, with born corn and soybeans clocking in gains overnight.  Technically Dec corn looks like it is ironing out a short term bottom – today’s action so far could be viewed as a reversal (making new lows for the move, but now trading higher). 

The USDA came out yesterday projecting that U.S. farmers will make a record profit this year. Higher prices plus crop-insurance payments are said to outweigh losses from the drought, taking farm profits up to $122.2 billion this year (3.7% higher than last year).  In particular it is the corn and soybean farmers who are the ones with the record income (guys with a crop have high prices, guys without a crop have insurance).  The livestock farmers on the other hand (dairymen and ranchers) will see income stay flat due to rising feed costs (up 13%). 

Fundamentally in our markets to there just isn’t much to talk about.  There are a couple friendly news stories out on soybeans.  First, the American Soybean Association says that US exports to SE Asia will be up approx. 12% in 12/13.  Also there was an Ag Industry Conference in Thailand recently (yesterday?) where the idea that Asian demand will continue to rise for soybeans (and meal) was tossed around.  If this Asian soy product demand is truly continuing to increase, the bean crop in South America (planting will start next month) will be as important as it has ever been.

Corn is up 5 to 7 cents
Soybeans are up 7 to 10 cents

Tuesday, August 28, 2012

Good morning!

Tropical storm Isaac is approaching New Orleans, now expected to be a Category 1 hurricane – it should be over land this evening.  The export houses are all shut down in preparation and 40% of the gulf’s oil production has stopped.  Heavy rains will push up into parts of the corn belt from this storm.  This is viewed as a bearish to grains by some traders because of the long term possibility that the dry pattern we have been stuck in is finally changing.

Other than that, there isn’t much to talk about.  Export news is relatively quiet, however the USDA did confirm this morning that China bought 110k tons of soybeans for the 12-13 crop year.  Outside markets are quiet also, it appears the financial world is waiting for Bernanke’s speech later this week. 

Corn is steady to down 2c
Soybeans are down 7 to 10 cents

Have a great day!

5-day QPF:

Monday, August 27, 2012

Good morning!

Our markets are higher this morning, led by soybeans.  The soybean market is reacting to the change in direction of tropical storm Isaac, due to hit just East of New Orleans on Wednesday likely as a Category 2 or 3 hurricane.  This probably means harvest delays for the Delta soybeans which is rallying soybean futures prices.  Isaac will also shut down oil rigs in the gulf, which strengthens crude oil and other energies. 

Nice rains fell across the corn belt over the weekend.  Too late to benefit this year’s crops but it  helps replenish soil moisture for the winter wheat. 

Friday afternoon Pro Farmer estimated US corn yield at 120.25 bpa with a production of 10.478bb (USDA was at 123.4 & 10.779).  They estimated US soybean yield at 34.8 bpa with a production of 2.6bb (USDA was at 36.1 & 2.692).  The next USDA S&D will be released Sept 12th

Corn is 2 to 4 cents higher
Soybeans are 15 to 18 cents higher

Friday, August 24, 2012

In recognition of plant health issues, FC has reduced corn drying rates nearly 50% to 2.5c per point to help farmers get in the field and capture every bushel that they can. This rate applies to new crop corn delivered by September 30th.
Good Morning!

The corn and soybean markets are recovering well this morning after yesterday’s sell-off. You can credit the drop in prices yesterday to technical profit taking which sped up as the day went on and prices broke through support levels.  Prices were also pressured from Pro Farmer rumors/estimates as better than expected corn yield in Illinois and Iowa.  The soybean market felt tippy yesterday as domestic nearby bean basis slipped, triggering long liquidation.

Today feels a little different.  There are whispers in the marketplace that China was an active buyer of US soybeans on the break yesterday which is supporting beans.  This is not a shocker, as they have been consistent buyers on any market setbacks.  Again, the US is the only supplier of soybeans left in the world for China until SA harvests in Feb/March.  Nothing new to report on corn yet this morning, it seems to be a reluctant follower of soybeans so far.

Pro Farmer’s final number will be released this afternoon, around 2pm.

Corn is up 3 to 6 cents
Soybeans are up 12 to 18 cents

Thursday, August 23, 2012

Good morning!!

Our grain markets are lacking direction once again this morning.  Pro Farmer results are still trickling in, Illinois corn yield came in above the USDA’s estimate and they are finishing up Iowa today – early numbers out of Iowa suggest this crop could be a little better than the USDA had guessed as well.  You mix those numbers in with the poorer than estimated numbers from the Eastern and Western areas and nobody really knows what to think. 

This tour is  not meant to be compared to the USDA numbers, but that of course happens anyways.  It is worth noting that the PF Tour doesn’t cover the entire belt, below is a map showing the areas they cover.  They are colored by days 1-4, with the last day taking place mostly in Iowa (today) colored in red.

The outside markets are a non-factor this morning with the dollar a touch weaker, financial markets mixed and crude oil slightly higher.  The ethanol mandate is still being discussed with a wide range of groups asking for the EPA to suspend it for a year while Governor Branstad is asking them to keep it running.  We still don’t think anything will happen before the election and even after that – it is still unlikely to be changed.  The market will probably have to do the job of rationing demand on its own.

Weekly export sales were out this morning, we see strong exports for both old and new crop beans, while corn came in line with expectations.  Flat price rallies seem to have little effect on soybean exports.  New crop spreads may need to rally to do that job (larger inverses).

Corn is 4 to 6 cents lower
Soybeans are 1c higher to 2c lower

Tuesday, August 21, 2012

Good morning!

The soybean market is on fire again this morning, both soybeans and soybean meal have made new all-time highs.  Soybean meal actually made new highs during the trade yesterday and again overnight/this morning, leading the charge.

Generally, there are a lot of positive inputs this morning, weather is bullish (drier), outside markets are bullish, the strong close yesterday now has the charts looking friendly for the technical and Pro Farmer Tour is out making noise that the bulls are eating up. 

Re: Pro Farmer -- long story short pod counts in Ohio and South Dakota look lighter than expected – (it is too early to get yield #s).  Corn yields in Ohio and South Dakota seem to be coming in below estimates as well, 110.5bpa for OH and 74.3bpa for SD. The USDA bpa was at 126 and 98 respectively.

More news will continue to come out today and tomorrow – as you may remember from previous years there are two groups of scouts; one starts in the west, the other in the east – meeting in the middle later this week.   

Corn is 4 to 6 cents higher
Soybeans are 20 to 28 cents higher

Monday, August 20, 2012

Good Morning! 

Our corn and bean markets are higher this morning while wheat is a touch lower.  Pro Farmer has their annual crop tour taking place this week.  They will help the market better define just how poor the US corn crop is and just how improved the US bean crop it. 

Global commodity markets don’t have a whole lot of direction this morning – but if you want to talk about Europe: Spanish bond yields continue to drop, which is really positive for the outside (equity) markets, offering a bunch of stability to the market.  This should keep the financials strong and support most commodities (energies, metals, grains, etc). 

So for today (any maybe for this week) corn and beans could remain choppy on little new news.  Soybeans will have support from strong demand, resistance from an improving bean crop.  Corn will have support from early (poor) yield reports and resistance from fund selling and talk about the US importing corn.

Corn is 3 to 5 cents higher
Soybeans 8 to 12 cents higher

Friday, August 17, 2012

Good morning!

Our markets are mixed to higher so far this morning on very little news.  Continued strong demand for soybeans has the soybean complex higher.  There are trade concerns regarding the Black Sea region’s grain production with many people thinking the Russian government will put restrictions on exports at some point, maybe this fall.  That is supporting wheat this morning.  The strength in wheat and soybeans is helping keep the corn market from falling lower.  Corn appears to be in a range bound, sideways to lower pattern as we wait for new direction (likely to come from the Sept USDA S&D report). 

The Pro Farmer crop tour will start up next week – it will be interesting to see their results on soybeans, the weather so far in August has likely improved yield…

Corn is mixed, 1c lower to 1c higher
Soybeans are 8 to 10c higher

Thursday, August 16, 2012

Good morning!

There were portions of Iowa, Minnesota and Wisconsin that got some nice rains last night – and this knocked our markets lower in the early morning hours.  Since then, both corn and soybeans recovered to trade higher but are now chopping around lower.

The USDA released its weekly export sales report this morning, corn numbers came in a little below expectations while soybeans were above guesses.  At first glance, this looks bearish to corn – but it is important to note that we are still exporting old crop corn (not much, but it is happening), long term this could mean we have additional rationing to do. 

The cash markets are still strong for soybeans, there are huge crush margins domestically and strong world demand out of the U.S. as we are the only game in town.  Cash corn markets are also strong.  Ethanol plants that are running look to be operating at a profit today, due to DDG prices (the high cost of soybean meal is driving them up) and corn oil prices being higher.  This also indicates we may need to work corn prices higher if demand needs slowed further

Outside markets are quiet, crude is around unchanged while the dollar and the dow are a touch higher.  It is interesting to note that average ground beef prices in the U.S. reached an all-time record high for the month of July at $3.085.  June was $3.007 – before June the average cost of 100% ground beef had never been above $3.00

Corn is steady to down 2 cents
Soybeans are down 5 to 7 cents

Friday, August 10, 2012

Good morning!!

The much anticipated August S&D report was out this morning…

To put it simply for you, they drastically cut yield in both corn and beans, actually dropping production levels below the average trade guesses on both commodities which at a glance could/should be viewed as friendly.  The trade was expecting a yield on corn of 126.2bpa, with a production of 10.971bb and a carryout of 660mb (the USDA gave us a 123.4, 10.779 and 650).  The trade was expecting a yield on beans of 37.2bpa, with a production of 2.786bb and a carryout of 130mb (the USDA gave us a 36.1, 2.692 and 115). 

They slashed demand numbers to hold those carryouts above positive.  Cutting demand shouldn’t be much of a surprise but as severe as they projected it this morning -- it indicates that demand rationing has begun already and should continue to happen.  Will it take higher prices for these numbers to come true, or are these price levels “enough”?

Long story short, it appears that the market expected these numbers – the yield came out a little light but when you look at the bottom line (carryouts) this looks pretty much neutral.  “Buy the rumor sell the fact” once again on corn – the rumor was that the crop was horrible (10.97bb) the USDA confirmed that (10.78bb) to be fact and the market is now selling off.  Overall I think the underlying fundamentals are still bullish, but we will now wait till yield reports start coming in the fall for fresh news…

Corn is down 4 to 6 cents
Soybeans are up 12 to 15 cents

Thursday, August 9, 2012

Good morning!

Corn traded to all time record highs last night.  With the USDA’s monthly S&D Report coming out tomorrow morning (7:30am) it feels that there may be end users out there looking to buy corn on the board today, in fear of a bullish report tomorrow.  There are a few early yield reports that look very poor (corn picked this early usually is) so that could add to the strength of the market.  But really there isn’t a “new” story to talk about today.  This is just a thin, pre-report style of trade.  This report tomorrow will likely give us a price direction for the market between now and harvest (which is coming sooner that you think), so all eyes will be on it.

As for weather, there was another small system of rain that moved through the WCB yesterday, this rain missed the SE part of the corn belt, along with the central and southern plains – generally speaking everywhere else received 0.1’’ to 0.75”.

Corn is up 5 to 7 cents
Soybeans are up 8 to 12 cents


Wednesday, August 8, 2012

Good morning!

Our markets are mixed to lower this morning, beans had a fairly wide range last night, trading a dime higher to nearly a dime lower and is currently back higher again.  The uncertainty surrounding Friday’s USDA S&D report is probably triggering some profit taking (long liquidation) and is making it difficult to introduce any new speculative buying – giving the market a bearish tone overall. 

The weather also feels a tad bearish this morning as small rains fell across the WCB overnight and the forecasts show improving chances for rain over the next 2 weeks.  The outside markets are a negative input this morning with the DOW & crude oil under pressure while the dollar bounces higher. 

Corn is 2 to 3c lower
Soybeans are 4 to 6c higher

Trade estimates for Friday morning’s report vs. July USDA numbers (ending stocks):

Trade estimates for Friday morning’s report vs. July USDA numbers (yield/production):

Tuesday, August 7, 2012

Good morning!

Our corn and soybean markets last night opened the session lower – reacting to the weekly Crop Conditions report.  Corn dropping 1% in the G/E category while beans were unchanged.  The grain markets started to recover as drier weather forecasts were released. 

There are two weather models that are widely followed, the European model and the GFS model.  The European model was bullish as limited rainfall along with high heat is projected.  Meanwhile the GFS model looks unchanged from yesterday with cooler/wetter temperatures in the 11-15 day forecast.  The 6-10 day remains near normal to above for temps and near normal to below for precip.

The outside markets are a touch supportive this morning as the dollar slips while financial markets are moving a bit higher. 

Corn is steady to 1c lower
Soybeans are 8 to 10 cents higher

Monday, August 6, 2012

August 6th Crop Condition report

Good morning!

Our markets are weaker this morning as widespread rains fell across the Central US over the weekend, generally coverage was between .10-.50” with some of our local areas here in Iowa getting a more meaningful 1” rain.  High temps were at or slightly above average.  Soybeans are sharply lower this morning but it is worth mentioning that they have bounced back nicely, they were down over 50c at one time overnight.

We are currently 96 hours away from the USDA’s August S&D report – after that gets released this Friday we should have a much clearer cut idea as to where prices may be trending into harvest.  Honestly, there are few (if any) people who have a clue as to what transpired over the past few months – in both supply and demand. 

Corn is 6 to 8 cents lower
Soybeans are 30 to 35 cents lower

Thursday, August 2, 2012

Good morning!

Our markets are lower again today on very little new news.  The weather models this morning look relatively unchanged from yesterday – maybe a little wetter long term but that’s it.  There is a tropical storm forming in the Atlantic (expected to be named Ernesto).  This will likely delay bean harvest in the Delta which could end up being friendly to the bean market, but it could also bring rains to the Midwest which would be bearish to prices.  Time will tell as we watch this move.  It appears the longs in the bean market aren’t willing to wait around as they are selling again today as beans lead the charge lower.

The corn market appears to be stuck sideways to lower.  Nobody quite know what to use for a production number, yield is all over the board and harvested acres are a question mark as well.  1 week from tomorrow the USDA will release their August S&D report – this will be a big one.  They should have yield numbers broken out by state, which will be interesting to see.  A few private companies are coming in with their guesses but the most followed one (Informa) comes out with their guess tomorrow. 

Corn is down 5 to 8 cents
Soybeans are down 15 to 20 cents

Wednesday, August 1, 2012

Good morning!

Our markets are weaker this morning, but it was a wild night last night.  The range on Nov beans so far today is 40 cents, at one time last night sx was 19c higher, only to slip overnight as the forecasts turned a bit wetter.  Some of the weather models for the western Corn Belt are likely what caused the weakness (they are a touch wetter nearby) while the 11-15 day outlook actually looks drier.  This has some of the deferred bean spreads weakening as that crop may have a chance to be OK.  The funds are ridiculously long in soybeans, if the weather does turn, it will be hard to keep these prices.

The outside markets aren’t too much of an influence this morning as the dollar is higher while crude oil and the DOW are also slightly higher.  Call that a mixed input to slightly friendly.  One other factor weighing on our markets is a Russian wheat estimate showing a larger wheat crop than estimated. 

Corn is 4 to 6 cents lower
Soybeans are 8 to 10 cents lower

5-day QPF: