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Friday, September 28, 2012

A.M. Grain Market Comments 9/28/2012

Good morning!

The USDA released their quarterly stocks report this morning:
·       Corn -  988 million bushels
o   The market expected 1,128mb
·       Soybeans – 169 million bushels
o   The market expected 131mb

I don’t think the market had a good feel for where corn would come out – almost expecting a surprise, maybe even a bearish surprise.  This should be pretty bullish corn and corn spreads for the near term.  This lower stocks number indicates that demand for corn in the late summer months may have been greater than we thought.

I don’t think anybody expected a surprise in beans, the range of guesses was pretty narrow.  With the steady flow of exports and strong processing margins domestically it seems odd that we would find more bushels.  But it is what it is and this is bearish beans.  Maybe this $2 we took out of the market over the last couple weeks was already factoring that in?

Today expect corn and wheat (the report was bullish wheat as well) to lead the charge higher, dragging soybeans with it.  If the corn market decides to pump the brakes at some point and weaken up, soybeans could fall sharply.

The next big piece of fundamental news comes out in early October – the monthly USDA S&D report should have a good handle on crop size alongn with demand projections moving forward for the year.

Corn is up 17 to 20 cents
Soybeans are mixed, down 2c to up 2c

9/28/12 USDA United States Corn Stocks Chart

Thursday, September 27, 2012

P.M. Grain Market Comments 9/27/2012

Corn and soybeans both finished down today as funds continue to liquidate their longs heading into tomorrow’s report. Trade is nervous about this report as early harvested corn may inflate the ending stocks as of August 31st. Last year this report was bearish and then corrected in the next report. USDA is claiming they have this accounting error fixed but we will see for sure in tomorrow’s report. Soybeans found early support as the USDA announced 110,000 tons of beans sold to China for the present year. After beginning to show signs of demand recovery the corn market was slammed with news corn will be imported into the US as a few feed companies in North Carolina will import 827,000 tons of Brazilian corn. Even though we traded lower most of the day outside markets were supportive as the dollar traded lower and crude was up over $2.

Just a reminder the USDA stocks report is out tomorrow morning at 7:30 with average corn guess at 1.113 bln bu. and soybeans at 131 mln. bu.

Jim Chism Named CEO of Farmers Cooperative Company

Jim Chism will be FC's new CEO
starting on November 1, 2012
(Ames, IA) September 27, 2012 -- Farmers Cooperative Company (FC), the largest farmer-owned local agriculture cooperative in Iowa, today announced that Jim Chism, General Manager of Frenchman Valley Farmers Cooperative Inc. in Imperial, NE, will succeed Roger Koppen as Chief Executive Officer effective November 1, 2012.
In April, following nearly 40 years of service to FC’s combined companies, Koppen informed the board of his intent to retire; setting in motion the formal management succession strategic plan that FC’s board of directors and senior staff have had in place.
"Naming Jim Chism as Chief Executive Officer is the right step for FC," said Jim Showalter, FC's board president. "As Chief Executive Officer, Roger Koppen has served the farmers well, built a strong team and helped grow the business to where it is today. Fortunately, the board has always taken the matter of planning FC’s management succession very seriously and has had a formal management succession plan in place for years.”
 Following this plan, the board formed a search committee utilizing outside resources and counsel, and after careful consideration, selected Jim Chism as the next CEO of Farmers Cooperative Company. “Jim is a dynamic, innovative, and proven leader who will be committed to serving our members and securing FC's position as the leading agriculture inputs supplier and service provider," said Showalter.
 "I am honored that the board has chosen me to become Chief Executive Officer and continue the successful path that Roger Koppen has forged for the company," said Chism. "FC is well-positioned to capitalize on the significant opportunities before us, enhancing our products and services and - most importantly - creating value for our members. I look forward to working with our board of directors and with FC's most important asset – the employees, to build on this solid foundation, and move our business forward to best serve our members."

 Farmers Cooperative Company (FC) has corporate headquarters in Ames, IA and is the largest farmer-owned local agriculture cooperative in Iowa. FC serves over 5,500 members throughout our trade territory of over 3,000,000 acres. Members are served from our 60 locations by a 450 full time employee team. For more information, please visit

A.M. Grain Market Comments 9/27/12

Nothing new today as markets are once again under pressure from riots in Greece and Spain over EU austerity measures. With the report out tomorrow and world economic worries nobody is willing to take a side in commodities and we may not have a direction in the markets until after the report. Yesterday’s export sales had corn at 400 mt (4 train cars) the lowest since 1996.  Soybeans on the other hand are at unsustainable levels coming in at a staggering 29.4 mln bu. Harvest is projected to be 50% complete with delays in the southern Midwest for some welcome rains.

South American weather continues to look positive with moisture allowing planting to progress without any hang ups.

Corn down 9
Soybeans down 8

Wednesday, September 26, 2012

A.M. Grain Market Comments 9/26/12

Commodities and equities are both under pressure this morning – once again concerns over European debt have taken center stage.  The $US is making new highs for the recent move as the new austerity measures in Europe are causing strikes and protests throughout Spain and Greece.

Soybeans have led the way down lately as the funds continue to take a risk-off approach to the market.  Palm oil futures have been tanking (large stocks and negative world economics) which spills over into the soybean oil market.  South American weather still bounces around from bullish to bearish – today it looks bearish as most of the weather down there is favorable for soybean planting.

This Friday morning the USDA will release the quarterly stocks report, it could be a tricky one as early harvest could sway the numbers.

Corn is down 7 to 10 cents
Soybeans are down 17 to 20 cents

Tuesday, September 25, 2012

A.M. Grain Market Comments 9/25/12

All the talk this morning seems to be about the poor ref job in the Packers game overnight instead of markets as not many are willing to take a position prior to Fridays stock report. Beans are leading the markets higher this morning on news Brazil may be out of soybean export supplies, offering support to US soybeans. China's central bank is injecting 290-bln yuan into their banking system which has traders somewhat optimistic this may stimulate the Chinese economy. Expect a choppy week heading into Fridays report.

Outside Markets are supportive this morning with crude trading 87c higher, gold 10 higher, and the dollar weaker.

Stocks Projections:                         Corn                                      Soybeans

Average trade guess:                     1.113 (.887-1.261)            .131 (.110-.152)
USDA Sep 12 ending:                      1.181                                     .130

Corn 3 higher
Beans 11 higher

Thursday, September 20, 2012

A.M. Grain Market Comments 09/20/2012

Good morning!

Our markets are lower this morning along with most other commodities – weak economic data out of China and the EU are weighing on commodities today.  Crude oil has crashed, now below both the 50 day moving average and the 200 day moving average as the funds are slamming that market with liquidation.  We are also seeing some profit taking in our grains after yesterday’s rallies.

Ethanol margins have improved to the point where some of the plants that have been shut down since June (one in Indiana, one in Nebraska – both Valero) are beginning to operate again.  Long term this is friendly to corn.

The weekly export sales report was out this morning and it was horrible for corn, coming in well below the bottom guess of estimates.  Soybeans on the other hand had decent sales, which should support soybean prices today.

The projected weather over the next two weeks continues to be favorable for a quick harvest, which is bearish to both corn and soybean prices in the short term.

Corn is down 4 to 6 cents
Soybeans are down 5 to 7 cents

Wednesday, September 19, 2012

A.M. Grain Market Comments 09/19/2012

Our markets are higher this morning, led by soybeans.  The bears have had their way in the soybean market since midday last Friday but it appears the selling is taking a breather today as beans snap back nicely. Some traders believe technical buying/selling happens in threes – yesterday being the third day of selling.  As we get closer to the end of harvest, traders are watching for the seasonal ‘harvest lows’ to be put in as a time to buy.  Lately (last 15 years) this has happened during the first week of October.

The outside markets are pretty quiet this morning, energies are a touch lower while the $US and the financial markets are a touch higher.

In regards to U.S. soybean exports; all eyes are still on China.  Their crush margins are improving with this break in flat price but they are still believed to be negative.  The last couple days the trade has been talking about them dipping into their soybean reserves while waiting to see if South America raises a crop.  While that type of move is bearish to the market it is interesting to note that there are rumors this morning that China came in and bought 4 to 5 cargoes of US soybeans…

As for weather while there are a few decent rains in the forecast for late next week, it should be dry up until then and the forecasts look warmer and drier into the first week of October.  Pretty close to ideal.  The day after harvest ends the trade will be praying for rain/snow (anything wet) as we need to replenish subsoil moisture for next spring. 

Corn is up 5 to 8 cents
Soybeans are up 18 to 22 cents

 6-10 Day Precipitation Outlook for the U.S.

8-14 Day Precipitation Outlook for the U.S.

Tuesday, September 18, 2012

A.M. Grain Market Comments 09/18/2012

Good morning!

The soybean market traded down the limit (70c) yesterday, and today are down another 20-30 cents.  Same story today as yesterday: harvest pressure mixed with ideas that there are more acres out there than originally thought.  The market had already started selling off yesterday when these acreage stories came out, causing it to slam into the limit down move.

The weather forecasts look great for harvest – in Iowa both the 6-10 and the 8-14 day forecasts are calling for below normal temps and precip.  14 days from today is October 2nd, could harvest be done by then??

There were some small stories out yesterday regarding foreign countries purchasing US soybeans after the sell-off (Taiwan for example).  I did not see China mentioned – they will be a key factor in any rally potential.  Corn basis at the gulf did rally yesterday, which may be helping corn iron out a bit of a bottom here. 

Both corn and beans have slipped back into some strong report levels on the charts.  If we can hold these levels for a couple days the market may end up staying in a relatively narrow trading range until we get into October and see another USDA report.  The risk side of the equation involves the massive longs in both markets(especially the soybeans) – if they decide to sell again like they did yesterday, all bets are off. 

Corn is steady/mixed – down 1c to up 1c
Soybeans are down 25 to 30 cents

Monday, September 17, 2012

There is a plethora of negative news out today making it difficult to point fingers at which is to blame for the collapse of both corn and soybeans. First we started the morning session with harvest pressure built up over the weekend as good weather allowed for the continued quick pace of harvest. Across the Midwest yield reports are coming in better than expected for both corn and beans causing some long liquidation and profit taking.

Adding to the already bearish tone the FSA (Farm Service Agency) updated their monthly acreage report increasing corn acres 834,000 acres from the their August Report. As of midday funds had sold off 13,000 contracts of corn.

Soybeans locked limit down posting their largest percentage drop in a year and a half due to long liquidation, better than expected yields, and rainfall in Brazil allowing soybean planting to start. The FSA monthly report also increased soybean acreage 808,000 acres from the August report. At midday funds had sold approx. 15,000 contracts.

Harvest Progress
The USDA released their harvest progress estimates and as expected corn harvest is said to be 26% completed vs. last week’s 15%. Iowa corn crop is 22% complete up 12% from last week. The soybean crop is said to be 10% this week vs. 4% last week. Iowa soybeans are 6% completed up 5.5% from the previous week. Both corn and beans are well beyond the average harvest pace and continue to head for the record books.

Outside Markets
Perhaps the two largest stories occurred in outside markets today. Chinese markets were sharply down on news their GDP projections would be lowered yet again. On top of this there were rumors the SPR (Strategic Petroleum Reserves) will be releasing excess reserves into the supply chain and the white house responded with a statement claiming this to be false, however crude oil still took a dive to finish down over $2.00 a barrel.

Opening Calls
Corn Steady
Soybeans Down 10

Farmers Cooperative Company (FC) Announces Recipients for Freshman in Agricultural Business Scholarship

Farnhamville, IA - Farmers Cooperative Company recently named fifteen Iowa State University students as recipients of the $750 Farmers Cooperative Company Scholarship for freshman in Agricultural Business. 

Farmers Cooperative Company is committed to providing scholarships to students pursuing an education in agriculture. According to Roger Koppen, Farmers Cooperative Company’s CEO, “Farmers Cooperative Company is committed to supporting the youth of agriculture. It is critical to keep good, young people in the industry by providing them opportunities such as scholarships and internships.”

This scholarship is awarded to college freshman majoring in Agricultural Business who have a minimum cumulative high school grade point average of 3.0 on a 4.0 scale and who graduated in the top 25% of their high school class. Recipients demonstrate agriculture leadership through involvement in agriculture organizations.  Preference is given to applicants interested in a career in grain marketing, commodity merchandizing, agronomics, elevator management, or grain marketing analysis in a rural area. 

Farmers Cooperative Company has corporate headquarters in Ames, IA and is the largest farmer-owned local agriculture cooperative in Iowa. FC serves over 5,500 members throughout their trade territory of over 3,000,000 acres. Members are served from over 60 locations by a 700+ employee team.  Farmers Cooperative Company is committed to serving its members by doing for farmers what they cannot economically do for themselves.
Front Row LtoR: Kortney Wagner-Wappello, IA. Kaci Keitzer-Mediapolis, IA. Paula Kovarik-Calmar, IA. Kilah Hemesath-Decorah, IA. Anna Brandes-Gowrie, IA. Katie Klaes-Osage, IA. Ben Ashland-Spirit Lake, IA.
Back Row LtoR: Ryan Pfeiffer-Dawson, IL. Jensen Sandgren-Callendar, IA. Casey Jones-Spirit Lake, IA. Drew Mogler-Alvord, IA. Andrew Luzum-Decorah, IA. Nathaniel Harris-Eddyville, IA. Jacob House-Sabula, IA.
Not Pictured: Chad Frazer-Conrad, IA.

Thursday, September 13, 2012

Corn and bean futures closed higher after spending much of the day down or near unchanged. The late rally for both is attributed to the weakening of the dollar as the FED announced an additional bond buying program to help stimulate the economy. The QE3 comes in the form of buying mortgage debt each month on an open ended basis at the cost of $40 bln. Today’s move in the dollar is a new low and the lowest it has been since early May (chart below). Interest rates are expected to remain around record low levels until 2015 compared to earlier projections of 2014.

Good morning!

The USDA released their weekly export sales report at 7:30 this morning – solid exports for beans while corn came in at the low end of guesses.  Overall there was nothing in this report to entice a sharp reaction by the futures market. In other fundamental news, Russia’s prime minister came out and cemented the idea that Russia will NOT ban exports, placing blame on speculators for spreading those rumors. 

In outside markets, the dollar is slipping lower again today, which is friendly to commodities.  The potential for Moody’s to downgrade U.S. debt is helping push it weaker.  In world news, the riots in the Middle East are lending support to the crude oil market – causing crude to test its recent highs.  This situation has pretty much all markets feeling uneasy today. 

Other than that, this appears to be a quiet day in the grain trade, currently:

Corn is up 1-2c
Soybeans are down 3-4 cents

Tuesday, September 11, 2012

With today being a pre-report day, we aren’t expecting much action in the futures market.  There could/should be a lot of positions getting evened up, minimizing their risk of an overly bearish or bullish report tomorrow at 7:30am.  The only thing that may give us direction today would be the outside markets.  Currently they are a touch supportive as the financial markets are stronger while the dollar weakens. 

Corn is up 1 to 3 cents
Soybeans are down 3 to 5 cents

Monday, September 10, 2012

The morning started off with a choppy 2-sided trade in both corn and beans which quickly took a sharp dive lower around the noon session. December corn closed down 16c while November beans closed down nearly 18c. A combination of hedge pressure and fund liquidation heading into the Wednesday USDA report can be the blame of the quick sell off.

Midwest rains haven’t slowed harvest down much as the US corn crop is seen continuing at record the record pace. US corn is 15% harvested vs. last week’s 10%. Iowa corn is said to be 10% harvested vs. last week’s 5%. US soybeans came in at 4% harvested with Iowa soybeans still below 1% harvested.

Long term Midwest weather outlooks continue to look quiet allowing harvest to continue its record pace. Nothing to speak of in the 1-5 day outlook until a cold front moves in Thurs. bringing isolated showers across much of Iowa. Long term forecast is below normal temps and below normal precipitation.

Average trade guesses for Wednesdays USDA report.

US Corn Production:       10.380 (range 9.860 - 10.780)
US Corn Yield:                    120.6 (range 117.6 - 124)              
US Soy Production:         2.657 (range 2.510 – 2.739)
US Soy Yield:                      35.8 (range 34.5 – 36.7)

2011-12 US Corn Carryout:           1.044 vs. Aug 1.021
2011-12 US Soy Carryout:             134 vs. Aug 145

2012-13 US Corn Carryout:           592 vs. Aug 650
2012-13 US Soy Carryout:             109 vs. Aug 115

Friday, September 7, 2012

Good morning!

Our markets are weaker this morning, with soybeans leading the charge lower.  The rumors on beans is that China may be in the process of cancelling up to 5 cargoes of US bean purchases.  This morning in the USDA export sales report, corn sales were pitiful (again), only 25k MT vs an expected 200-350k MT.  Soybean exports were also below expectations, coming in at 526k MT when we were expecting 600-600k MT. 

Informa (private company) will release their production estimates at 10:30 this morning.  The trade is expecting negative numbers (read: bigger crop) on soybeans which is adding to the overall weak feeling in the soybean complex.  Corn production on the other hand feels like it could be a little friendly as early corn yield reports seem low.  The USDA will release their numbers on Wednesday of next week – these numbers will give the market direction as we head into the heart of harvest.

The outside markets aren’t much of an input this morning.  The US jobs report was out, showing we added 96k jobs in August, this is well below the 120-140k that was estimated. 

The 6-10 day forecasts show a warmer, drier pattern which should allow for corn harvest to continue its record pace.  (maps below)

Corn is down 3 to 5 cents
Soybeans are down 15 to 18 cents

Thursday, September 6, 2012

Gov. Branstad signs proclamation allowing overweight loads for harvest season
September 5, 2012
Gov. Terry E. Branstad signed a proclamation to allow the transportation of oversized and overweight loads  of soybeans, corn, hay, straw, silage and stover. The proclamation took effect on Sept. 4, 2012 and expires after 60 days.
“Many Iowans’ livelihoods depend on a smooth, efficient harvest season,” said Branstad. “I am pleased to sign this proclamation, which will allow the movement of Iowa’s commodities and help Iowa farmers during harvest.”
This proclamation applies to loads transported on all highways within Iowa, excluding the interstate system, and which do not exceed a maximum of 90,000 pounds gross weight, do not exceed the maximum axle weight limit determined under the non-primary highway maximum gross weight table in Iowa Code section 321.463 paragraph “5.b”, by more than twelve and one-half percent (12.5%), do not exceed the legal maximum axle weight limit of 20,000 pounds, and comply with posted limits on roads and bridges. 
This action is intended to allow vehicles transporting soybeans, corn, hay, straw, and stover to be oversize and overweight, not exceeding 90,000 pounds gross weight, without a permit, but only for the duration of this proclamation.
The Iowa Department of Transportation is directed to monitor the operation of this proclamation to assure the public’s safety and facilitate the movement of the trucks involved.
Good morning!

Currently our markets are mixed with corn and wheat higher while soybeans work lower.  Some private production estimates on beans came out late yesterday indicating bean crop size may actually be holding steady to increasing in size (the trade is/was expecting the USDA’s bean number to be reduced from last month).  That and weaker bean basis has the soybean markets stumbling a bit today.  Informa will release their crop estimates tomorrow – they seem to be the main private estimate that the trade watches closely. 

The trade volume seems awful light right now, which makes it hard to hold onto one direction (read: choppy).  Currently corn is higher based on some rallying in the outside markets.  Crude is up over $1, gold is up, the dollar is weaker, the dow is higher.  As thin as this market is, any break in the financials/equities and corn could be in the red – same as soybeans.

Weather models are still dry for parts of northern Brazil... it is too early to get worked up, but the world cannot afford a back-to-back drought in South America (their poor crop last year is a big reason why China is buying (or has bought) all of our U.S. soybeans this fall).

Corn is steady to up 2 cents
Soybeans are down 12 to 15 cents

Wednesday, September 5, 2012

Good morning!

Our markets are lower this morning on little news, with us having no markets Monday this almost feels like a Turnaround Tuesday.  Crop progress reports were out last night showing US corn harvest coming along at a record pace (expectedly so).  Even though some Delta harvest will be slowed due to the hurricane – we should continue to harvest corn at a record clip.    

One week from today is the USDA S&D report.  Throughout the day today we will hear different private analysts’ guesses on this report.  For example, Allendale came out already, pegging the corn yield at 118.2 bpa (10.326bb production).  Their bean yield was 34.9 bpa (2.602bb production).  None of these private numbers are true ‘market movers’ but they are all interesting to read. 

The deferred months in soybeans all rallied yesterday on stories about Brazil’s soybean planting issues (too dry, waiting for moisture) - it is extremely early to be concerned on that.  There are private forecasters showing Brazilian soybean production up 24% from last year!  This is an example of high prices curing high prices.  This huge crop in South America is an essential piece to the marketing puzzle as China is expected to flip-flop their imports from the US to SA as soon as the beans are available in Feb/March (hence the historically massive inverse in beans from Fall to Spring). 

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

Tuesday, September 4, 2012

Good afternoon!

Corn chopped around most of the day today as we continue to trade in the sideways pattern that we have been in since early August (see the cardinal & gold chart below).  Dec corn traded lower at one point today but ended up closing a nickel higher.  The yield reports that are coming in are still concerning, offering support on the bottom side of the range.  High variability is the norm right now, for every story about ‘worse than expected’ yields, we seem to have one that is ‘better than expected’.  Demand concerns on corn continue to offer resistance on the top side of the range. 

Soybeans traded in a wide range today, trading higher most of the day ending up gaining over a dime.  There were heavy rains over the weekend that could have been viewed as bearish but were likely passed off as irrelevant as this crop is too far along for additional help.  China was rumored to have purchased US beans over the weekend – if we can’t shut off exports bean prices will continue to trend higher.

For tonight, expect corn to open up steady while beans should be slightly higher

Dec corn daily chart:

Good morning!

Soybeans surged higher on the opening tick last night – pushing to a new all-time high.  The traders who are bullish keep reiterating the fact that these high prices are not slowing demand down for soybeans (inelastic demand).  The thought process now seems to be that if these record high prices aren’t rationing demand, why does the market need to move lower?  Statements like that are reasons why this market is choppy to the upside, as nobody is willing to go short.  A wild card in the soybean complex is yield/crop size – the USDA’s report on Sept 12th will help us figure that out.

Corn demand on the other hand is showing signs of relief, namely in exports.  Japan for example is reportedly still 60% uncovered in its Oct/Nov/Dec corn imports (for feed).  Due to these record high prices it is thought that they will be pulling this corn from Brazil and Ukraine instead of the US.  We need to see markedly more of this if we are to ration enough demand. 

This afternoon we have our crop ratings (irrelevant) and harvest progress numbers out.  US corn harvest is expected to show 10-12% completed.

Corn is 4 to 6 cents higher
Soybeans are 17 to 20 cents higher