FC Market Morning Commentary for January 31, 2014

Good morning! 

The outside markets seem to be the first thing people are talking about this morning.  Currency markets around the world are weakening, which is stinging world equities while the $US rallies as investors flock to it (thanks in part to QE3 starting to slow).  Long story short - equities are lower (the Dow futures are down another 150+ points).  Not a good end to the week/month in the stock market, this would be the first monthly decline in the U.S. stock market since August.

 

China is closed today - their Lunar New Year beings today and will run through February 6^th.  This means the market will have near-zero participation from them while they celebrate their new year.  That doesn’t mean the market won’t be thinking about them as they hold the cards to the soybean demand out of both the U.S. and South America.  There has been a lot of chatter about three cargoes of beans that have already been loaded (and sailed) out of Brazilian ports this week.  If you remember, SA bean harvest was later than normal last year which helped US exports remain strong longer.  This year doesn’t appear to be the same…

 

Opening Calls

Corn down 1 to 3 cents

Soybeans mixed

 

Have a great day!

Dustin Weiner

@fccoopgrain

 

 

 

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FC Morning Market Commentary January 29 2014

Good morning!

The futures markets were lower in both corn and soybeans last night with soybeans leading the charge down thanks to continued rains in Argentina showing up in both the 6-10 and 11-15 day outlooks.  Southern Brazil also look great, while some spots in the northern and central regions look a little drier.  The weather in the US is really hammering logistics – there are barges on the Illinois River that will take around 30 days to get to New Orleans thanks to cold, icy conditions.  Also – the Port of New Orleans is closed today because of poor road conditions due to ice & snow.  This is mainly affecting the soybean export program and we may start to see the exports shipments reports (which is released every Monday) start to back off a bit. 

Tomorrow morning the USDA will release its weekly export sales report and once again – traders are expecting to see soybean cancellations from China.  If they show up it will be “as expected”, if not – we could see a little pop higher.

Opening calls

Corn down 1 to 3 cents

Soybeans down 4 to 7 cents

Have a great day!

Dustin Weiner 

@fccoopgrain

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FC Morning Market Commentary for January 23, 2014

Good morning!

Both corn and soybeans were higher last night on very little news.  The $US is sharply lower which is helping not only our corn and soybean markets find strength – but gold is also rallying (while equities are weaker).  China’s PMI strong indicator of overall Chinese economic strength) for January slipped down below 50 – which suggests contraction in their economy rather than the growth that the market has been used to.  This is the lowest reading in 6 months and no doubt has some people nervous regarding not just China’s, but the overall world economy. 

The soybean futures market has taken a big hit lately due to rumors about vessels destined for China being switched away from the US towards Brazil.  While those rumors have not yet been officially confirmed, soybean basis at the U.S. gulf has dropped sharply which gives a little credibility to the idea that sales are being cancelled. 

The corn market is hovering right around it’s 10 and 25-day moving averages.  Steady demand and slow farmer selling should keep this market from falling out of bed (for now).  This cold weather is not helping the cash market as ice problems delay river traffic and the farmer stays inside his house/shop.

Opening Calls

Corn 1 to 3 cents higher

Soybeans 4 to 6 cents higher

Have a great day!

@fccoopgrain

Dustin Weiner

FC Morning Market Commentary for January 22, 2014

Good morning!

Overnight the corn market was able to carve out some small gains and soybeans kept their head above water until just before 7am this morning when another wave of selling came in, allowing it to drip lower.  After yesterday’s big losses, March beans are testing their 200-day moving average of $12.76 this morning.  If that fails the next spot for support (on a chart) could be the January lows down around $12.65.

The story in soybeans hasn’t changed – it is all South American weather and the forecasts look good.  The main weather system in Argentina is supposed to occur later today into tomorrow with additional rains in the forecast for next week.  Yesterday’s soybean market was spooked by rumors of Chinese cancellations – no confirmation on any of that yet.  It is probably a little too early for boats to start switching…

The corn market is pretty quiet.  Most processor basis bids are flat/steady while gulf basis is slightly firmer.  With the recent (and familiar) downward trend in corn prices, producer selling has been limited.  This feeling of steady demand mixed with limited farmer activity could be what is supporting corn futures this week.  No – this probably isn’t something that will cause a sharp rally in corn but maybe it will help corn establish a short term bottom?

Opening Calls

Corn 1 to 2 cents higher

Soybeans 2 to 4 cents lower

Have a great day!

@fccoopgrain

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FC Morning Market Commentary for January 17, 2014

Good morning!

Soybeans are getting pressured on further confirmation of rains moving into Argentina this weekend.  Also, the cash market witnessed soybean basis back off a bit yesterday which was a small negative input.  Even with beans being almost a dime lower over night, they are still 27c higher on the week which would be the strongest 1-week move since late November.  Strong demand from both domestic crushers and China is what spurred this rally.

Later this morning a well followed private company will release their updated estimate on 2014 acreage intentions – their last estimate had corn at 91.8ma and soybeans at 81.9ma.

Monday is a holiday, so we are staring at a 3-day weekend. With weather forecasts in Argentina hanging over our heads the trade could get choppy as we get closer to the 1:15pm close. 

Opening Calls

Corn down 1 to 3 cents

Soybeans down 7 to 10 cents

Have a great day!

Dustin Weiner

@fccoopgrain

FC Morning Grain Market Commentary for January 16, 2014

AM Comments 01/16/14

Thursday, January 16, 2014, 8:17 am
Submitted by: Dustin Weiner

Good morning!

 

The weekly export sales report was out at 7:30 this morning and old crop soybean exports were at the bottom end of guesses – but the fact that we are still exporting beans when many in the market have been waiting for cancellations has caused the soybean market to pop higher once again.  When you couple these exports with yesterday’s record domestic crush numbers – the bean market should stay strong today - if beans close higher today, that will be the 6^th day in a row.  Corn sales numbers came out above the highest estimate which has also allowed corn to work higher.  Interesting to note on the trade in corn yesterday: the corn market was lower but open interest went up.  Meaning new shorts were piling on the corn market.

 

After the market paused at 7:45am, the USDA made a few more announcements.  First of all, another 465k MT of beans were sold to China (most of them new crop). Second, 126k MT of corn that was previously sold to “unknown destinations” (read: China) were cancelled.  This could take a little luster off the corn market.

 

The export news this morning is about all there is to talk about.  Argentine weather is still something to watch as this hot dry weather is supposed to relax a bit when we hit the weekend.  We did read this morning that Chinese spot soybean crush margins are running near break-even, which will be interesting to watch.

 

Opening calls

Corn 1 to 3 cents higher

Soybeans 7 to 10 cents higher

http://www.fccoop.com/markets/commentary_detail.cfm?CommentaryID=1983

 

 

 

FC Morning Market Commentary for January 15, 2014

Good morning!

The price action overnight was similar to what we have been seeing lately – corn steady/lower with soybean steady/higher.  The soybean market was up a nickel or so last night before settling back down to unchanged after an updated weather map showed some rain chances for Argentina next week.  The dry weather down there has forced some private companies to lower their estimates – mainly on corn.  The USDA has Argentina projected to raise a 25 MMT corn crop while some private companies are now pegging it between 18 & 25 MMT.  As recent as one month ago some predictions were as high as 32 MMT – so it is safe to say that the top end potential of that crop has been reduced.

NOPA will release their December soybean crush report at 11am today, the trade is expecting a pretty large (near record) domestic crush (163.9mb expected vs 160.1 in Nov and 159.9 last December).  If we get any surprises one way or the other the soybean complex will react accordingly. 

Opening Calls

Corn 2 to 4 cents lower

Soybeans mixed

Have a great day!

Dustin Weiner

USDA Report Recap for January 10th, 2014

USDA Report Recap

Friday, January 10, 2014, 11:45 am
Submitted by: Jon Setterdahl

USDA quarterly stocks and monthly supply/demand report highlights are as follows.  CORN: production at 13.925Bln as national yield declined to 158.8bpa.  Trade was expecting a 14Bln number. Carryout this year pegged at 1.631Bln with feed raised 100Mln and ethanol raised by 50Mln.  The Dec 1 corn stocks number was 10.4Bln.  The report is moderately friendly the corn market, particularly because most were expecting a crop size of 14Bln and a carryout of around 2Bln.  BEANS: not nearly as surprising with most numbers within expected ranges. Production at 3.289Bln with slight yield increase to 43.3bpa. Carryout left unchanged at 150Mln, as exports were raised 20Mln and domestic crush up 10Mln. Dec 1 stocks at 2.150Bln.

So to recap, corn moderately bullish and establishes short-term price support.  Beans as expected and short-term direction dependent on S.American weather and US export pace. 

http://www.fccoop.com/markets/commentary_detail.cfm?CommentaryID=1976

FC Morning Grain Market Commentary for 1-10-2014

Morning Comments 1/10/2014

Friday, January 10, 2014, 8:35 am
Submitted by: Kyle Lehman

Quiet overnight trade ahead of the USDA supply/demand report along with stocks estimates for December 1^st set to be released at 11 am. Commodities have made new contract lows the past couple trading sessions with the expectations today’s report will show a record crop in South America. The current average trade guess have corn production just over 14 billion bushels with ending stocks around 2 billion. There are really 4 things to focus on in today’s report: First, how much will crop size increase? The trade is expecting yield to increase to 161.3 bpa. Second, will the demand number change and to where? Soybean export sales are just under 1.5 bln bushels which is already above the USDA estimate so the obvious answer is soybean demand should increase. Third, what were corn stocks on December 1^st? This number gives a good idea of how corn is being used in feed demand. Current estimate is for stocks to be 10.79 bln bushels for corn and 2.161 bln for bean. And lastly, how much of this bearishness is already priced into the market? Since the last USDA report corn has been stuck in a range from $4.20-4.40 but this week we made new lows and are currently sitting at $4.10.

http://www.fccoop.com/markets/commentary_detail.cfm?CommentaryID=1975

 

FC Morning Market Commentary for January 9, 2014

Good morning!

The weekly export sales report was out this morning and it was disappointing for corn, beans and wheat.  All three commodities had sales numbers that were below the lowest trade estimate.  Soybeans were still trading positive after the report, but were 5c off of their overnight highs.  (Export sales detail below).  There have been a couple new soybean sales announced to China this week, meaning that next week’s report could look a little more friendly.

The rest of the day today will likely remain choppy with the report due out tomorrow at 11AM.  Corn futures are already testing the contract lows that were made yesterday.  The big question for yesterday’s report is – if the crop comes out bigger (which is expected) – is that already in the market?  Or will that just continue the push for lower prices?  Just over 24 hours from nowwe will all be a lot smarter.

Opening calls

Corn down 2 to 3 cents

Soybeans steady to up 4 cents

Have a great day!

Dustin Weiner

FC Morning Market Commentary for January 7, 2014

Good morning!

Average trade estimates are out for Friday’s big stocks/production/S&D reports from the USDA, traders are expecting both corn and soybean production to rise with soybean ending stocks staying tight while corn ending stocks balloon out a bit.  (details below).

In export news, the USDA announced this morning that another 350k MT of soybeans were sold to China for the current crop year (13/14).  This should lend support to a bean market that was lower last night.  Other than that – it is quiet.  Friday’s reports will eventually start to weigh on our markets, as traders remove risk prior to their release

Opening Calls

Corn steady/mixed

Soybeans 2c lower to 2c higher

Have a great day!

Dustin Weiner

Farmers Cooperative Company

Ames, IA

FC Market Commentary for January 6, 2014

Good morning!

Our markets look to start the day higher today – but don’t be surprised to see a choppy trade as fundamental news is lacking.  Index fund rebalancing starts Wednesday (it starts the 5^thbusiness day of year, goes 5 days – we know this because SEC rules require them to publish their rebalancing schedule in their prospectus).  This could lend a little support to corn as the funds have been short corn and will likely be buying some back.

The outside markets are a little friendly this morning, crude is up, the stock market up, Chinese markets are higher and the $US is steady.  This cold weather could also offer a little support as it increases feed consumption (lesser conversion rates) and also causes logistical problems that could force end users to pay up for quick ship grain.

Opening Calls

Corn steady to 2 cents higher

Soybeans 2 to 5 cents higher

Have a great day!

Dustin Weiner

FC Morning Market Commentary for January 3, 2014

Good morning!

There is only one piece of news to discuss so far this morning, the weekly export sales was released (details at bottom) and it showed strong soybean sales and poor corn sales that were made last week.  These soybean sales push the total commitments up above where the USDA has us projected for the entire marketing year (through August).  We are now to the point where “shipments” are more valid than “sales” with the thought that China can cancel at any time. 

Opening Calls

Corn steady to 1 cent higher

Soybeans 3 to 5 cents higher

Have a great day!

Dustin Weiner

FC Afternoon Market Commentary for January 2, 2014

Soybeans closed 22 cents lower to a six week low after beneficial rain fell across Argentina and Brazil over the past couple of days helping to alleviate concern for crop stress in areas that were hot and dry last week. DDG cargoes have dropped roughly $30/ton in the wake of China rejections which could pressure soybean meal prices going forward. After trading through the 200 day moving average the next support for March soybeans sits around $12.60 on the board and beyond that it would seem destined for the harvest low of $12.48.

Corn futures couldn’t hold on to early session gains with weaker soybeans and wheat dragging them 1 ½ cents lower. Corn futures tested key support at the contract low of $4.1850 with the expectations that next week’s USDA report will show a larger crop size and carryout. US corn production numbers have increased from the November S&D report to the final report in 7 of the last 10 years while final corn demand has been below the USDA December forecast 6 of the last 7 years.

Outside markets were bearish with crude lower while the dollar traded sharply higher. China’s PMI declined for the first time in 6 months to 51.0 from 51.4 indicating an economic slowdown could be ahead. Keep in mind any number above 50.0 represents a growing economy however the reduction from 51.4 represents it’s growing slower than the previous month.

Kyle Lehman

FC Morning Market Commentary for January 2, 2014

Good morning!

With no overnight session last night exact opening calls are hard to determine, although generally speaking our markets should open weaker, likely due to blurbs like this: “Additional light rains moved thru Argentina over the past 36 hrs with more light scattered showers expected over the next 72 hrs.  Northern Cordoba, northern Santa Fe and Entre Rios got some rain and should see more today.”

Other than that it is quiet.  The $US is higher again today, challenging the two week highs – normally this alone is bearish to commodities but interestingly enough gold is higher and crude oil is only slightly lower.  The weekly export sales report that normally gets released Thursdaymornings has been delayed until tomorrow, due to the holiday.

Opening Calls

Corn 2-4c lower

Soybeans 5-8c lower

Have a great day!