A.M. Grain Market Comments 10/11/2012

The Oct 11 USDA Report and the numbers we are all watching are the projected carry-outs for next summer. 

CORN – 619mb

SOYBEANS – 130mb

The average trade guesses for those carryouts was 645mb for corn and a 134mb for soybeans so this report can be considered a touch friendly for both markets.  In general terms what this data confirms is that our markets need to continue to ration demand, especially corn.  619 million bushels is too tight. 

In soybeans the yield was bumped up by 2.5 bpa (now at 37.8bpa) compared to last month (August rains!).  This 226mb of extra production was not surprisingly offset by an increase in demand keeping carryouts snug.  Not wildly bullish but the general theme here is that any extra supply we find will be immediately soaked up by domestic crush and exports.

In corn they reduced our production number slightly, taking yield down 0.8 bpa to 122.0bpa.  In the September stocks report remember – they reduced our carry-in to this year by 193mb.  Both of these reductions in supply were offset today by a decrease in exports which kept the carryout relatively the same.  This carryout of 619mb brings our stocks to use ratio down to 5.6%.  All of this means that carries in the market will remain pretty much non-existent and basis/flat price should remain firm – all in an attempt to keep demand from increasing because we frankly don’t have the supply to spare.

So. General theme?  While this report isn’t overly bullish it confirms what we already knew in regards to corn – supplies are tight.  The story in beans is probably more about how the demand sector has will still be there to buy beans until SA harvests their crop.  From here till the end of the year the weather in SA will be watched closely. 

Currently

Corn is up 25 to 30 cents

Soybeans are up 28 to 33 cents

http://www.fccoop.com/markets/information.cfm

A.M. Grain Market Comments 10/9/2012

The word of the day today is “China” as the Peoples Bank of China has injected 42.14 billion $$ into their money market overnight.  All of this is an attempt to spur their slowing economy – China’s stock market is up 2% after this announcement.  Also, China is rumored to have bought (or has interest in buying) additional U.S. soybeans, which has the soybean market sharply higher.  U.S. soybean meal basis has firmed up as well and sure enough: rumors of meal exports are floating around. 

Other than that, the newswire is quiet.  The USDA S&D report is out Thursday morning, the weekly harvest progress will be out this afternoon. 

Currently

Corn is up 4 to 6 cents

Soybeans are up 12 to 15 cents

http://www.fccoop.com/markets/information.cfm

A.M. Grain Market Comments 10/8/2012

Our markets are weaker this morning, led by the outside markets.  Crude oil is down over $1/barrel and the dollar is bouncing sharply higher.  The dow is also weaker over concerns of an economic slowdown in Asia.  This should make it difficult for our grains to rally today.

China was on holiday all of last week, returning today.  It will be interesting to see we see any additional export sales to China this week…

Today is Columbus Day, the banks and government offices are closed but our markets are open.  The weekly crop progress report is delayed till tomorrow because of this holiday.

Currently

Corn is down 5 to 7 cents

Soybeans are down 8 to 10 cents

http://www.fccoop.com/markets/information.cfm

A.M. Grain Market Comments 10/4/2012

We haven’t been able to say this for a little while, but our markets are higher this morning.  Yesterday the soybean market made a big comeback, early in the session they made new lows for the move and the came all the way back and closed around a penny higher.  Technically this could be viewed as a reversal and is a sign that the selling is done for now.    

The outside markets are helping continue that positive momentum -- overnight the European markets bounced higher, weakening our dollar and strengthening all commodities.

This morning the USDA released their weekly export sales report. The trade was already expecting a big export number on soybeans (around 30 million bushels) and they came out with a whopping 47.6mb!  This is no doubt friendly and beans are currently trading near their highs of the day. Corn exports came in in-line with expectations, which weren’t much.

The extended weather forecasts have turned wetter for mid-month.  Decent (1-2”) rains could show up across the belt, helping replenish the bone-dry soils in Iowa and Illinois.

Currently

Corn is up 5 to 7 cents

Soybeans are up 28 to 30 cents

http://www.fccoop.com/markets/information.cfm

A.M. Grain Market Comments 10/3/2012

Soybeans once again are under pressure.  It sounds like a broken record but so far this morning they are leading the charge lower on ideas that those August rains were more beneficial than originally thought to yield. 

FCStone came out with their projections on crop sizes late yesterday.  They had production numbers higher than what the USDA said in September for both corn and soybeans.  Finding an additional 97mb of corn and 215mb of soybeans.  The corn # could be viewed as surprising but the beans are in line with what we have been hearing for the last 10 days.  Either way this is just a private estimate, one of many.  The USDA will grace us with their number next Thursday and that will be what we trade on for the next 30 days.

There are a few stories hitting the news wire that could help establish a bottom in the soybean complex.  Soybean oil has been getting hit hard lately (thanks to Malaysian palm oil falling apart) but this morning the USDA says that we exported 21k tons of soybean oil to China. There are also rumors that 2-3 cargoes of soybeans were sold to an unknown destination late last night (likely China there too).  So.  Low prices cure low prices and these low soybean are doing nothing to curb demand, they may actually be stimulating new demand.  Time will tell on that.

Soybean planting in South America seems to be going along OK.  There are some warmer/drier forecasts that are causing a little concern throughout parts of Brazil, including Mato Grosso.  This will be watched intently as the whole market structure on soybeans this year revolcvs around the idea that nearly all the US bean exports will be shipped by Jan/Feb, after that the demand shifts almost entirely to South America.  If South America fails or slips, things could get wild here in the US as they try to find additional supply.

Currently

Corn is down 5 to 7 cents

Soybeans are down 7 to 10 cents

http://www.fccoop.com/markets/information.cfm

A.M. Grain Market Comments 10/2/2012

Soybeans are under severe pressure again as traders continue to talk about better bean yields across the US and farmers are selling.  In September the USDA had the US bean yield pegged at 35.3bpa, there are wild thoughts out there that this yield could be somewhere between 37 and 40 bpa!  Not sure if that will happen, but with the USDA Production/S&D report out next Thursday (Oct 11^th) the private analyst’s estimates will start rolling in to the marketplace.  FC Stone comes out with theirs sometime today, Informa comes out Friday.

Harvest progress is still chugging along at a record pace.  Usually it takes till the last week in October to have corn harvest at 54% complete and that is where we were at as of September 30^th.  Bean harvest is also quick – we are 41% harvested which is more than double the 5-year average.  This all adds to the weakness.

Demand is still strong for beans, and it could gett stronger with this price break. Domestic crush margins are still strong, benefiting from weaker bean prices and a strong meal basis.  In September the US exported a record 76.7 million bushels of soybeans! The old record was 72.8 million.  Current export sales -- already on the books -- for the coming crop year is 782.2 million bushels (per the USDA).  On the September S&D report the TOTAL projected exports was 1055 million bushels.  That means that the US has already sold 74% of all the projected exports for the year.  If any new demand shows up in the marketplace we will need the bean yield to improve just to cover it. 

There isn’t a lot of news out for corn.  Yields are still a big question mark and the report next week could hopefully answer a lot of those questions. It seems that if soybeans weren’t falling out of bed corn would be steady/higher.  Any recovery in beans and corn should snap back quickly.

Currently

Corn is down 8 to 10 cents

Soybeans are down 28 to 30 cents

Have a great day!

@fccoopgrain

http://www.fccoop.com/markets/information.cfm

A.M. Grain Market Comments 10-1-2012

The grain markets are starting off mixed this morning with soybeans and wheat trading lower while corn is trading higher.  Friday’s stocks report was bullish corn – pushing it limit higher, and that strength is continuing into today.  This lower ‘carry-in’ into the 12/13 crop year just means that the October crop production (and S&D) report will be that much more important for corn.  The market hopes to find additional yield/bushels in that report because without that – demand may need further rationing.  One other note – because corn closed limit higher (+40c) Friday the limits today are expanded to 60c – although it doesn’t appear we will be testing that.

Soybeans were reluctant followers of corn on Friday and are giving some of their gains back today, down just over double digits.  But after putting 30c on beans Friday, only giving a third of that back is probably a good sign that we may be putting a short term bottom in the soybean complex.

This afternoon we will get to see the USDA’s weekly harvest progress report – it should show corn over half completed across the US. 

Currently

Corn is 4 to 6 cents higher

Soybeans are 10 to 12 cents lower

http://www.fccoop.com/markets/information.cfm