The markets seem to want to consolidate at these levels for the holiday. Just a reminder that the grain markets are normal hours tomorrow, closed on Thursday, and open from 8:30 - 12:05 on Friday. GPC will not buy grain after the 12:05 close on Friday. The South American forecasts continue to look very good at the moment. Brazil's forecast is calling for nearly daily rains in the next 7 days with totals ranging from 2-5" range. Exports sales remain behind pace with corn 44% behind last year and beans 13% behind last year. We did have a bean sale announced this morning of 130,000 mt to China, which is routine business. It has been a while since we have seen any export sales announced. One of the big parts to the corn equation that I have mentioned recently is that funds were near record shorts on corn. On Thursday last week they were short nearly 250,000 contracts. Today they are short approximately 219,000 contracts. That means they covered over 30,000 contracts in 3 days and moved the market only 9 cents. Will they continue to cover shorts into month end or will they stall out? Corn harvest was listed at 90% complete and bean harvest was listed at 96 % complete last night.
Corn and beans both had some buying show up as we got into the afternoon after trading lower most of the morning. Export inspections were on the low end of expectations for corn at 25 mil bushel. Bean inspections were on the upper end of expectations at 78 mil bushel. Rumor’s remain that China and Japan had been in the market for corn this past week, but nothing was confirmed on the wire this morning. PNW basis continues to perk up for Jan, Feb. Local basis continues to firm on the front end as well as the processors continue to try and buy corn before it gets locked away in the bin until summer. Corn finished the day at 3.45 Dec. If we can break through 3.45 it would be friendly to the technicals and we could bounce to 3.56 Dec. That would potentially move another good chunk of corn into the market. Funds remain near record short corn and if they decide to bail on some contracts before month end it would help us get to that 3.56 Dec area fairly quickly. This week is a holiday week that typically has very light volume, but today that was not the case. For those of you with HTA's and Basis contracts, we need to be rolled or priced by next week.
Today was supposed to be a quiet trading day with a slightly firmer tone heading into a holiday week as the funds do some short covering. That was exactly the case waking up this morning until about 9:30 when we found some buyers. The week was shaping up to be pretty dreadful, but with today’s rally the Chicago board had corn unchanged and beans up 3 on the week. Basis has improved, so cash wise we have improved. I have been looking all day for a good explanation for this rally, but am yet to find any facts. Here are a few possibilities. On a political front, NAFTA conversations are starting once again and are rumored to be going better this time around. There are China rumors in the corn market, but nothing is confirmed. Forecasters for South America are looking for a dry December in Argentina, but December is a ways out and today things look good. Those are the potential bullish stories of the day. Beans are going to be the commodity to lead us back if we can make it happen, just as they did today. Funds are expected to be at record shorts on corn when the Commitment of Traders report comes out today. We all know how fast the funds can liquidate their positions when they change tune. One trader said today, “If this rally was on a Monday, and not a Friday leading into a short holiday week…it would feel much more like a real rally”. That might be a good way to sum it up, but next week will tell the real story.
Corn made a new low for the third day in a row as we approach my 3.35 Dec target. Some traders still think we could trade 3.25 and possibly 3.15. Export sales did nothing to help the cause as both corn and beans were below expectations. Corn exports were listed at 37 mil bu. Total commitments are now at 801 mil vs last year at 1,088 mil bu. Bean exports were at 41 mil bu. Total commitments are now at 1,197 mil bu vs last year at 1,414 mil bu. Both corn and beans continue behind pace, but look to be picking up for JFM. Low prices should be bringing business, but SA is back in our business come spring and summer. Informa was out today and was looking for larger corn acres at 91.4 mil vs last year at 90.4. They had bean acres at 89.6 mil vs last year at 90.2. All these signs just keep poking the bear in corn. What are we going to have to do to get these funds to cover their shorts? Weather issues are the easy answer for a quick change, but demand would help as well. The funds were short over 230,000 contracts as of yesterday and added more today. That is a total of 46% of our current carryout at the moment.
Beans managed to bounce back today after a few ugly days in a row. The October NOPA crush number showed a crush of 164.2 mln bushel, which was as expected. South American weather looks favorable at the moment, but some drier trends look to be developing. I would expect a volatile weather market as we get into the South American growing season. Corn traded a slightly new contract low of 3.37 Dec futures before trying to trade slightly higher. There was a very small 2 cent range today. The farmer is still selling corn at these levels and looking for a way to re-own it using options or straight futures. Basis continues to pick up on the board break, but we are starting to see a bunch of elevator interest at current levels. Once the business gets covered into JFM can the rail markets hold these types of levels or we will see a repeat of last year where basis improves initially, but cannot sustain. With large yields, a carryout pushing 2.5 billion bushel, and a slow paced export market at the moment I would say basis struggles once again. Be looking to get basis locked in between now and March similar to last year. Once the bin doors open again this spring it might be too late.
Corn breaks into a new low territory and finished right on the lows for the day. The funds continue to want to pile on the shorts for now. Yesterday they added nearly 10k contracts and today should be similar. We did have the USDA announce a small sale to unknown today. Cheap grain will add business and we need it! Beans also continued to work lower today after breaking through the 50, 100, and 200 day moving average yesterday. 9.63 Jan should be the next level of support for beans. South American weather continues to improve, which is also causing funds to liquidate some of their long position in soybeans.
Beans broke through their 50, 100, and 200 day average about 10:30 a.m. hitting sell stops along the way and finished the day down 13 cents. The main news story that caused the move was South American weather. Over the weekend Northern Brazil had widespread rainfall, which alleviated some concerns. There are also some thoughts that US soybean exports will be down 100-150 million from the current USDA guess. Weekly export inspections were close to expectations, but still far behind last year. Weekly bean exports were pegged at 77 mil bu vs 108 mil bu last year. Corn traded down 1-2 cents all day. Export inspections on corn were also slightly lower than expectations at 15 mil bu vs 27 mil bu last year. There just isn't much news to equal out that monster USDA yield they gave us last week. The only thing the bull has to go on at the moment is that the funds are still holding onto that large record short position. Harvest progress will be out tonight. Beans are expected to be 95% complete and corn is expected around 85% complete.
The good news today is the corn market decided not to break lower at this point. There are a lot of ugly levels being picked out by experts for low Dec corn targets to trade after yesterday's 175.4 USDA yield estimate. I have heard levels as low as 3.15, 3.25, or 3.35 Dec futures. I hope none of which will be achieve anytime soon. The good news we have going for us at the moment is that the funds are already at record short levels. If they would not have been at record levels shorts yesterday's reaction would have been much worse. Exports pace has picked up this month and we need that to continue. With a carryout of 2.487 billion corn it is going to be tough to find a spark to get this market to rally and find some buyers for a while. Basis is on improving as processors continue to worry about this crop getting locked away until summer. SA weather is also improving as Brazil sees rain and Argentina is seeing dryer weather allowing them to catch up with planting pace. US weather looks great for next week to finish up with harvest. Have a good weekend!
Yuck! The USDA threw another curveball today. Everyone was expecting an increase to the corn yield, but nobody expected a 3.6 bushel increase up to 175.4 bpa. That is better than last year’s record crop, which was at 174.6 bpa (what happened to those poor crop ratings). That puts the US corn production up a whopping 300 million bushel at 14.578 billion bushel! They also made a few minor changes to the carryout with feed usage up 75 million. They also raised corn exports by 75 million, which makes absolutely no sense to me when we are way behind pace. These changes put the carryout for 17/18 at a massive 2.487 billion bushel up 150 million from their October estimate. Corn was trading slightly higher as the report came out, but put in a new low at 3.4075 around 1:00 pm. Tonight’s close below the previous low of 3.425 sets us up for some more down side. 3.35 Dec may be the next target. On the bean side of the report everyone was expecting a lower yield number, but the USDA came out unchanged from Oct at 49.5 bpa. US production was pegged at 4.425 billion bushels about unchanged from their previous guess. The new carryout is estimated at 425 million down 5 million from Oct. Basis is starting to pop already on soybeans as the processor is worried about winter coverage very early. Corn basis is showing some signs of life also as the corn processor has little deferred coverage as well.
There was not much happening in today's grain markets as we await tomorrows report. Beans are right up against the 10.00 Jan futures heading into tomorrow as the market is expecting a slight drop in the bean yields. Corn just continues to hover around 3.50 Dec futures as the farmer continues to sell a few bushels over the scale ahead of the report. Most believe we will see the yield jump .5 to 1.5 bpa, but a neutral report may be friendly as the funds remain at record shorts. Export sales will be out in the morning. Today's ethanol crush number was the largest we have seen at 109.99 million bushel of corn. The other part to that is that even with the large grind, ethanol stocks still managed to drop 400k barrels on the week. That is some impressive demand for ethanol. Other news is quiet heading into the report. The two levels to watch tomorrow are the 10.00 Jan futures and the 3.42 Dec corn low. As always, with any kind of USDA surprise, both levels can be violated tomorrow. Be on your toes if you are looking to make sales or have some sell orders working if you have levels in mind you want to sell. We know how volatile these USDA reports can be.
Beans bounced off of Friday's beat down up 7 cents. Thoughts remain that the USDA will lower their soybean yield estimate. Corn tried to trade higher most of the day, but finished the day unchanged. Estimates were out today for the USDA report and had the corn yield at 172.4 bpa vs 171.8 in Oct. I am not sure that is high enough. The estimate of the soybean yield is at 49.3 vs 49.5 in Oct. Exports inspections did nothing to excite the market today. Corn inspections were at 17 mil bu vs last year at 36 mil bu. Bean inspections were 91 mil bu vs last year at 98 mil bu. We remain well behind pace on both corn and beans. Managed money is now short 202,763 corn and long 40,612 soybeans. Corn is nearing a record short and usually we don't trade record levels very long. If we can get through the report Thursday without anything "too" bearish, we may have a shot at breaking out of our range to the upside. Everyone is leaning towards a bearish corn report, so that always makes me question our thinking. The biggest issue remains finding demand. Harvest progress will be out tonight. Corn is estimated at 65-70% and beans are estimated at 90% complete.
Today was a perfect example of what takes place when we remain in a large carryout environment. Beans managed to rally 15 cents in the past 2 days on possible new month buying, but couldn't manage to hold the gains as we finished unchanged for the week. When carryouts are large, rallies remain possible, but they are typically brief and not sustainable. The good news for soybeans is that they didn't break through support at 9.81 futures. Everyone seems to be on the same page for the report next week as corn yields should increase and bean yields could slightly decrease, but it will still be a close watch as one never knows what the USDA has in store. Exports remain the other big watch at the moment. Soybean sales are equal to 50% of the USDA target vs an average of 64% for this time. Corn sales are the same story and are currently equal to 36% of the total USDA estimate vs an average of 45% for this time. To illustrate how much the Brazil bean exports are taking away from our US exports; there are some grain sources that think China will buy around 5.0 mmt of Brazil beans in the 4th quarter this year, whereas last year they only bought half that much. It has taken them a long time to work through their record crop and it is putting a big dent in US sales.
We have had a lot of things happen since yesterday's comments, so let’s try and get everything up to speed. Last night FC Stone came out and estimated the corn yield at 173.7 bpa, which was an increase from last month at 169.2 bpa. They estimated the bean yield at 49.9 bpa, which was unchanged from last month. Informa came out today and agreed that the corn would take a big jump and indicated 173.4 bpa. The USDA is currently using 171.8 bpa. Informa put the bean yield at 49.7 bpa, which was very close to both the FC Stone guess and the USDA Oct guess at 49.5 bpa. So everyone seems to agree that corn crop is getting bigger and the bean crop is still very good. The best news we had announced today was a massive corn sale to Mexico. They reported a sale of just over 1.3 mmt, 846k mt for this year and 510k mt for next year. That is just what the doctor ordered and is one of the top 10 largest single sales in our history. With that being said however, Mexico is our biggest importer of corn and this could be seen as routine business for the most part. Export sales this morning were on the low side of expectations for corn and on the high side of expectations for beans.
Both the corn and beans traded higher today as we remain stuck in the same ranges. Ethanol production was up for the 4th week in a row, which is about the only thing supportive for corn at the moment. As I mentioned yesterday, funds are near record shorts, corn export pace is very slow, and final corn yields are trending higher. The Nov 9th could potentially set up for a raise in the yield and drop in the exports, which could send us into new lows. If that is the case it could be a good chance to find a way to re-own sales we are forced to make during harvest. Just to paint a picture of how poor corn exports currently are; the USDA is currently forecasting 17/18 exports at 47 mmt vs last year at 58.3 mmt. Some fear this year could be as low as 42 mmt. That is a massive amount of corn to add to an already big carryout if we cannot pick up some more export business. SA supply remains the key factor on both corn and beans. We will need to see a hit to production to see any major changes.
The bean complex tried to trade higher most of the day, but finished at unchanged. Harvest progress on soybeans came in at 83% vs last week at 70%. Yield reports continue to be trending lower on beans. Another positive note is the crush margins in China are starting to pick up, so will they be back for more beans? The US farmer has been a big seller of beans though out harvest, but I would expect that to slow once the crop is in the bin. Corn traded lower the entire day as more corn yields are above expectations. US export demand remains sluggish, which could cause the USDA to lower their exports on the upcoming reports. Some thoughts are that US corn production could be up 50-250 million bushels. FC stone will be out tomorrow night and Informa will be out Thursday with their estimates. The USDA will be out on Nov. 9th. There just isn't anything too positive in the corn market at the moment. Look to make new lows in the coming weeks as open interest is picking up again as funds are adding to short positions.
Not much action today in the grain markets. Beans were slightly lower once again on improving Brazil weather, weaker Brazilian Real, and heavy South American farmer selling. Beans feel like we may be ready to test 9.50 support as we have been basically stuck between 10.00 and 9.50 futures since Sept 1st. With the Brazil currency crashing it is making US export less competitive once again. Export sales were very good for both corn and beans today. Corn was at 1.288 mln mt vs expectations of .750k - 1.25 mln mt. Bean exports were at 2.129 mln mt vs expectations of 1.25 - 1.60 mln mt. Both were very impressive, but we need that to continue. Corn yields remain better than expected in a lot of reports. Yesterday Dec 18 futures pushed up against 4.00 once again. Be thinking hard about getting started on some HTA's for next year’s crop. Nov 18 beans over 10.00 remain a good place to start there as well. Big carryout’s remain in the forecast for both corn and beans for the next few years, so if you can pencil a profit let’s get started. Carryout’s will not get much smaller until we have an issue with production and it’s tough to rely on weather issues.
Overnight markets had beans up 7 and corn up 3, but once again could not hold the gains throughout the day. 3.55 Dec corn and 9.83 Nov beans seem to be the level where the buying stops. Open interest on corn is now at 1.55 million contracts, which is the highest level since April 2011. The funds continue to hold record shorts as they feel the risk to move higher is limited with a 2.3 billion carryout. Farmer selling could also pick up as we are only 38% harvested at this point, which is another reason to hang onto shorts. Another factor of the large open interest would be trying to capture the large carries. The only way to truly capture the carry is to roll current HTA's or physically sell the deferred months. There is a lot of recommendations to get that done at our current carries. Bean spreads are also trading massive carries, so the same story goes there. Bean bass continues to be at harvest lows and seem to be in a funk. It might take a month or two to see a bounce back. Corn harvest is just beginning, but so far corn movement remains slow. Basis will hang tight until selling picks up or space fills up; whichever comes first. Should improve 1st of the year.
Harvest progress was out last night and corn was put at 38% harvested, which was lower than anticipated. 59% is the average for this time period, so we are way behind. Minnesota itself was only 14% harvested. Beans harvest made a big leap up to 70% harvested vs last week at 49% and an average of 73%. Yields continue to be better than expected for corn, so an increase to the USDA yield in November looks to possibly be in the cards. There seems to be more talk that China will need additional corn, but we are yet to see an uptick in business. There is hope that China will be adding an E-10 ethanol blend and will increase their corn use, which in turn will lower their stocks. Some have mentioned China could need imports of 5.0 mmt this year whereas last year they imported 2.7 mmt. It will be interesting to see how that plays out. For the most part farmer selling was very quiet today compared to yesterday. Weather looks to remain open for harvest in much of belt for the next 2 weeks with temps will be on the cool side.
Corn got within a half cent of its lows today at 3.43 Dec futures before mustering a nice little rally finishing up 7 cents on the day. This was a very solid key reversal once again as it seems as though funds want to buy that type of level for now. Beans seemed like they wanted to trade lower today, but the corn and wheat buying pulled them slightly higher as well. Export inspections were out this morning and listed beans at 65 mil bushel vs last year at 94 mil. Year to date bean exports are at 266 vs last year at 288. Corn exports were a small 13 mil bushels vs last year at 35 mil. Year to date corn exports are at 154 vs last year at 307. Harvest progress will be out tonight. Corn is estimated at 44% and beans are estimated at 64% complete.
There was more business announced this morning. 198k tonnes of beans to China (routine), 120k tonnes of corn to Spain (weird), and another 125k tonnes of corn to Uknown. Beans started the day higher and had a reversal as harvest pressure continues. Weather looks to get wet over the weekend over much of the belt. More rain in the east than in the west. They can have it! Corn yields continue to support the USDA number at 171.8 bpa. Already hearing yields bigger than last year in places, which could mean the USDA is still too low. The MN corn yield is going to be impressive to say the least. Even some of the northern MN yields are off the chart from early reports. Now all we need is the export business to improve to find a home for a massive amount of bushels. Basis so far is hanging tight on corn as farmer selling has been non-existent. Basis on beans remains very poor and weakening as the farmer is selling beans off the combine for some cash roll. For the week corn was down 8 and only 2 cents from the Dec futures low of 3.42. Beans were down 22 for the week after last week’s late rally.
The USDA announced a couple more corn sales this morning. The first one was 115,000 tonnes to Mexico and the other was 146,000 tonnes to Unknown. The weekly harvest progress report had corn at 28% complete compared to 22% last week. Bean progress was at 49% vs last week at 36%. We are definitely behind, but the market remains ok with it at the moment. Everyone knows this crop can come out very quickly with the equipment now days and for now the forecast looks good. Last week's 35 cent beans rally is not down to 19 cents. I think we have a chance to trade at higher some point, but harvest pressure is putting a hurt on the soybeans.
After a 35 cents rally over the last two days, beans lose nearly a dime. Once things dry out from weekend rains the 10 day forecast looks great to finish up bean harvest. Export inspections were solid for beans this week, but low for corn. The USDA had a bean sale announced to Unknown this morning of 224,300 tonnes. Brazil weather looks to be turning wetter later this month in the dry areas. That could have been part of the lower move today as well. The September NOPA crush came in at 136.4 million bushels vs an average estimate of 138.3 million, also slightly negative. Corn didn't do much at all today trading a 3 cent range. Harvest progress will be out tonight. Estimates have corn harvest at 30% and bean harvest at 49% complete.
Today was a very solid day of follow thru from the report. Export sales were great for both corn and beans this morning, which added some more support. To see beans settle above yesterday's high is a great sign. Today's bean market is the highest we have been since August 1st. This is a great selling opportunity on beans if you are undersold going into harvest. If you have space at home in beans don't be afraid to start looking at our bids for the summer months. Today at the close you can sell June/July beans for 9.45 cash. Those are some crazy cash carries if you have room at home to take advantage of those. Reminder that you cannot forward contract price later bushels. Basis continues to break on this rally, so the demand is still telling us this rally is not warranted. The close today as I mentioned was very good, so it will ultimately be up to the funds whether they want to continue to buy. Next week should be an interesting one. Don't fall asleep on this rally. This is a 35 cent move in two days in soybeans. Corn may not seem like it is up much either, but we are now dime off of yesterday's lows that happened ahead of the report.
Report day has come and gone with some fireworks in the grain markets. These markets have had everyone lulled to sleep for the past few weeks with such little activity, but today that changed in an instant. The surprise came in the bean market as the USDA dropped yield slightly to 49.5 bpa. As I mentioned before everyone was leaning very heavily towards an increase to our yield, which was why we seen such a big reaction to a relatively small change in the yield. Carryout was pegged at 430 million vs an average guess of 447 million. That is still a very comfortable amount. The fact that the USDA also increased planted bean acreage, which left production unchanged from the sept report at 4.431 billion bushels, leaves me a little skeptical that we can hold this rally. There are "experts" thinking we have a chance at 10.15 Nov futures off this news, but it better happen quick while the news is hot off the press and the money wants to buy. These same “experts” feel the world bean supply will continue to shrink, but if that’s the case we better see exports pick up. The USDA jumped the corn yield to 171.8 bpa vs their Sept guess of 169.9 bpa. That jumped the corn production to 14.280 billion bushels. Carryout on corn was pegged at 2.340 billion. That is a monster carryout to work though and not friendly corn at all. We did manage a very good reversal on the charts though. Before the report; corn put in a new low futures level at 3.42 1/2. That reversal higher should be friendly on the charts.
Report day is tomorrow as we look to get another update from the USDA on yields. Like I mentioned yesterday, most traders believe that yield is going to work higher. This morning we had a few announced sales, but we continue to remain behind pace. Mexico booked 150k tons of corn and 104k tons of winter wheat. China booked 264k tons of soybeans and we also had another 132k ton of soybeans to unknown. Corn harvest progress last night was pegged at 22% vs last week at 17% and an average of 37%. Bean harvest progress was at 36% vs last week at 22% and an average of 43%. We are behind pace, but the futures don’t seem worried at the moment. Crop ratings improved yesterday as well, which could be to blame for today's weaker markets. South American weather remains a watch, but it is still very early to get any type of market reaction.
Beans initially traded up 5-9 cents this morning on good export inspections, but harvest pressure once again leads the way. From what I have seen yields remain better than expected. I am hearing of a lot of beans are getting sold off the combine, which is where the pressure is coming from on the futures. Export inspections were out this morning (delayed from yesterday) and they were solid for soybeans, but corn and wheat didn't meet expectations. Harvest progress will be out tonight at 3:00. A couple private experts are expecting a yield increase on Thursday. Corn yield could be seen above 171.0 bpa vs last month at 169.9. Beans should also have a slight increase around 50.5 bpa. If that type of yield shows up, I would expect corn to test the lows at 3.44 futures. Beans have been very resilient to trade below 9.50 Nov futures. We still have another day and a half to wait and watch this market continue to mark time.
Hurry up and wait for the USDA report on Thursday at 11:00 am. The export inspections, crop ratings, and harvest progress are all delayed until tomorrow as today is Columbus Day and the Government is home sitting on the couch. There remains talk about harvest delays, but the futures don't seem to care as of yet. Beans were higher much of the morning, but couldn't manage to hold any gains. The Chinese are back off of their holiday, so hopefully we can get some business going. News is very quiet at the moment.
There was very little action in today's markets and new news was very scarce. More rain for the western belt over the weekend and then it finally looks like we might get a window. Eastern Nebraska, Iowa, S MN, and Wisconsin looks to be in for the heaviest amounts of rain. The after math of Hurricane Nate will be the next watch as that moisture looks to move up into the eastern Corn Belt. That could cause significant issues depending on the path and the amount of rainfall it brings to the eastern Corn Belt. Northern Brazil remains dry and Argentina remains too wet. Keep an eye on that as well as they are now planting. Beans should be the leader if we decided to rally this month. 9.95 Nov futures would be very stiff resistance to try and achieve. That is a mere 23 cents away. Have a good weekend. Also a reminder that the next report is Thursday next week, which will have an updated yield guess from the USDA.
Corn and bean prices traded higher most of the day as a Drier N Brazil forecast seems to help once again. Informa came out today with their projected yields at 170.5 bpa on corn and 50.0 bpa on beans. Not much of a surprise there up slightly from the USDA's last projections. There is some more talk of additional China soybean demand that would be more than welcome. It feels to me like we are once again stuck in these price ranges and cannot get out. Weekly export sales for beans were at 1.0 mmt, which put commitments at 23.3 mmt vs last year at 28.3 mmt. Corn weekly exports were pretty good at 814 mt. A total commitment on corn is now at 12.2 mmt vs last year at 20.6 mmt. That is way behind pace and basis levels continue to prove that. There is finally starting to be some talk of delayed harvest, which could support prices here as well. That is going to be real concern in our neck of the woods along with many others. Hearing lots of reports of corn still well over 30% percent moisture out here, so we are going to need good November weather to get this crop in the bin. Time will tell.
Overnight markets continued the lower trend and that continued throughout the day. Beans traded higher for a bit, but couldn't hold in there. Harvest progress last night was listed at 17% for corn. That is slightly behind the 26% average for this time. Bean progress was estimated at 22%, which is also behind the 26% average. There has been an abundance of rain in parts of the Midwest, which will slow harvest. The east however has been chugging along at a good pace. Informa will be out on Thursday, with their guess at what the USDA is going to say for yields on the October 12th report. That will be the next news to get the market moving. For now we are stuck at these levels. Concern remains high for both the corn and bean export business and weak basis levels continue to tell that story. Some are predicting that basis will get much worse during harvest, but I keep thinking to myself that the price is low enough. I guess the futures and the basis don’t care what we think. Cheap grain usually means more business, but that still hasn't showed up at these levels. South America remains the export market for now.
The rally off the USDA stocks report on Friday didn't last long and we closed lower today than we started on Friday. Harvest pressure could be partially to blame, but export business remains an issue. Even though the stocks were lower on the report the carryouts remain comfortable. Export business and weak basis values remain the biggest factor on the markets. Export inspections were out this morning and beans were at 32 mil bushels vs 41 mil last year. Season to date bean exports are at 146 vs 125 last year. The USDA goal for the year remains 2,250 vs 2,170 last year. Corn inspections were at 31 mil vs 58 mil last year. Season to date exports are near 115 vs 227 last year. USDA goal remains 1,850 vs 2,295 last year. Some feel that exports could be closer to 1,650. We did have a large sale of 597,464 tons of corn announced to Mexico this morning, but that remains routine business. This week looks very wet in the western belt, which will delay harvest, but things have been going strong in the east. Yields remain better than expected for the most part. Harvest progress will be out tonight. Let’s hope for some turn around Tuesday action tomorrow.
The USDA report was out at 11:00 and they actually had a couple of surprises. It was friendly for corn and beans, but not so friendly for wheat. They guessed the Sept 1 soybean stocks at 301 million bushels vs the average guess of 338 million. That was below the low end of the range of guesses. Corn was also below the range of guesses at 2.295 billion vs an average guess of 2.353 billion. When the report came out we were trading slightly lower, but then corn traded as much as a nickel higher and beans traded up 17 at one point. Corn finished up 3 and beans finished up 9 on the day. Wheat in Minneapolis was down 21 cents today as stocks were pegged at 2.253 billion vs an average guess of 2.205 billion. For the week corn was up 2 and beans were down 16. Harvest pressure should continue next week, so it will be interesting to see if we can sustain this rally.
USDA report tomorrow at 11:00 am. We had some more sales announced this morning. 234 tmt of corn sold to Unknown and 132 tmt of beans sold to Unknown. Weekly export sales of corn were at 12.6 mil bushels, which is way below what is needed. Weekly export sales on soybeans were excellent at 2.982 mmt. If you have HTA's and plan to roll them forward, be paying attention to the spreads. They are looking attractive. If you have questions on that please give me a call. Yields continue to come in better than expected. Tomorrows report will dictate the direction until the report on Oct 12th.
Wheat short covering seemed to pull corn higher today. Beans also had a nice recovery today after trading lower most of the morning. Friday's report will be the key. We did have another sale announced this morning of 132,000 tonnes of Soybeans to China this morning. The daily announcements since 9/5/17 have totaled almost 3.4 million tonnes of soybeans to China, Mexico, and Unknown. That’s a lot of beans, but we are still behind. Soybean oil broke yesterday and today on news that the EPA was requesting comments on reductions for the advanced biofuel volume requirements for 2018 and 2019. This put pressure on the bean market yesterday and this morning. It was good to see them turn around today, as some experts are predicting lower soybean stocks on Friday. I would guess we trade sideways ahead of the report the next couple days.
Corn harvest was pegged at 11 percent last night vs an average of 17. Corn ratings were left unchanged at 61 percent good/excellent vs 74 percent last year. If you want to try and compare our current ratings from last year it would suggest a yield of 169.9 bpa, which is very close to the current USDA guess. Bean harvest was estimated at 10 percent complete vs an average of 12. Crop ratings were up slightly last night to 60 percent good/excellent vs 73 last year. That same comparison would lead to a yield of 49.5. The farmer seems much more willing to sell 8.70 beans rather than 2.70 corn. Beans basis continues to weaken as harvest picks up. Corn basis continues to stay very weak as well as new business is not taking place. The USDA stocks report is Friday, which is not expected to be a big mover. There can always be surprises though.
Beans lost what they gained on Friday down 13 cents. This will be a big week for harvest pressure in the east and the south. The western corn belt is a ways off after the soaker rains over the weekend and also more in the forecast. Yields remain better than advertised thus far. Bean basis continues its downward slide as harvest is underway. The potential for Brazil rains improved over the weekend, which also added to the selling pressure today. Bean export inspections were solid today at 38 mil bu vs last year at 14 mil. Corn export inspections were way behind last year at 29 mil vs 52 last year. That is not much of a surprise as corn sales have been slow. Crop ratings will be out this afternoon yet I am not sure they matter much at this point. Harvest pace might be the bigger factor. The stocks report will be on Friday. I am not expecting a huge reaction to sway the markets, but the risk is we have more stocks than thought. The common theme is to carry corn into harvest for both the commercial and the producer this year.
Beans rallied nicely into the close, which surprised me as harvest pressure should be picking up in places. The 3 storylines remain positive bean exports, weather in SA could be causing planting delays (too dry in Brazil and too wet in Argentina), along with a wide a variety of yields to start out US harvest. Most yields I am seeing remain better than expected, but still less than last year. Like I mentioned yesterday, we will not have a USDA update in yields until October 12th. Farmer movement picked up today as we approach 9.00 cash beans. Resistance should be around 9.90 Nov futures. Corn seemed to just be along for the ride again today. For the week corn was about unchanged and beans were up 16 cents. Basis remains squishy at best as the processor feels comfortable as a few new crop beans are already being delivered. Rail bids remain very soft as well. Let’s see what next week brings as harvest pressure should pick up steam. Have a good weekend!
Beans battled back nicely today as exports sales this morning were huge. Export sales were listed at nearly 2.3 mmt, which was higher than expected. China remains hungry for beans as of late as there was another sales announced to them this morning. It is our harvest time and this remains normal routine business, but it is still encouraging to see these daily. Corn export sales were pegged at 11.0 mmt, which was lower than expected. Corn sales remain sluggish and that will likely continue for a while as South America remains the cheapest source by far. Fresh news remains quiet. Basis continues to pucker as bean harvest has begun in places and old crop corn is almost overwhelming. Next Friday the 29th is the USDA stocks report, which could potentially be the next market mover. We will not see any changes to USDA yields until the report on October 12th. I would expect a flat trade until we get to those reports.
Beans traded higher on more USDA export sales announced this morning. They announced a massive sale of 1.092 mmt of 17/18 beans (960k to Unknown and 132k to China). Yesterday they added rain to the Brazil forecast, but today that seems less certain, which added some support to beans. Corn and wheat seem to just be following along. Early yields in corn remain better than expected. Early yields on beans remain close to the USDA guesses on yields.
The grain markets were lower today as the Brazil forecast looks wetter in both the near term and long term forecast. Last week there were ideas that Brazil planting would be delayed due to dryness. Now they have rain forecasted for next week along with more in October. Another factor is that early yields continue to be better than expected in Illinois and Iowa, although not as good as a year ago. We have continued to see more export sales announced daily, but we are still way behind and that is starting to get noticed in the futures market. Corn is in a much worse situation than soybeans as the US is not very competitive with South America until the New Year. At these basis and futures values the farmer is going to pack the bins tight and the elevators are going to hold as much as they can as well. That sounds great and all, but what happens next year when we need to start working through all this grain from both the elevator and the farmer? We are going to have a monster amount of grain to work through, which usually is not a good thing for basis and also makes it hard to get a substantial board rally. We are truly feeling the effects of a very large carryout.
We have another USDA report in the books and they once again raised the yields. We are through the frost scare rally now, which wasn't much of a rally. There just isn't anything in store to hurt the crop from here. The only thing we have left that could drop the yield is the yield itself. Is the crop there or isn’t it? Time will tell. The USDA bumped the corn yield to 169.9 bpa from 169.5 back in August. They pegged the 2017/18 corn carryout at 2.335 billion. That’s a lot of corn to work through. The world corn carryout for 2017/18 was pegged at 202.5 million tonnes vs 200.87 in August. The USDA also jumped the bean yield up to 49.9 bpa vs 49.4 in August. The 2017/18 bean carryout was pegged at 475, which was unchanged from August. The world bean carryout was just a tick lower from their August number at 97.5 million tonnes. Expectations were for the yields to drop slightly as we thought the August numbers were too high, but once again they bumped them higher. We are now stuck treading water until we get this crop in the bin and find out the true yields.
The corn market had a rough day today after a 4% rally as of late. We still remain 11 cents off the lows from last week. Traders continue to await the USDA report next Tuesday, Sept 12th at 11:00 AM. Will the USDA be willing to drop the yields from their August estimate? At this point I would doubt it, but the weather has been on the cool side and there are definitely some white mold issues in areas. That could make a difference in the final yields. The forecast remains above normal temps in the 6-15 day in the western corn belt, so that should help with growing degree days. This crop is still behind and needs time to finish. Basis seems to be puckering as of late, especially soybeans. It seems as though the crushers will have enough beans to make it to new crop. The scheduled plant shutdowns as of late take some pressure off. There also is a large amount of old crop corn that wants to move before harvest. The big report will be on Sept 29th as the USDA issues their stocks report.
Cool temperatures prevail over the next few days, but it looks like we are going to avoid any frost talks. This crop needs some heat to finish it off and the 6-15 day forecast look to have above normal temps in store. I was surprised to see beans up nearly 20 cents today with the current forecast. Our next USDA report is next Tuesday, September 12th. Export inspections were good this week, but nothing overwhelming. There was more export sales announced this morning, which are always welcome. Beans seem to be a hot export commodity as of late. US PNW beans into China are currently 8-10 per ton cheaper than the US Gulf, Brazil, and Argentina. Corn is exactly the opposite, which is bad news for the time being. Crop ratings will be out tonight at 3:00. Corn and beans are expected to be unchanged to down 1%. Nothing too exciting!
Today was very quiet ahead of the holiday weekend. Not much is happening with light volume trade and very little news. Beans traded higher most of the day and finished up 12 cents on the week. Corn tried to trade higher this morning, but failed to hold the gains down 2 on the day and down 5 on the week. Weather will be the key next week during the full moon. Will we see any areas of frost? Informa came out with their updated yield estimate. Corn yield was put at 169.2 bpa vs 165.9 bpa last month, but just slightly under the USDA August estimate of 169.5 bpa. They estimated soybean yield at 49.4 vs 47.3 last month. USDA had the same number of 49.4 bpa in August. The grain markets are closed on Monday, but open up at 7:00 pm Monday night.
December corn set a new contract low this morning at 3.44 1/4, but once the market opened at 8:30 am we did nothing but work higher. Export sales were solid for both corn and beans this morning, which may have added support. Price Later and Basis Contract deadlines have passed and selling pressure should slow considerably. The US Dollar was lower once again today and the Brazilian Real was higher, which makes the US more competitive. Month end positioning might have been the biggest factor as the funds were short and took gains at the end of the month. This reversal should have weeded out the weak shorts already as we took out some key resistance levels very quickly. 3.65 - 3.70 Dec Futures will be the next target area if we can sustain this move. Tomorrow will be important as we start a new month to see if the buying continues. It was surprising to see wheat down 15 cents today, when corn was up 12.
Corn made another new low for the move today at 3.47 Dec futures. We tried to bounce back a few cents, but only closed a penny off the lows. There is still a lot of corn to price on DP and Basis contracts tomorrow, so I think it will tough for any type of recovery tomorrow. Month end short covering would be about the only reason for a bounce. Crop ratings last night were unchanged on corn at 62% g/e and beans improved 1% to 61% g/e. We did have some corn sales to Mexico and beans to China announced this morning, which has been a common theme lately. This is routine business however. The US dollar has been getting beat up as of late and should help exports, but we need to see some more buying if we want to get this bleeding to stop. As I mentioned before commercial selling should slow up once August is over, but it is still going to be hard to sustain a rally ahead of harvest unless a frost scare occurs. There still seems to be a large amount of old crop corn that wants to move before harvest and the futures market knows that. For those of you with Sept basis contracts, tomorrow is the deadline.
The markets continued their downward spiral today as we make new lows in corn market as we approach 3.50 Dec futures. Selling pressure continues as price later deadlines hit the grain sectors and also basis fixed contract deadlines are also this week. There is a large of amount of bushels that need to be addressed on those programs throughout the country, which is causing a massive amount of selling pressure on this market. Are we getting cheap enough? I think so, but the problem remains that there is still a large amount of old crop corn that would like to move before harvest to make space for the new crop. We are definitely feeling the effects of a 2.4 billion bushel carryout. Export inspections were very good today and we will need that to continue. Selling pressure will continue through the balance of the month, but there could be some month end short covering by the funds to maybe offset it a little. Crop conditions will be out tonight. Corn is expected to improve 1% while beans are guessed to be unchanged. Hopefully we see some turn around Tuesday action.
Final Farm Journal crop tour results:
Corn: 13.953 billion bu. production; Average yield of 167.1 bu. per acre
Soybeans: 4.331 billion bu.; Average yield of 48.5 bu. per acre
In August, the USDA was:
Corn 169.5 BPA, production 14.153 billion bushels
Beans 49.4 BPA, production 4.381 billion bushels
There is nothing in the crop tour that is going to make this market turn around. It looks as though the crop is there today, but it is not yet in the bin. If we have an early frost threat that would be a major issue as this crop seems behind with a lot of variability. Yesterday the crop tour pegged southern Minnesota yield at 191.1 bpa vs last year’s tour estimate of 182.3. Some experts would argue the USDA could even raise their yield as the tour is typically smaller than the final USDA number by a wider margin.
The farm journal tour came up with a corn yield of 180.7 bpa in Illinois vs last years tour estimate of 187.3 bpa. That compares with the USDA's current estimate of 188 bpa and last year final yield estimate of 197 bpa. Pod counts for Illinois were at 1,230 vs 1,318 last year and a 3 year average of 1,269. The tour also gave numbers for western Iowa. They had corn at about 179 bpa. They had pod counts from 1,158 to 1,226. This was the supposedly problem area in Iowa. The tour will have their final estimates for Iowa out tonight. Export sales continue to pick up on soybeans as the exports sales were over expectations this morning. We also continue to see multiple bean sales as the USDA announced more to China this morning. With lower pod counts in general on the tour and good export sales, hopefully we get some life back in the bean market. If that happens it might be enough pull the corn market higher as well. One more reminder in case you missed it yesterday, the free price later corn needs to be priced by tomorrow. If it is not priced by tomorrow's close it will be sold on Monday morning.
Corn made a new low today since last year. I have been preaching that corn needs to trade 3.58 Dec futures and hopefully bounce out of that level and trade higher. Well…we traded it today but closed 2 cents lower than that. The close is not good technically and may cause some more selling pressure the balance of the month. The farm journal tour is not helping matters finding some very good yields. Yesterday's results had Indiana at 171.23 bpa and Nebraska at 165.42 bpa. Both slightly lower than the USDA projections, but not bad. I am interested in the Iowa yields on the tour. With as many people saying they were too dry, it will be interesting to see what they find. The free price later deadline is fast approaching this Friday for those of you with bushels on that program. They need to be priced by the close on Friday, or they will be priced on Monday morning. Please be looking at those bushels and make arrangements prior to the close on Friday. For those of you with basis contracts that deadline is next Wednesday, August 30th by the close.
The farm journal tour continues today. Yesterday they came up with Ohio at 164.6 vs last year 148.9 bpa. Compare this to USDA's current projection of 171 bpa vs last year’s final yield of 159 bpa. Avg pod count was at 1,107 pods vs last year at 1,055. The three year average was 1,174 pods. In South Dakota (the eastern side) they pegged the corn yield at 147.7 bpa vs last year at 149.7. Compare that to the current USDA estimate of 140 bpa vs last year’s final yield of 161 bpa. Pod count was at 899.5 vs last year at 970.6. The 3 year average is 1,027. The one concern they did mention was the beans will need more time to mature. They will need almost the entire month of September. Hopefully there is no early frost issue or there could be major concern. Crop conditions were out last night and corn was left unchanged 62% and beans improved 1% to 60% good/excellent. Nebraska and Indiana are being surveyed today and from indications the USDA looks pretty close. Pod counts are also higher than yesterday. So far the markets have not had much reaction to the tour. The bulls have little to go on at this point in the tour.
The farm journal tour starts today, but it still almost too early to get a good feel for what the final yield will be. For the most this tour has under estimated the final USDA yield by 1-5 bushel on both corn and beans, so keep that in mind as well as we go forward. One of the Ohio routes came up with a range of corn yields from 59 - 222.6 bpa, with an average yield of 148.35 bpa. The route in SE South Dakota and NE Nebraska came up with an average corn yield of 149 bpa. There was a very wide variety of ear pictures as well. On the bean side of thing the pods counts seem lower than last year, but it might be early yet as well as all the pods are not finished setting. We have the crop conditions update this afternoon. Corn is projected to be unchanged at 62% good/excellent and beans are projected to be unchanged or a 1% improvement. Export inspections were out today and corn was below the average guess at 27.2 million bushels. We need to average 24.9 million the next 2 weeks to make it to the USDA's projections. I think we will manage to do that. Bean inspections were at 24.4 million bushel and the average guess was at 22 million.
Export sales were very good for both corn and beans this week. We had some more sales announced this morning by the USDA. Some of which were optional origin, but still a good sign. The bean sales have been on fire lately, but we were behind pace as I mentioned before. There have been a few old crop cancellations as well, so those will just carry over into new crop. Corn still struggles to do much of anything as we trade a tight range and trend lower. We are now 6 cents away from trading the Dec low of 3.58. Maybe tomorrow is the day ahead of the pro farmer tour next week to spark some type of hope. Beans basis has been popping for new crop, but now the BNSF freight is finding life as well to offset the difference. Go figure, as everyone wants a piece of the pie. Other news today was very light and I would the same tomorrow. Next week’s crop tour will be the key to get out of this slump.
The grain markets continue to take the least path of resistance which is lower. We continue to inch closer to the 3.58 Dec futures low. We got within a nickel of that today at one point. Rain showers continue to move through the Corn Belt and provide finishing rains to this crop. Now we just need some heat to finish it out and that is in the forecast for the next 2 weeks. Ethanol production this week was at its 2nd highest level ever. Ethanol stocks increased 500,000 gallons as well. Cheap grain leads to bigger margins and the grind shows that result. Bean premiums continue to creep higher for new crop basis as the farmer is not selling and China is in the buying mood. Look for more choppy trade with a bias to the downside the balance of the week. We will see if the crop tour can get us turned around next week. One central IL county did a crop survey and took 62 corn samples. They came up with a yield of 187 bpa vs last year at 209 bpa. Another group did a similar survey in a different county and came up with 190 bpa vs last year at 224 bpa. For reference the August USDA had IL corn yield at 188 vs 197 last year. We will be hearing a lot more of these yields next week.
Corn and beans both made new lows for the move today, which keeps the Dec corn low at 3.58 and Nov bean low at 9.07 the short term target. The crop ratings last night indicated a 2% improvement to the good/excellent ratings in corn, which now stands at 62%. Bean ratings had a 1% decline and they currently stand at 59% good/excellent. With all the rain so far in August that surprised me. I mentioned yesterday on how the ratings don't seem to mean anything after the Aug 10th report when we try to compare the yields the USDA gave us vs the condition ratings. Let me give you a couple examples to why exactly I say that. Let’s take a look at Indiana and compare the ratings vs the USDA yield on both corn and beans. The corn g/e ratings in the Aug 2016 USDA report were 73 last year vs 52 this year. That is a 21% drop in ratings. Last year the USDA had Indiana corn yield at 173 bpa and this year that number is unchanged at 173 bpa. How do we have 21% drop in ratings with no change in the yield. The same story goes in the beans. Ratings last year in the Aug 2016 USDA report were 74% g/e vs this year at 54%. Yield last year was 57.5 bpa vs this year at 55 bpa. So we have a 20% drop in ratings, but only a 2.5 bpa drop in yield. If someone could explain this, that would be great. I understand the trend yield moves higher with better genetics, but not to this extent. Someone is lying to us, so it will be interesting to see what the boots on the ground say during the crop tour next week. The USDA announced a couple more bean sales for new crop this morning as it looks like China is back. It is good to finally see some sales get put on the books again.
The markets gapped lower last night on the open on weekend rains. There is also more in the forecast for later in the week. Corn traded down a nickel and beans traded down 15 at one point today. We did manage a very good close today as corn finished up 2 cents and beans battled back to close higher than they initially open last night. That is a good sign for the rest of the week. Maybe we have a shot at turn around Tuesday tomorrow the way the close looked. Export inspections this morning were as expected for corn and near the top end of the guess on beans. Crop ratings will be out tonight at 3:00 and expectations are unchanged to down 1% on both corn and beans. I am not sure how much the crop ratings mean anymore after last week’s report, but we may trade them regardless. Hearing more rumblings of beans to China, which should be a common theme as they were behind schedule on bookings. For those of you with the price later deadline fast approaching we need to come up with a plan. Same goes for the basis fixed contracts; we don't want to have to roll those contracts into a 14 cents carry.
Corn yield at 169.5 bpa vs 170.7 bpa in July. (Avg guess was 166.2 bpa)
Corn US Carryout for 17/18 at 2.370 billon bushel vs 2.325 in July. (Avg guess was 2.003 billion)
Bean yield at 49.4 bps vs 48.0 bpa in July. (Avg guess was 47.5 bpa)
Bean US Carryout for 17/18 at 475 million vs 460 in July. (Avg guess was 424 million)
I am not sure how they did it, but the USDA managed to put both the corn and the bean yields above even the top end of the range of estimates. Either the USDA was wrong last year and under estimated the yield and is now making up for it or the genetics are just that much better! Apparently the 60% good/excellent rating they release every week means nothing. Even if we don't believe the information they released, we don't have any choice but to trade it for a while. The next thing that could have an impact is the crop tour that starts Aug 21st. Otherwise we wait for yields during harvest to see where they are at. Solid support in corn is down at 3.58 Dec futures. I don’t think we get there, but one never knows for sure. Bean support is around 9.35 Nov futures and if that fails the lows from June are down near 9.11 Nov futures.
I know I sound like a broken record, but nothing changed today. We continue to wait for the USDA report on Thursday. Corn ratings dropped 1% last night to 60% good/excellent yet the market didn't seem to care once again. Bean ratings improved 1% to 60% good/excellent and we traded higher today on a dry and cool forecast. We will continue to chop around these levels until Thursday and then the USDA will decide what direction we go. If you would like some orders working in case we get a bounce on Thursdays, give me a call.
Markets traded higher today as there seems to be less sellers at these levels. We continue to wait for the USDA report on Thursday to help set a direction for the balance of the month. The average guesses for the yields on the report came in at 166.2 bpa for corn and 47.5 bpa on soybeans. That seems pretty close to where I think they will be at. I still don't see them dropping the corn yields to match some of the private estimates at 162-163 bpa. We did have a sales announced this morning for old crop beans to Unknown, which may have caused the reaction to trade higher today. Export inspections were also very solid for beans last week. I would expect the markets to chop sideways from here until Thursday's report.
There is nothing much new today as we head into another weekend. There are still no threats in the forecast at this point. Sunday nights forecast will be important once again, but it feels like it should be less so than normal as a majority of corn-belt saw rain this week. The cool temperatures are also allowing the moisture to stick around. Volume was very light today in the markets as well. Spreads continue to widen out as there is little need for old crop grains today. As I mentioned yesterday it feels like we are going to be stuck in a small range until Thursday's USDA report at 11:00 AM.
Have a good weekend!
Overnight rains had the markets on their heels again today. Rainfalls were very general in the Dakotas, MN, and IA. Thoughts are it will help the beans more than the corn at this point. Informa was out today with the yields they are guessing the USDA will use on the Aug 10th report. They are indicating corn at 165.9 bpa and beans at 47.3 bpa. Corn is higher than a lot of the private estimates (162-163), but the USDA will likely be in that area. Beans are right in line with most private estimates. Part of me feels like the USDA was a little light on last year’s yields and they are lagging behind now to make up the difference. We are seeing and feeling the effects of a very large US carryout. If you disagree, just take a peek at basis levels and also the large spreads indicating nobody wants the corn or beans today. South America's big crop was a dagger to our exports, which will continue that way into new crop. The Aug 10th report is literally our last shot for a rally until harvest is done and final yields are realized, unless we talk early frost.
Corn ratings were down 1% good/excellent last night at 61%. Bean ratings were up 2% good/excellent at 59%. Weather also looks cool and wet into the first half of August, which should help the bean crops tremendously. The system at the end of this week looks very general and it shows a big area of coverage. We did have another corn sale announced to Columbia this morning as they add to yesterday's purchase. Beans have another dime lower to go in order to fill the gap like I have mentioned before. If we decide to test the old lows we are still 55 cents away. Corn is only 2 cents away from its June 23rd low. If we break through that level of support the next stop is at 3.58 Dec futures, which was the low last August. With the crop ratings we are illustrating today, I don't think we see that level. Demand remains very poor for old and new corn at this time as South America corn is cheap. Beans are competitive today for exports.
The markets traded slightly higher once again to heading into another weekend forecast that will be important. We are not reaching the point where the forecast reaches out into the flowering and pod setting time frame. The next 2 weeks look dry with the best shot of rain in corn belt coming in towards the end of next week. The temps are near normal for now though, so we are looking to avoid the extreme heat. The big news of the day was when news broke that a court overturned the EPA's 2015 decision to lower the US biofuels mandates because the US had hit the "blend wall". The court acknowledged the EPA's authorization to cut the mandate due to supply-side factors (such as short crop, lack of crush capacity, etc), but the agency cannot consider demand side constraints. This news rallied the bean oil market today, which spilled over into the soybeans. The US dollar continues to get smoked, down over 500 ticks today. That should be helping to get us more competitive on the exports. Other news today was very quiet.
The markets today started out lower on the radar dropping some rain in Iowa. The reports I heard for totals were .5 inches or less. That will help, but not cure the problem if the weather remains dry for the next 10 days like forecasted. It was good to see the markets turn higher today, but it is not enough to gain much interest from the farmer. The afternoon run on the weather was slightly warmer, but also drier. There is no extreme heat in the forecast, which is still deemed as a relief. Corn feels like we got cheap enough for the time being. Beans I think still have more downside potential as August weather remains very important and will be the driving factor. Don't forget that beans are still just shy of a dollar higher than we were in end of June. We don't want to miss the boat here again as there is still a gap to fill at 9.50 futures. It is likely we will fill that gap at some point before we have a chance to break out to the upside. Like I mentioned already, August weather will be the driver. The next report is on Aug 10th, which we should see some lower yield revisions. Time will tell.
Yesterday the USDA dropped corn ratings by 2%, which are now at 62% good/excellent. They dropped the bean ratings by 4%, which are now at 57% good/excellent. Overnight calls were 5-7 higher corn and 10-15 higher beans. When the markets opened at 7:00 pm we did indeed gap higher. Corn traded up 6 and beans traded up 25 cents momentarily, before they started to work their way lower the balance of the night. When the night session closed corn was down 3 and beans were up 6. The A.M. weather run was then wetter for both the 6-10 day and 11-15 day. That is all it took to break this market lower. It really doesn’t seem warranted to me, but the funds are in control. Speaking of the funds….In June they had massive short positions and took huge losses as they bailed out and became long at the highs in July. Now they are taking massive losses on those long positions as well as they work on becoming short once again. It feels like there is someone that has more money than the funds out here and they are just playing games with them. It is hard to peg where the corn market is trading the yield, but I would guess around 165-166 bpa. I am starting to see a lot of guesses below that now. RJO is using 162.2. Cordonieer is using 163.5 bpa. There are a lot of twitter pictures going around showing pollination issues.
There is nothing new to trade besides the weather once again. For the week corn was up 3 and beans were up 20. The pull back in the markets today were attributed to the rainfall that fell in southern MN and Iowa today. The current NOAA forecast is also showing moderate temps for the upcoming week, which should not harm the crop. As always, everything can change and the Sunday night forecast will be a big one to start next weeks direction in the markets. It feels as though Dec corn is stuck in the range of 3.85 - 4.05 futures. It will take a sell off to 3.74 Dec futures to break the bullish pattern. The funds are covered and now long, so they will need to decide it they add more long positions or bail. Have a good weekend and lets see what happens next week.
Weather….Weather….Weather. At the moment there is nothing else to trade except for the many different forecasts. The US model did move most of the rain north of I-80 now, so they are slightly closer to agreeing. Corn traded up 11 at one point again today and beans traded up 15. Both settled back slightly lower, but managed to hold some of the gains. This afternoon's European model will be important once again. CWG came out today with their projection for the national corn yield and they came in at 167.1 bpa. The USDA used 170.1 bpa. CWG typically is very close to the final USDA number if that is any indication. Corn remained slow to move today. Dec futures continue to flirt with 4.00 futures and it feels like we becoming range bounce once again. It is going to take more weather issues to break out of these levels.
The European weather model yesterday afternoon looked hot and dry for much of the belt for the 6-15 day. That news coupled with the lower crop ratings yesterday was enough to get the market excited last night and this morning. Corn traded up 12-13 cents and beans traded up 20 at the highs today. At 11:30 the GFS model came out and disagreed with the European model and added moisture into IA, IL, and IN. The markets then sold back off finishing just slightly higher. The Canadian model also came in around noon and disagreed with the GFS model. It is hard enough to trade a weather market without all the models telling us a different story. It will be interesting to see what the European model tells us this afternoon, because they have been the more accurate of the two. Corn and bean movement was very light this morning even with the market higher. It is going to take a move near the old highs to get a big chunk of movement. If we make a run to those levels again we should be getting sold out of old crop corn and beans and getting a good start on new crop. Don’t forget about starting 2018 corn as well near 4.25 futures. That could look good going forward.
The afternoon run on the weather looks slightly wetter, but the heat this week is still holding support in the market today. Crop ratings will be out tonight at 3:00, so that should tell us what direction we are going to start heading into tomorrow. Basis is trying to improve slowly as movement is slow after last weeks beat down. It is going to be tough to improve much. Export inspections today were good for corn slightly better than the guesses. Most feel that is something we should not get used to going forward. Bean inspections were poor at the low end of expectations. NOPA bean crush for June was also sharply lower than expected. The stars are having a tough time lining up for the bulls so far this week.
Corn ratings were down 1% at 64 % good/excellent. Beans ratings were also down 1% at 61 % good/excellent.
Not a good couple days in the grain markets. We had the USDA report yesterday, which was bearish. Very bearish if you want to believe the USDA is right by not changing the yield at 170.7 bpa on corn and 48.0 bpa on beans. Then to top it off we had a noon forecast yesterday, which cooled things off and added in moisture. Today those models still agree on the change. Export sales this morning were non-existent for corn and beans were on the low end of expectations. The combination of these things caused the market to crash today. Is it "over"? I doubt it, but this sure is not helping. The recent highs look safe, but we have some more time to trade weather in order to get through pollination. Beans are still 3 weeks away from their most important weather, so seeing them tank 50 cents in 24 hours after a 1.30 rally is about as volatile as it gets. There is a gap on the Nov beans back at 9.50 - 9.55 futures. My guess is we fill that gap if the weather continues to improve. Look for this type of wild trade to continue for the next few weeks. Buckle in with every forecast.
Beans made a new high overnight at 10.47 Nov futures on the news of the lower crop ratings yesterday. Then it started to feel like a bit of turn around Tuesday syndrome. Beans traded down 17 cents around 6 am all the way down to 10.22 Nov futures. By 9:30 am we were back to unchanged and finished the day up 4 cents. We have the USDA report tomorrow, so be paying attention at 11:00 am. I would expect a bearish report on corn and a neutral/friendly report on beans. The one thing we need to remember is once the report comes out it is old news and weather will play the trump card either way. There are a lot of big numbers being thrown around right now for possible futures. Once again be careful not to get caught up in those. Scaling up sales is a great approach in a weather market to assure that we get something done to reward the market.
Corn ratings were down 3% on corn at 65% good/excellent. Beans ratings were down 2% at 64% good excellent. Most expectations were 2-3% lower, so this might be figured into todays markets? Either way it was not a bearish number, so we could continue the rally. Funds have bailed out in a very large way over the last week. Funds should be slightly "LONG" corn after today and slightly short beans yet. Basis on corn is very poor and getting worse. The reality that the market is going to get flooded with old crop corn is playing out. New crop basis is starting to feel the pressure as well. The forecast remains hot and dry in the west, but the east still looks ok at the moment. The ridge looks to be extending further east at the moment. I would for things to start higher once again tonight. There is a lot of grain moving including both old and new crop. Have orders in as this market is going to stay wild for a bit.
The forecast will be the key Sunday night once again to set our direction for next week. Corn made it to a new high by about a penny, but then broke back to near unchanged and finishing up a penny. Beans made new highs today once again and are looking to test our old highs of 10.34 Nov futures. We traded 10.34 Nov futures back in Nov, Jan, Feb, and March and each time we failed to go higher. That is where I would have my orders working, or slightly under. Yes the forecast is hot, but remember what happened June. We had the same forecast for a couple weeks, but it never actually happened. Beans rallied 61 cents this week, plus we had the 27 cent move higher off the report last Friday. We need to take advantage of this rally. If the hot and dry forecast plays out we could go higher yet, but don't miss the boat. I have heard the "experts" throwing out large projections, but we still need to have a lot fall in place to make that happen. For those of you that want to know the level they threw out it was 4.75 Dec corn futures and 11.00 Nov beans futures. One never knows for sure, but don't get caught up in those values and stop making sales. Scale up sales instead.
Wheat once again was the big story as the money continues to flow in big amounts. Minneapolis wheat ended the day down 50 cents. Is the wheat market over? I doubt it, but it shows just how dangerous a market can be and no money is easy money. Crop ratings were out last night and corn improved 1% to 68% good/excellent. Most were expecting a slight decline. Beans decreased 2% to 64% good/excellent. Overnight trade was very weak with corn down a dime and beans down 6 at one point. We traded those levels briefly this morning before bouncing back. Beans made a new high for the move as the November futures broke 10.00, but just barely. Informa was out today and they were 100 million more in corn production that the USDA. They were pretty much line on soybean production. These numbers were basically ignored in the market today. Corn continues to fight to stay above the 4.00 Dec futures mark, but it did close there once again. Can we break out of this range in the near future?
Crop ratings will be out tonight at 3:00, which should tell us what direction we are heading to start out tonight. The forecast continues to a show a ridge in the 11-15 day with above normal temps and below normal precip mainly in the west. We are stuck in the middle of a weather market and that is going to continue. Corn moved heavy on Monday, but not so much today. Anywhere near Mondays highs will move another round of corn. New crop beans were the big mover today as we made it back to 9.00 cash for the first time in a long time. Last month we bottomed cash new crop out at 8.22 cash, so this rally is worth a sale. Most experts didn't think we would see this level again any time soon, so don't miss out. Cash basis remains flat for now on both corn and beans even with the nice rally. Wheat was the exciting market today as Minneapolis traded a nice 95 cent range today. Informa will be out tomorrow with their latest guess at our 2017 crop. Our next USDA report is Wednesday July 12th, which will apply the June 30th info.
The forecast changed a touch over the weekend and now looks a bit hot and dry for the next two weeks. I would expect a very wild trade the balance of the week with the holiday mixed in on Tuesday. Today corn traded up 15 cents at one point today and beans traded up 33. The close was poor as corn was only trading up 4 at the noon and beans were up 22. Just a reminder that the USDA was not friendly for corn on Friday, so make sure we don't miss the boat here. We have been to these levels a few times now and none of which have lasted very long. We have the funds nervous and bailing out, so what happens when they are done liquidating their position? If the forecast remains hot and dry come Wednesday, I would expect to revisit the highs from today. With the holiday crop ratings will not be released until Wednesday afternoon. That will be very interesting as well. Have a great 4th of July!!
Corn stocks were about 100 million over the estimate at 5.23 billion bushel. Corn planted acres were a shocker over the estimate by 1 million acres at 90.9 million. Bean stocks were about 20 million shy of the average guess at 960 million. Bean acres were under the average guess by about 250k acres. Beans rallied off that info and finished the day up 30 cents for new crop. Wheat was up another 32 cents today, which is just feeding these other markets as well. Corn was up 9 cents prior to the report, traded back to unchanged for a moment, and then exploded higher into the close up 11 cents. There were a couple weather models adding more heat for the 11-15 and also lowered the moisture. Next week will be wild as trade will be limited due to the holiday. Markets are open until noon on Monday and they are closed until 8:30 AM on Wednesday. There is a lot of opportunity for weather to change before then so keep your eye on those forecasts. Have a good 4th of July weekend!
Today was all about the stats Canada numbers on wheat. They issued a lower acres number than expected and when you couple that with the already bold wheat story in the Dakota's we have a bigger issue. They also showed that there was more Canola planted then Wheat for the first time ever. Much like the US beans acres over corn for the first time ever (Possibly). We will find that out for sure tomorrow morning. Minneapolis wheat finished up 36 cents today, but traded as much as 56 higher. Chicago wheat played follow the leader up 23 cents. At some point you would think corn would need to follow suit, but the report that looms tomorrow morning will decide that. This June report is typically one of the most volatile reports of the year. Nearby weather looks perfect, but there is talk of heat in 11-15 day forecast, which could be key for starting pollination in places. July will be an important month for weather, so we just need to get through this report with nothing too bearish. Beans on the other hand have a little more time to spare as August becomes crucial for pod development. We found out first hand last year what a good rain in August can do for bean yield.
Crop ratings were out last night and corn was unchanged at 67% and beans were down 1% at 66%. Most traders were expecting them to improve, which is why we starting higher overnight. Corn closed unchanged however, after trading a nickel higher at one point. Beans traded up 12 at point and only finished up 4. These crop ratings are still not getting the funds nervous as of yet. If we are still at these ratings come mid-July that could be a different story. Weather remains good with no threats as of today. We continue to wait for the report on Friday to see where the USDA puts their acreage numbers. Dr. Cordonieer was out today and is guessing corn yield at 167 bpa vs the USDA at the trend yield of 171 bpa. His guess at acres is at 89.2 mil. Dr. Cordonieer's guess on bean yield remains unchanged at 48 bpa along with acres at 90 mil. There is nothing friendly on the beans. For those of you with basis contracts left, we only have 2 more days to get these cleaned up. Please call me to do so.
The grain markets were very quiet today as we wait for the USDA report on Friday. We traded higher throughout the day after last weeks beat down, although it was a very small gain. Export inspections were about as expected. The weather forecast continues to look non-threatening. It also shows a very general 1-2 inch rainfall throughout the corn belt by next weekend. Things looks to warm up a bit in the 6-10 day forecast, which should also be favorable. No big threatening heat in the forecast. Crop conditions will be out at 3 PM today and are expected to improve. Acre estimates for Friday's report have corn at 89 - 91 million acres and beans at 88.5 - 90.5 million. This report is typically very volatile, but I have a hard time seeing that happen this year. The only things that make me wonder is the 27 cent hit in corn and the 35 cent hit in beans last week. Is that strictly weather trade, or is the money trying to tell us something? We will find out soon enough. There is very little grain moving at these levels. When do the bin doors open? There is a lot of old crop left to move.
MN wheat was the only commodity that traded higher today as that story line continues. The rest of the grain complex was ugly once again as the funds continue to add to their short position. Until the weather poses a threat, it is going to be very hard to see any kind of substantial bounce back. One weather map today shows a substantial amount of moisture in ND for late next week. That sure didn’t help the corn and bean markets, but it is too late to help their wheat crop. Yesterday I mentioned corn was 2 cents away from breaking through its April low. Well we did that today and we quickly tested the Dec low at 3.65 Sept futures. If this level doesn’t hold we could lose another dime rather quickly to test the lows put in last October. Beans managed to hold the psychological level of 9.00 July futures today, but it did get within a quarter of a cent. There was not very much news today, so the beat didn’t change. For the week corn was down 27 cents and beans were down 35 cents. We went from testing our recent corn highs on June 9th to now making new lows on June 23. Welcome to the wonderful US weather market.
Today was another very ugly day in the grain markets. Corn finished the day 2 cents away from its April low. If we break below that it opens the door up for another 20 cents lower. Beans plummeted to a new low today. We have not seen this kind of futures level since March of 2016. The next level of support psychologically would be 9.00, but realistically it would also be another 20 cents away at 8.85 July futures. That type of number could be in play before the June 30th report. The general theme has been bearish soybeans for quite some time now and when we missed the China business the last two days it turned into dooms day. The weather forecast looks cool and wet with little threat to crop, which just added to the pressure today. Funds are back to feeling very comfortable with their short positions obviously after things were not looking good just a couple weeks ago. Basis contracts need to be rolled to the Sept before next Friday, so if you are one of those people please give me a call. One thing to do before corn decides to rally back is look at locking in more basis. I know it is not very attractive, but if we rally back and the market gets flooded with corn basis will be uglier than it is in August and Sept. There is a lot of old crop corn to work through yet this summer.
Beans take another leg lower today as the strike in the Argentine port of Rosario has been suspended. That didn't last very long, yet it still had a 5 day impact on their exports as the ships are waiting to load. The big news today is that China supposedly bought 14-16 bean cargoes out of Brazil yesterday, for a total of 500,000 metric tons. Rumor also has it they bought another 8-10 cargoes from Brazil today again. That could be a big hit to US bean prices by missing out on all of that business. Once again it sounds like we missed the business by a heavy amount just like we did with the corn business a few weeks ago. Corn and beans both traded higher right away this morning on the updated EU weather map. They were suggesting the 2 week US forecast for the Midwest will be mostly dry and temps to be normal to below normal. We are now only 7 trading days away from the big June 30th USDA report. Talks of higher June 1st soybean stocks than last year, along with higher US 2017 soybean acres than the March estimate, and missing China business are weighing heavy on futures today. Corn stocks we also know are large and even if the acres are light from March, the big carryout still could limit the upside.
Today was another ugly day in the grain markets unless of course you have some wheat to sell. Overnight markets had Minneapolis wheat up 17 cents and after falling back some during the day we closed right at that level. Corn and beans couldn't find a buyer though as corn finished down 5 and beans finished down 10. Even after last night ratings were disappointing we still couldn't bounce at all. Corn and beans still feel very range bound. Weather looks ok for the most part and we keep assuming rain will make grain. There remains talk of the Tropical Storm moving into Louisiana and it will be important to see how that rainfall tracks north once it hits land. Argentina remains in the middle of a strike at their main port of Rosaria, which represents 80% of their grain exports. They are now in their 6th day and if it continues it could support soybeans. It will be interesting to see how long that plays out.
Export inspections were better than expected for corn and wheat. Bean inspections were basically as expected. The corn futures crash today after last weeks small rally on better than expected rain fall in much of the corn belt. There is also another 1-2 inch general rainfall forecasted this week throughout the corn belt. Basis is starting to feel slightly better, but improvement has been slow. The ethanol plants seem to have good coverage for the nearby, so they are just buying their time as when the board rallies corn moves every time. Crop ratings will be out tonight and most thoughts remain that they will improve from last week. Corn came out unchanged at 67% good/excellent, which should be a little positive for tonight. Beans improved 1% to 67% good/excellent.
Corn 67 % Good Excellent vs last week at 68%
Beans 66% Good Excellent vs last year at 74%
Spring Wheat at 45% vs last week at 55%
Wheat was the big story in last night’s ratings. Corn and beans became a follower today up slightly. Corn feels like we are going to be stuck in a range here for a while, only the range moved a dime higher after last week’s breakout higher. It feels like 3.75 - 3.92 July futures could be the range. The funds remain short and each weather forecast determines the direction. The June 30th report will be a big hurdle to get through, which is the most important date on the calendar for now.
The monthly June USDA report is in the books and very little happened to the futures. Overnight markets had corn down 5 cents at one point, but the morning session had corn already trading higher once again. The USDA left the 17-18 corn carryout unchanged from May at 2.110 billion bushels. The average guess was to be slightly lower. The USDA raised the bean 17-18 carryout by 15 million bushel from May up to 495 million bushel. Most traders were expecting a decrease due to higher exports, but they left the exports unchanged. That is hard to believe when we are currently at 105% of their export estimate with another 2.5 months to go. The most negative number posted today was the world bean carryout number. They pegged it at 92.22 mmt vs an average guess of 89.44 mmt. The big difference was the Brazil bean production up to 114 mmt vs the May at 111.6 mmt. That is a massive adjustment when the trade was guessing 112.3 mmt. We did have the USDA announce another bean sale this morning, which is encouraging. Once the report was done we went back to trading weather. The Sunday night forecast will be the key to start next week.
Overnight markets were higher once again and testing 3.90 July futures. We had resistance sitting at 3.92 and we traded right up near that this morning and failed. Corn closed only a penny higher on the day. Beans finished up 7 on day after trading double digits for a short period of time. We are in a weather market and I would expect the volatility to continue for a while. This is the chance we have been looking for to get some old crop corn moved. It is not nearly as exciting of a rally since basis is weak, but its better than nothing. Dec corn near 4.10 is also a good opportunity to get started. If you are into the price builder compass contracts you can get Dec futures near 4.30. Just remember there is some risk involved on these contracts. If you have question on how the price builder contracts work give me a call. They are a great way to market a small percentage of your crop and get a premium to todays market. Wheat was the leader today up 20 cents at one point in Minneapolis. We have the USDA report tomorrow at 11:00 AM, so look for some more wild trade.
Today was the day to break out….finally. Funds are starting to feel the heat along with the northern crop and liquidating some of their massive short position. Now it feels like this basis market was just ahead of the game and seen this move coming. Rail and Ethanol markets were weaker again today as corn futures were able to break the 3.85 July level. 3.92 will be the next goal. Corn moved today in a big way along with more basis contracts as reality for the rest of the summer is setting in. There are massive amounts of grain left to move and the only way that changes is if the crop in the field starts to look endangered. The updated forecast looks HOT. The eastern belt should be looking for some heat after being too wet, but everyone knows how fast we can dry out if it’s hot and windy. We were too wet for a while and hoping the rain would stop, but here we are needing some rain. I would expect a wild rest of the week. Don't forget we have a report on Friday! That should add to the fun.
Wheat was the leader today as worries continue with the drought in ND and W SD. I read one report today that had some ND wheat that was 6 inches tall and only a week or two from heading out. Those reports are starting to spook the market as the = near term forecast continues to look dry for those areas. The wheat strength also leaked into corn and soybeans. Corn tried to test 3.80 today, but once again failed to break out. It felt like today was going to be the day to do it. Basis continues its whoa’s as the futures work higher. Beans also tried to work higher this morning up double digits for a while, but also fell back at the close. Crop ratings were out last night and corn ratings improved 3% to 68% good excellent. Corn is now 96% planted and beans are at 83% planted. Both are on the average pace. It will be interesting to see if we can break out tomorrow, because every time we have tried we have failed the second day. If we can break 3.80 July futures, it will open the door to 3.85 and possibly 3.92 resistance levels. There was rumored to be a bunch of buy stop orders above 3.80, so that could get the funds nervous.
Corn basis continues to break on the PNW as the basis struggle happens a month earlier than expected. The board continues to trade flat and in a tight range, which is keeping the corn in the bins for the time being. My worry is now; what happens to basis if we do get a weather rally? Do have a home for corn before harvest? There is always a home, but at what value remains the question? Corn export inspections were very good today at 46.3 million bushels. We need to average 30 million per week through the end of August to make it to the USDA goal. Some experts think we could be over expectations by 25-50 mil. Soybean export inspections were at 10.2 mil bushels. Soybean exports need to average 8.3 mil per week to meet the USDA expectations. Some feel a 25-30 mil increase could be in the cards for Friday's USDA report. The monster South American crop could steer the USDA from making any changes. Crop conditions will be out tonight and we are looking for a small improvement on the corn ratings. This will be the first week we get a look at beans ratings. Corn plantings are guessed at 96% and beans plantings are guessed at 81%.
The big story today is the not the futures market. Everyone has been preaching that basis needs to get locked in just in case we get a rally and there just isn't a home for all the corn. The only problem is that it never took a rally. PNW corn bids have been crushed over the last two days. Last week BNSF freight was trading huge values; today those values are trading near tariff. That alone feels like it was enough to break basis as the commercials were trying to get in front of the action. So now we need to decide if this is just head fake or if this is the new reality for the rest of the year. My thoughts would be this is reality. Everyone is aware of how much corn needs to move off the farm yet and we are now into June. We have 4 months before new crop hits the bin and space is going to be needed by all. Everyone continues to wait for the Chicago board to rally, which could still happen. If the crop ratings hold at these levels for another month the funds should get nervous. If the crop ratings improve with the warmer temps and the precip slows down a bit, we don't need to rally at all. Time will tell and the weather is the key for now.
Corn bounces back on what should have been turn around Tuesday, but this week it happens to be Wednesday since there were no markets on Monday. The initial corn crop ratings were pegged at 65% good/excellent. That is not very far from the guesses, but it still got some money flowing. The other part of the money flow could have been as simple as month end and the funds could be short covering some of their positions. We tested resistance at 3.765 July futures, but failed to break through once again. The next level of resistance would have been at 3.81 futures. Every time we test 3.75 - 3.76 we get some corn movement from the farmer, but it feels like there is a lot more waiting to move around the 3.80 - 3.85 area. Planting progress was pegged at 91% for corn and beans were at 67% planted. The thought of the trade today remains that if we cannot get this corn in the ground the acres will switch to soybeans. Beans are going to have a very hard time recovering any time soon.
Our initial crop rating will be out this afternoon. Corn ratings are guessed to be 67-68 percent. Over the last 10 years we ranged from 63-78% at this time. Most agree that these first crop ratings do not have a direct correlation to final yield this early. We may have stressed the crop due to wet conditions, but if we get the heat we need the crop can bounce back very quickly. Corn plantings are estimated at 90%. On the bean side the average guess is around 64% planted. Weather for the next 2 weeks suggests normal temps and normal precip. Weekend rains were less than expecting in the east, which could be the main cause of the market puking again today. Bean export inspections were solid today at 12 mil bushel. Corn inspections were very good as well at 47 mil bu vs only needing 30 mil to reach the USDA goal. Some could see final corn exports near 2,325 vs current projections of 2,225. It will be interesting to see if we can get some of the business from SA in Aug and Sept. China remains a slow buyer of soybeans as their crush margins remain poor. It seems only a matter of time before there is an 8 in front of the bean futures.
Not a good day for the bean market today. We broke through the support of the April 11th low in Soybeans and that opens the door all the way to 8.85 July futures, which is another 55 cents lower. Thoughts are that if we are going to continue to delay corn the acres will switch to beans. That is remained to be seen at this time and seems like it should be a bit early to completely tank the bean market when we are only 53% planted as of Sunday night. The funds remain short and are now adding to their bean short. This close today is very bearish technically, but we will have to wait and see they continue to hit the sell button tomorrow ahead of the long weekend. Volumes were lighter than usual today and will be again tomorrow. The Monday night forecast will remain to be the key. Cool and wet will be the main watch and also how much rain they receive in the east over the weekend. Corn held support at 3.69, but if beans continue downward it is going to be tough for corn to rally much at this time.
The grain markets were pretty much a non-event today as we fail to get any new news. The 2 week forecast still looks cool and wet to me, but the market still thinks we will get the crop in the ground. When looking at twitter it looks like there is a lot of replanting taking place and there are also some waiting for things to dry out to do so. Export sales will be out in the morning, which could set the tone for tomorrow. We have a 3 day weekend coming up as the markets will be closed on Monday for Memorial Day. The Monday night forecast will be the driver if we stay cool and wet. Until then we could see some short covering by the funds as we approach the long weekend and month end. The next report is not until June 9th, but the big one will be on June 30th.
Once again the rally is short lived as the corn market fails to even reach 3.80 July futures. The funds protect their positions once again as the 2 weeks forecast looks drier for now. Crop progress was out last night and they were pretty much as expected with corn 84% planted and beans were at 53%. There remains talk of replant areas, but for the most part we are on track. Corn ratings will start next Monday, so we will have to see how those look. I heard today that Iowa was going to start close to 75% good/excellent, but Illinois and Missouri were going to start in the mid to low 50's good/excellent. Will that kind of number get people excited? Everyone knows it is early, so if it dries out those ratings have a chance to improve quickly. The June 30th USDA report is going to be massive as always. There are a lot of thoughts that bean acres could be higher than the March intentions due to planting delays. Beans acres are thought to be 90.0 mil and due to that corn acres would drop to 89.5 mil. Not a huge difference, but it would make weather for corn a little more important to achieve trend yields.
The grain markets started strong on weekend rains and a cool weather pattern. Planting progress tonight will be interesting with estimates at 85-89% for corn. If we come in under 85% it should be very supportive, but I would have to think we will be higher than that. Beans are estimated 55-60% planted. The next 2 week forecast remains cool and moist, so drying things out will be a slow process. How long this weather drags out will determine if these funds decide to get nervous. 3.85 July futures remains my target initially. 3.20 cash corn will move bushels as most producers are waiting for an opportunity to pounce on some unsold bushels. Depending on how many bushels move at that kind of level will determine if we can sustain any type of rally. Supplies remain very comfortable, so without taking some yield potential out of the crop in the field the upside should be limited. If we do get a rally remember to keep an eye on the basis. It doesn't feel like this market is hungry for an overwhelming amount of grain to move, and we know there is an abundance to move yet.
Grain markets rebound today after yesterday’s beat down. The Brazilian Real is rebounding some today as well up 2.5% after President Tremer says he will not resign and he has done nothing wrong….We will see. The US politics seem to have their own issues as well. It is truly amazing how fast these different outside factors change and are affecting the grain market in a wild and volatile manner. Rail freight is going absolutely wild again as well just to add to the excitement as the BNSF performance is poor. How long that will last is remained to be seen. We sit here and look at the weather everywhere as twitter explodes with pictures of soggy fields and standing water. Scattered areas need finish planting corn and others need to replant. Trend yield could be getting tougher to achieve the later it gets. The other side of the fence has the funds holding tight on record shorts. The carryouts remain very comfortable at the moment. Until we extend this delay or have a summer weather problem we are going to remain in this range. Expectations for Mondays planting progress have corn near 82-85%. Some are thinking it could be 88% implying more progress in the east.
Everything in today's US grain markets seem to evolve around Brazil. Overnight news broke that their president, Michel Temer may be involved in a scandal. This is getting to be an everyday norm anymore around the world. News is that he has been recorded discussing a payoff to a witness involved in a graft probe. This in turned caused the Brazil currency to crash and was down 7-8% at one point today. Why does this affect the US markets? If the Brazil currency crashes it will likely take export business away from the US. It makes us much less competitive vs Brazil. The other thing it does is entice the Brazil farmer to sell their crop as a currency play if the real looks like it will continue to fall apart. President Temer is scheduled to speak around 2:00 central time today, so it will be interesting to see how that plays out. Some rumors include that he could step down, but others say he won't. We will have to see if this is a knee jerk reaction to political news, or if there is a big issue. Export sales jumped back up for corn this week coming in on the high side of expectations. Beans exports were also pretty good, but the Brazil news took the lead as beans were the big loser down 31.
The US dollar continues to get beat up as we are near 97.5, which is the lowest level since November. This continues to bring hope that the US can pick up more business and dip into to our monster carryouts. The forecast looks wetter today into the 11-16 day forecast, which is bringing more doubt into the corn market. We need to close above 3.72 in order to open the door back up to 3.80. If we get to 3.80 there is corn willing to move, which could slow the rally if it happens. The funds need to change their tune and start to bail out before we can sustain a rally. US ethanol production was above last week yet again. Ethanol stocks were also above last week. Margins continue to shrink as ethanol was down 3 cents and corn was up 4 cents. There remains talk that China bought 200 mt of US Soybeans. China soybean margins are improving and with the US dollar on its heels, it should make it more attractive. Export sales will be out tomorrow and we will see if we can continue the corn bounce off that news.
Beans were the leader today and basically the only commodity that found some buyers. We had a USDA announcement today of 132,000 mt of old crop soybeans sold to Unknown. We are also hearing China could be buying more US old crop beans. This could be the news that got the bean market rolling as South America was supposed to take that business away by this time. The Brazil farmer remains a slow seller, which should help result in more US shipments. The planting progress report was out last night and they pegged corn at 71% planted vs an average of 70 %. Last year we were at 73%. On the bean side we are at an estimated 32% planted, which is right at the average. Last year we were at 34%. For those that hoped these numbers were going to be bullish, it didn't happen. It feels like this market just wants to sit here and trade in a range. Funds remain at near record shorts in corn at around 210,000 contracts. Hey…..we had our first weather guru out today that already wants to start talking about a hot and dry pattern shaping up for the US summer….why not! Someone has to be first.
Export sales for corn were pathetic this morning, which didn't help matters any. Every time it feels like corn wants to rally we cannot sustain the rally for two days in a row. Conab was out today and raise the Brazil corn crop to 92.8 mmt vs the USDA yesterday at 96.0 mmt. On the bean side Conab pegged Brazil production at 113 mmt vs the USDA at 111.6 mmt. The USDA and Conab are slightly different in each category, but either way you look at it it is a big crop. Corn and beans both closed above early support by a penny. Planting is moving along rapidly in the west, but still slow in the east. The 11-15 day forecast looks dryer at midday, which also could have sparked the selling. Selling remains nill as the farmers are busy in the field. Beans basis is shows continued improvement, but corn is steady.
USDA report day and the world ending stocks for next year was the friendliest portion for corn. They estimated the 17/18 world ending stocks at 195.3 mil tonnes. The average guess was near 209. The 16/17 world ending stocks were very close to expectations at 223.9 mil tonnes. On the US side alone they dropped the current 16/17 carryout 25 million bushel to 2,295 mil bu. The average guess was at 2,331. For the US 17/18 carryout they pegged at 2,110 mil bu vs an average guess of 2,331. Even with the world number being smaller for next year we are still at a very comfortable carryout. On the bean side of things they pegged the US 16/17 carryout at 435 mil bu vs an average guess of 441. US 17/18 carryout was pegged at 480 mil bu vs an estimate of 566 mil. That could limit our downside from here, but it is still a very healthy carryout. 16/17 world carryout numbers were very bearish at 90.1 mil tonnes vs a guess at 87.6. The 17/18 world carryout was at 88.8 mil tonnes vs an avg guess of 87.2. Now that this report is out of the way we go back to trading weather. They are still having lots of problems in the east, but it hasn't helped the futures yet.
Today was another very non-eventful day in the grain markets. The planters are rolling hot and heavy this week. Corn planting was pegged at 47% vs a 52% avg for this date. That average is slightly skewed because of last years blistering 61% pace at this time. The 2 week forecast continues to look wet for the midwest, which should offer support. Were beans higher because they don't like wet planting conditions? Or were they just higher because they can be? World demand continues to be very strong for beans. The railroad is trying to give incentives to exporters to keep the US competitive with South America. Tomorrow is report day, which should be the most exciting information of the week. Too bad most traders don't see and significant changes happening. It is going to take 3.80 - 3.85 July futures before corn starts to move in big chunks again. Basis continues to be steady even with the farmers not engaged.
Grains battle back some today after yesterday's beat down. Weather still looks a little wet to me in the east in the 6-10 day. Sunday nights forecast will be the key once again to start off next weeks direction. We have the USDA report on Wednesday and that is about all we have to shake things up at the moment. We just cannot seem to get anything to break this market out of its range. Supply is still more than adequate even with exports being very good. Planting pace will be hot and heavy in the upper midwest this weekend.
The wheat market got smoked today down 16 cents in Chicago and 14 cents in Minneapolis. The wheat tour deems the damage less than originally thought and that’s all it took for the sell paper to hit. Corn has to follows suit and now our entire rally is gone and it only last 3 days. I wouldn't panic yet, but it sure doesn't help the situation. Planting progress on Monday is going to look behind pace, but the May 15th planting progress should show us back caught up. This week will be a huge planting week if the weather holds. The beans managed to hang in there pretty well considering. Premiums on beans have picked up in areas and I would hope that continues. China was back in the US picture for July, which was also good to see. There are some thoughts that the USDA will decrease the carryout in next weeks report, which could be keeping beans from joining the downward spiral.
Funds defended their position hard today deleting half of the gain we had in corn yesterday. There is lots of talk that the wheat damage may be less than originally expected, but it is still early to determine how much harm it caused. Like I mentioned yesterday, we had a huge surplus in wheat, so we almost needed something like this to happen to eliminate some of that supply. I am still looking for corn to test that 3.85 July future area at some point. The extended forecast looks ok for the time being, but there is some talk of another system Thursday or Friday next week. We will have to see if that develops. Beans managed to hang in their pretty well as there is more talk of the US announcing a decision on the biodiesel anti-dumping case and new biodiesel taxes. If this happens some feel it could drop the carryout a fair amount and support prices. Planting pace last night was pegged at 34% for corn, which is right at average. Bean pace was pegged at 10% vs a 7% average.
Weekend weather was very wet through Iowa, Missouri, and Illinois. Localized rainfalls were over 6 inches in some locations. There are several locations in IA and IL talking about having to replant. The bigger story was in the wheat market in Kansas. There was heavy snowfall in Western Kansas on wheat that already 25% headed out. The damage is still being determined, but there are estimate of over 100 million bu loss. That would take care of the high end on the wheat carryout. A new month probably helped bring in some new money and the funds might also be getting a little nervous. As of Friday funds were short over 190,000 contracts of corn. I think 3.85 July futures continues to be the target for now. I think it will be hard to get past that unless this cold and wet weather continues. The 11-15 day forecast at the moment looks to improve at the moment. Time will tell. Don't miss the boat on 3.20 - 3.25 cash corn. Fundamentals still have not changed on this corn crop.
Believe it or not corn was up 3 cents for the week. It feels like we are lower all the time. Beans were down 4 cents on the week. Funds continue to build on their short positions to end the month. We are going to have a hard time getting too much of a rally until we can get something to change their mind. The Sunday night forecast will be the key. The weather models have a couple disagreements at the moment for next week. Our next USDA monthly report is not until May 10th.
Trumps comments from yesterday were down played today saying they were going to renegotiate NAFTA instead of back out entirely. If we did happen to back out it would be a major hit to the US corn market, especially with Mexico. Corn tried to bounce off of yesterday close, but it really didn't do much. Export sales this morning were very solid with corn slightly over expectations. Beans were almost double their expectations. The markets didn't seem to care. Weather remains very wet and cold nearby, but looks to dry out in the 7-15 day, but temps are still cool. Until the funds see a larger delay they are not ready to liquidate their position. I would expect a quiet day again tomorrow and then the Sunday night forecast will be the key along with the observed precip amounts over the weekend.
Corn and beans are now off the July futures.
As you probably know by now….Rain makes grain. Snow and cold perhaps doesn't help much though. The grain markets started out the morning slightly higher on continued worries about the 6-10 day forecast. The afternoon model has the 11-15 forecast drying out slightly, but I don’t think that is what caused the markets to collapse. Mr. Trump decided to mention again that he is getting close to signing a deal to pull the US out of NAFTA. That is the news that could have fueled the funds to protect their short positions once again. We all knew this day was coming, but the fear is about to be realized. What will the backlash be and will another deal be struck? Ethanol production this morning was pegged at 103.6 million bushels. Stocks continue to chop around the 23 million gallon mark. Export sales will be out at 7:30 tomorrow morning. I would be surprised if corn can go much lower at the moment. I am still looking for 3.20 cash before I get too excited about selling.
Export inspections were above expectations for all corn, beans, and wheat. That should have helped prices today along with the weather forecast. Funds continue to have a hefty short position in corn and they are not ready to bail out just yet. Planting progress will be out tonight. Estimates have corn around 15% and beans around 2%. Weather for the central and western belt looks very cool and wet over the next 10 days. It feels to me like we are in line for bounce here, but the funds want to see proof first. Everyone knows how much better technology has gotten and it doesn't take very long any more to get a crop in the ground. Dry weather in the EU should also help support the markets. It is going to be very hard to get more than 15-20 cents on corn for the time being unless the weather continues to be a factor.
Weather remains to be the key as some of the rainfalls totals look to be decreasing. Things look to be drying up for the time being, but there are more chances of rain mid next week. The Sunday night forecast will be the key. If we continue wet next week it could spark the funds to cover some of their shorts. Weekly export numbers were below expectations, which didn't help anything today. Bean exports came in at 8 mil bushel. The good news is that beans for June and July are becoming more competitive to China vs Brazil. Corn export sales were near 30 mil bushel, which was below the estimates. Weather remains the key, but corn has a better chance to rally vs the soybeans at this point. Other news is quiet and I would expect tomorrow to be quiet as well. Selling has shut off for now, but 10-15 cents would change that in a hurry.
The markets continued their downward spiral after last week’s small rally. Noon weather models reduced weekend rain events over much of S IA, N IL, MI, and OH. Argentina harvest weather has also improved, which just added to the pressure. Bean basis is finally starting to see some signs of life as it took $1.40 break in the market to make it happen. Beans are only 15 cents off of last week’s lows. Corn is about 6 cents off of its lows. Even with the move lower in corn, basis does not feel any stronger in the west. PNW values are fairly weak once we get into the June and July time slots. Hopefully that will change, but with SA being more competitive I think it will be tough. As we saw yesterday with exports; demand is very high, but the supply and the ending stocks are also at a record high. It is going to be a struggle to get a rally without some type of weather event in the US corn-belt. We will get a shot to do some marketing at some point. Just make sure we don't miss out on an opportunity if it makes your farm cash flow.
Happy Easter weekend!
There are no markets tomorrow and glacial plains will be closed for the Good Friday Holiday. Corn managed to close at the 3.71 level, which should open the door to the next level of resistance at 3.78 futures. With the markets closed tomorrow, the Sunday night will be the key if we are going to be able to continue this rally. Export sales this morning were on the low end of expectations for both corn and beans. That might have kept the lid on corn today as it almost felt like we were ready to break out a little bit further. Basis is showing signs of backing off today as farmers are starting to show more interest. Funds are still short approximately 135,000 contracts of corn. They also continue to have a small long position in Soybeans for the time being. The funds know they cannot make any money on a weather scare if they don't carry a long position.
Corn tested the April 3rd high of 3.71 1/2 today, but fell off a touch into the close. Corn movement started to pick up once again as we neared this area. If we manage to close above that level it opens the door again to the old high of 3.80 futures. If we do trade up to that level I think the selling will pick up quickly. Have sell orders working just in case. 3.20 cash is where I would work some orders. Weather remains the key focus and we are still forecasting scattered rains for the next couple weeks. This could entice a small rally if these funds decide to cover some of their short position. The reports are out of the way and in the rear view mirror, so now it’s all about planting pace and crop conditions. Even after the last month of lower trading, corn is only 15 cents off its highs from early February. Beans on the other hand are $1.41 off of their highs from January. That is hard to believe.
The USDA report was out today at 11:00 AM and was pretty much a non-event. The US carryouts were right about as expected, but the world carryouts were all higher than the guesses. The 16-17 US corn carryout was was pegged at 2.320 billion vs a guess at 2.352. The world corn carryout was set at 223.0 mmt vs guesses at 221.8 mmt. On the bean side the US carryout was pegged at 445 mil bushel vs guesses at 447 mil. The world carryout on beans was the bearish number at 87.4 mmt vs guesses at 83.9 mmt. That should set the tone for a while and it will be hard to sustain much a rally. Weather will be key from here as we have nothing new to trade until the monthly May report. Conab was also out this morning with their update on the Brazil crop. The jumped the bean production to 110.2 mmt vs their previous guess at 107.6 mmt. The also jumped the corn production to 91.5 mmt vs the previous guess at 89.0 mmt. Nothing bullish to note there either.
Weather remains key as the Midwest looks to have a couple rain events spread out over the next couple weeks. Argentina weather is also wet and needs to be watched over the next 10 days. Tomorrow is the monthly USDA report, which will apply the information from the planting intentions report on March 31st and give us new carryout estimates. Most feel the bean carryout will continue to be healthy, which is the cause for the downward spiral we have been in for the last month. Some feel corn carryout could drop on this report and if we do have planting delays that would only magnify any reduction to the carryout. I am not expecting any fireworks on this report, but as always one never knows.
The market continues it downward spin since the small rally we had after the report. There is word that the Chinese booked 10-15 cargoes of beans coming out of their holiday, but they were all out of Brazil. No surprise there. The next chance we have to move the market will be the monthly report next Tuesday. Corn stocks are estimated at 2.345 billion bu. Bean stocks are estimated at 447 million bushel. I don't expect anything real major out of this report, but as always one never knows. Other than that news remains quiet.
Not much to talk about today as half of our corn rally disappears today. China is on Holiday and they come back to work tomorrow. It will be interesting to see if we get any sniffs of export business. There is a lot of interest in president Trumps meeting with China's Pres Xi this week in Florida. Will that have any impact? Safras once again upped their Brazilian soybeans crop estimate to 111.5 mmt and they are currently estimated at 66% harvested. Brazil exported approximately 9.7 mmt of beans in March, which is a record. They did mention that port capacities were stressed at that level. We will have to see how that plays out going forward. Continue to watch the weather in the corn belt going forward as the current forecast looks pretty wet.
Corn continues to move higher off of the report and beans continue to move lower. Corn resistance is at 3.76 May futures and then 3.80. I would recommend orders working at 3.20 cash corn. Corn movement has picked up dramatically today, so I would expect basis to also be peaking here for the time being. We still have planting to get through, but once the farmer is out of the field basis should back off. Corn and bean export inspections were good again and once again ahead of pace to meet the USDA expectations. Upcoming weather is the 10-14 day forecast looks wet for corn belt. This could offer support if we start talking about delayed planting.
Tomorrow is finally report day! We have been waiting for this one for a while and it will be nice to get it out of the way. This report is known to have some big swings, so we will have to see if we get any surprises. Everyone is very beared up on beans, but it always makes me worry when everyone starts feeling this comfortable about a report outcome. The biggest problem is it seems to be a very easy argument to win because South America's crop continues to get bigger. Everyone is expecting a huge planting intentions number on beans as well. Will we see 89 million acres? Export sales have still been very solid on beans as we were over expectations again this week at 25 mil bushel. On the corn side we are expecting around 91 million acres tomorrow. Export sales were 28 mil this week, which was less than expected. We are still on a very strong export pace currently at 1,867 mil bu vs last year at 1,246 mil bu. March 1 stocks are estimated to be 712 mil bu higher than last year at this time, which would peg stocks at about 8,534 mil bu.
The grain markets were boring once again today. As I mentioned before we are just stuck here until Friday. Wheat country in the South got a much needed rain fall and it looks like more is on the way. There are also a couple 6-10 forecasts out there that are calling for a very wet corn belt. We are getting close to planting dates by this time, so it will be interesting to see if we start with delays or not. It is time start thinking about spring weather finally. That alone could play a role to support corn from dipping too far on the report Friday if that holds true. On the bean side of things it seems everyone is in the camp that we will see a huge bean acre number on Friday. If stocks and everything hold true to expectations we could see a 17/18 carryout of around 600 million. That would be implying that November futures could trade near 8.90 vs today at 9.68. That would be very ugly, but with SA have a monster crop that is the potential downside risk in soybeans. It seems as though we always have a couple rallies during the year with weather scares, so if you get the chance to sell new crop over 9.00 again don't miss out.
Turn-around Tuesday was uneventful, but the good news is we managed to finish in the green for a change. We continue to sit and wait for the report on Friday as there seems to big range of guesses in both corn and bean acres. It feels like things should already be priced in, but one never knows if the USDA will grab onto one of the extreme guesses. Farmer movement is still almost non-existent, but the basis fixed contracts are picking up steam as recommended. If for some reason we get a friendly report on corn, basis might not hang onto these levels very long. I know I keep preaching it, but summer basis could struggle. If you have any questions on how a basis contracts works please give me a call. Outside markets have the Dow up over 150 points and the US dollar up that half point that we lost yesterday. There were still no USDA sales on the wire this morning. Hurry up and wait for Friday as that is the news we are going to trade until we start a weather market.
Same story just a different day. Corn saw some strong buying in the last final minutes of trade today pulling it back near unchanged. Hopefully that is a good sign for turn-around Tuesday, because we are in need of some improvement. There were no sales announced by the USDA today, but I would sure be expecting some ahead of Friday's report. The USDA was down over a half point today, which should also entice some business. There were rumors of Japan shopping for some corn for the summer months and looking to get some coverage ahead of the report. Mexico also tends to buy ahead of this March report, so we will see if those show up this week. Funds are now short about 100,000 contracts of corn, which is only half of what they were short last April. Basis continues to be on the improve as farmer movement is slow. I would expect that will be somewhat limited from these levels. Friday's report will be the tell tail on that as well. I would be looking to lock in some basis on corn ahead of Friday's report.
Beans broke again today after closing below support yesterday. The funds continued to liquidate their long position today as beans were down another 15 cents. 9.60 May futures is the next level of support and that is only another 15 cents away. Corn managed to hang in there today as the US is becoming more competitive in the world. The US dollar was down again today as well. Producer sales are still non-existent at these prices, but we should be starting to look hard for opportunities on basis. Locking basis in on this futures break and moving the physical corn could be the perfect solution. If futures decide to rally on the report next Friday and the farmer starts to move corn, basis will back off fairly fast. We know the bins are still full and this crop is going to have to move at some point. Summer basis is still predicted to be poor as South America has a big crop to export. A basis contract also allows an 80% advance on your money once that grain is hauled. It could be a solution if you need cash today, but don't really want to sell your grain at these low futures levels.
Beans fell through the November low today opening the door to slip to 9.60 May futures. I don't see that happening ahead of the report on March 31st, but one never knows. FC Stone was out yesterday with their survey results for planted acres. They came up with corn at 91.6 million and beans at 87.3 million. That seems high on the corn acres compared to other guesses. The average guesses should be out soon for that report. Grains traded lower all day even with some very strong export sales on both corn and beans. Corn export sales were at 53 million bushel and bean exports were at 27.1 million bushel. Both were over expectations and also bigger than week. Total commitments on corn are at 1,839 vs 1,215 last year. The USDA goal is currently set at 2,225. Bean commitments are at 1,991 vs 1,606 last year. The current USDA goal is at 2,025. We are still on pace, but we also continue to expect shipments to slow as South America steps in.
We are going to open up free price later corn in Murdock only at this time. The reason for Murdock only is that we are trying to give some incentive to producers to haul to Murdock, so we will have less grain to transfer. I am already planning on hauling about 2 million corn from Benson to Murdock and that is hard on the bottom line, so that is why it doesn't make sense to have free price later corn in Benson. The reason for no free price later grain in Milan is because there is no more rail freight available for the rest of the summer besides the freight that I already have booked. Free price later in Murdock will be available as space is available between rail shipments. There is going to be a massive amount of corn to move this summer once the farmer gets done planting. Please be safe during these busy times as help will be limited as some employees move to help in agronomy. As always this free price later corn needs to be priced by our price later deadline, which is 10/19/17.
Another very quiet day in the grain markets as we wait for March 31st. Some early talk today has Pro Farmer guessing 89.3 million beans acres and 90.9 million corn acres. May beans seem to be stuck around the 10.00 futures mark and corn just over 3.60. I would expect little change ahead of the report. I mentioned yesterday that funds are already short corn, but the worry remains that the funds will want to go to a short in beans as well. South America has a monster crop and the US is looking at very large bean acres, so the cards are being dealt. Will we pick up more export business if we get too cheap? China could look to do some pricing below 9.90 May futures. If we want to drop below that the next technical level would be 9.60.
Overnight markets started out higher as we tested the 3.70 resistance level on May Corn. Beans traded up 8 cents as well in early trade this morning. Export inspections were solid for both corn and beans, so that was also good news. Corn was trading lower already by the time the export numbers were released this morning and beans couldn't hold onto a gain either. South American yields continue to rise as Agroconsult raised their Brazilian soybean crop to 111 mmt from 107.8 mmt in Feb. We all know that rain makes grain and once again that seems to be the case. 3.60 May corn futures should be able to hold for now with the USDA planted acres report looming on March 31st. Funds are now short corn after last week as world supplies seem to be growing. We will have to see if the 31st changes their minds.
Grains bounce off their lows after a big corn export number this morning. One thing we know for sure is that cheap grain will always get a little extra interest on the export side, but not much interest on the producer side. I am going to venture out and say our lows are in heading into the March 31st report. The bad news is that there are some estimates out of Brazil guessing there corn crop at 100 mmt. USDA was at 91.5 mmt on March 9th and that even seemed high with CONAB at 88.9 mmt. 100 mmt would be a very bearish outcome to say the least. If we get back near 4.00 Dec futures the farmer will become engaged once again, but until then it is going to remain quiet.
Grains bounced slightly overnight, but a poor NOPA soybeans crush number put a fork in the beans trading higher. The Feb soybean crush was pegged at 143 mil bu vs estimates at 146.1. That is all the news it took to get May beans back below 10.00. The good news today was in the corn market. There is word that China bought 3 cargoes of US corn (195k tonnes) for May/June shipment. If that world holds true it would be largest 1 time sale of corn to China since Oct 2013. We have export sales out tomorrow morning, which should be decent once again. Other grain news quiet as the farmer continues to be disengaged. One an interesting weather note… we had a forecaster out this morning that said the US 16-30 day forecast suggests above normal rains for much of the central Midwest. He thinks it is going to slow corn plantings and could imply more bean acres? My opinion….It’s a little too early yet to worry about that!
Things were looking very ugly this morning when May beans broke through 10.00 and chugged all the way down to test the November lows of 9.91 1/2. That level held and beans bounced back to the 10.00 area. Basis is starting to perk up a little bit as farmer movement has shut off. We might get the basis shot we are looking for on this break, but it is still looking like the summer basis could be soft. USDA announced a sale of corn to Mexico this morning for next year. Hopefully that is a good sign! It was good to see corn close higher today to break the downward string, even though it was only by a penny. Other news was very light today as we continue to wait for the March 31st planting intentions.
The leaking on corn continues as we are now 6 days into the break lower. We are now 19 cents lower in that 6 day span. The next level of support is at 3.60, but the real strong support is down at 3.52. That level should spark some buying interest as we still have the entire spring and summer to trade weather. Informa was out this morning with their updated acreage guess for 2017. They came up with corn at 90.8 million planted acres and soybeans at 88.7 million. Those numbers were very close to their last estimates and also very close to expectations. Will the USDA surprise us on March 31st? USDA announced 120k tons of soybeans sold to Unknown this morning. Export inspections were as expected for both corn and beans this morning. Corn was near the high end of expectations, but thoughts are still that SA will start to take that business away. Wheat was the real dog today down a dime and that might have put some pressure on the corn market as well. Lets look for turn around Tuesday to break the streak lower tomorrow.
Grains continue to trade lower after yesterday's bearish stocks report. South America remains being the main topic of interest. Crops look fantastic in Brazil as the USDA alluded to yesterday. Argentina crop also look to be improving. Until they have a hiccup or we get a surprise in the planting intentions we are stuck trading sideways to lower. We have been stuck trading this range for 4 months now and that looks to continue. I wouldn't be in panic yet just because we broke off the highs. We don't even have any crop in the ground yet besides wheat. A lot of things can happen from now until the crop is in the bin.
CONAB was out this morning with their Brazil estimates and raised both their corn and bean projections. They pegged beans at 107.6 mmt and corn at 88.9 mmt. That was bearish news, but I also think it was expected news. Export sales this morning were on the low end of expectations, so that was also neutral to bearish. The USDA was out at 11:00 AM and also threw out a few surprises. I mentioned yesterday that they would lag behind CONAB, but instead they leap frogged them. They estimated the Brazil bean crop at 108.0 mmt and their corn crop at 91.5 mmt. Both were much higher than the average guesses were and in turn jumped the world carryouts. World corn carryout for 16/17 was pegged at 220.68 mt vs guesses at 218.5 mt. World bean carryout was put at 82.82 mt vs guesses of 81.5 mt. US corn carryout was left unchanged at 2.320 billion bushel. That was neutral. US bean carryout was raised to 435 million bushel up from 420 million in Feb. It is going to be very hard to get any type of push higher with these figures. March 31st will be our next shot with the planting intentions report.
Today was another very quiet day as we head into the USDA report tomorrow. Estimates for the US corn carryout are pegged at 2.317 billion bushels. Will they raise US exports or just leave them alone assuming we are going to lose business to SA? On the bean side the US carryout is estimated at 418 million. The same export question is in play on the beans as many are thinking the Brazil bean crop is going to be huge. CONAB is also out tomorrow morning with their Brazil estimate. I mentioned yesterday the USDA is currently using 104 mmt for Brazil. Other estimates are much higher. I would guess that the USDA continues to lag behind on their guess and will throw out approximately a 106 mmt projection. Most experts are not expecting a market reaction to this report, but one never knows. I have a very hard time seeing how it can be bullish. I think we will have to wait for the March 31st planting intentions report to have a bullish tilt on corn acres.
Bigger South American crop still the main focus today. There are thoughts that Brazil could have a 110 mmt bean crop. There are lots of 108 mmt guesses out there, but remember the USDA is still at 104 mmt. That should change on Thursday. CONAB will be out on Thursday morning as well before the USDA issues their monthly report. Brazil road conditions have improved and the trucks are moving to the ports once again. More bird flu talk as another case was found in Wisconsin today. That is bearish to the grains as well, so hopefully these cases stay limited. South American exports are looking to be ahead of pace, so it remains to be seen how much that will affect US exports. Some experts still believe we need to raise US corn exports because we are well ahead of pace. Could that happen on Thursday? That could cut our carryout if it did happen, but I think it is a little early for that yet just in case we start to see cancellations.
Today was a very quiet day in the market as the market seems to be waiting for the monthly USDA report on Thursday. There is a bird flu case in Tennessee over the weekend affecting a large chicken farm. Hopefully they can contain that before the issue can get any worse. Export inspections were solid this morning for corn and beans as they came in at the high end of the guesses. The markets just shrugged that news off and traded lower after those numbers came out. Will these exports start to tail off as South America starts to ramp up exports and how fast does that occur? Basis continues to be weak on both corn and beans and that looks like it will continue. Beans should start to firm up at some point, but we have a lot of beans to work thru locally compared to last year. There just isn't much news to report at the moment, so we just chop around.
Very quiet day today as the markets didn't move much and the volume seemed light. For the month of March we are watching four main focuses. Brazil and Argentina 2017 production, as it will have a major impact on US exports. Right now they are looking good as I mentioned yesterday with Informa's numbers. We are also awaiting any news from the political front for any RFS changes. The big one we are waiting for in the March 31st planting intentions report, expecting more beans and less corn. Spring weather is the other major contributor as we get towards the end of the month. That could also be a factor to how much corn or beans gets planted. For now it still feels like it is going to be hard to break out of these ranges, but those 4 factors will ultimately decide.
Have a good weekend!
Exports sales were on the low end of expectations and that is when the selling picked up this morning. All week we have been higher on the political unknown to the RFS guidelines. Today, however was a technical disappointment as we couldn't push through resistance levels. We now have corn with a double top at 4.04 Dec and beans with a quadruple top in the last four months at 10.35 Nov futures. It is not going to be easy to push through these levels anytime soon. The next USDA report is on March 9th, but the "big" report is not until March 31st, which is planting intentions. Expectations are out for that with the USDA conference showing 90 mil corn and 88 mil beans, but if the corn bean ratio stays where it is at we could be closer to 90 mil on the beans. The wet weather in Brazil will cause some delays, but it is exactly what their second corn crop needed. Informa was out today and jumped their estimate of Brazil corn to 91.0 mmt, up 2 mmt. They also jumped Brazil bean production up to 108.0 mmt, up 1.5 mmt. I would expect tomorrow’s market to be quiet heading into the weekend.
The new month brought in new money today and it showed up in a big way. Yesterday we had the news of RFS changes and we are still getting conflicting reports, but whether it is true or not it has the markets excited. President Trump’s speech last night was deemed well received by everyone and the outside markets are showing that today. The DOW is making new highs up over 300 points today. In the end of January we broke 20,000 and today it broke the 21,000 level and currently is near 21,150. Corn and beans had a great day once again and closed right near the highs for the day. The high for the move on corn is only 5 cents away. Basis is hanging tough for now, but if we break thru these highs I am guessing that will change in a hurry. The bean highs are still 37 cents away. I think that will be tougher to achieve as the world bean situation is still comfortable. The other bullish bit of bean news today was that the main South American highway BR-163 is having major issues due to flooding, which is not allowing the trucks to get to port. There is a rumored 3,000 - 4,000 trucks at a standstill. Insurance levels are now set with corn at 3.96, beans at 10.19, and wheat at 5.65. Make sure you have orders working on corn near the highs at 3.17 cash or so.
Today we saw the result of what a single headline can do the market. Right out of the chute this morning things were trading slightly higher when talk broke that the president was going to sign an executive order that would increase US corn ethanol use year round and curb the biodiesel imports from Argentina. This would ultimately increase the domestic use of corn and the funds loved to hear that news and the markets reacted very quickly. Corn just recently traded down 19 cents in the past 7 trading days and at one point today got within 2 cents of those highs. Beans traded up as much as 34 cents today as well. The only problem is it didn’t last very long. News broke this afternoon from White House Spokeswoman Kelly Love and said "there is no ethanol executive order in the works". That is how fast news can spread from a single headline, yet it was just a rumor. If we didn't have orders working, it was unlikely we traded anything near the highs today. Buy the rumor, sell the fact.
Export inspections were solid for corn at 1.461 mmt vs 1.169 mmt last week. Beans were slightly under expectations at .705 mmt vs last week at 1.09 mmt. The markets continued the trend lower today, but it is starting to feel like the bleeding is ready to slow for now. It will be interesting to see if 3.65 May corn support can hold. Beans could still potentially lose 20 cents before they get to any kind of strong support. Hedge funds remain long on corn futures due to the thoughts of reduced corn acres and the continuation of record ethanol production. Other than those factors however, there just doesn't seem to be much bullish news. There is more talk today of China slowing their needs on Soybeans and also Argentina is said to be loading a boat of Soybeans for Mexico. First notice day for the March futures is tomorrow.
The USDA outlook conference was out with their guess on next year's balance sheet and the carryouts are currently right near this year’s levels. They pegged 17/18 corn carryout at 2.215 billion vs our current year at 2.320 billion. They projected an on farm avg. price of 3.50 vs this year at 3.40. The biggest changes to the balance sheet include ethanol use up 50 million bushel, feed usage down 150 million, and exports down 325 million. The change in the exports would be due to the big South American crop. On the bean side they pegged 17/18 carryout at 420 million, which is the same as our current projections for this year. Their guess for on farm avg. prices is 9.60, which is close to our current projections for this year at 9.50. The biggest changes to the balance sheet were crush up 15 million and exports up 75 million. Exports sales were out this morning and were bearish as they did not meet expectations.
The grain markets continue their slide lower as the Brazil harvest continues to look better than expected. Weather also remains near ideal for the Argentina crop as well. Agroconsult has raised their Brazil bean estimate to 107.8 mln tonnes, which is up from the previous estimate of 105.3 mmt. That is a pretty substantial gain and we are seeing the direct result hit the futures markets. We are down 50 cents on cash beans over the last week. We are nearing the first level of support, but there is still a good chance we lose another 20 cents fairly quickly. Corn has tried to hang around, but today it couldn't handle the pressure. Corn is down 14 cents over the same time period. Part of the reason corn might have had additional selling today is that South Korea cancelled a previous corn purchase from the US and switched to South America as they are cheaper for the March time frame forward. That was not good news for US exports. Will there be more of that to come with a big crop in SA? Even with the board breaking basis remains sloppy. Processors are gaining coverage due to the continue rail freight issues and logistical problems. The USDA outlook confrence is estimating US corn acres are 90 million vs 95 million last year. They are predicting the bean acres at 88.0 million vs 83.4 last year. Not too much of a surprise there from what the guesses were at.
Overnight markets had both and corn and beans trading higher, but that only lasted about 30 seconds after the coffee break this morning. The weather forecast for South America continues to be nearly ideal, which put the pressure on early. Corn did manage to close higher, but only by a penny. Export inspections were in line with expectations and continue to be on a good pace even with the delays in the PNW. BNSF rail continued to be sluggish over the weekend, so nothing new there. Freight continues to trade at very high levels. Basis continues to be weak due to the freight situation as well, as it gives processors an easy out to buy corn. Until the freight issue resolves itself it is going to be hard to get basis to firm back up. It could take until April/May once farmers go to the field. Solid corn support is around 3.60 March futures. Bean support is around 10.17 March futures. Beans have the most room to work lower if this sell off wants to continue. 9.90 futures or lower is not out of the question if South American weather holds.
Funds hit the sell button hard this afternoon after making new highs in both corn and beans for the move. Corn ended up down 5 cents and beans were down 18 cents, which both finished near their lows for the day. There is still some concern of too much rain in Southern Argentina for next week as 6 inches are forecasted in some localized areas. We will have to wait and see how that materializes. I have a hard time thinking the funds are ready to liquidate their long positions just yet, but we need to remember how much weather premium is still in the bean market. Some experts are estimating $ .50 - $1.50 of weather premium still in the beans. Like I mentioned yesterday, just look at last year’s insurance levels and you will see what I am talking about. Tomorrow is Friday and we are heading into a long weekend with Presidents day on Monday. There are no markets on Monday, so we will not be buying grain. Markets will resume Monday night at 7:00 PM. If you would like to put orders in on Monday we can do that.
Funds were back today buying grains across the board. It is pretty hard to find much of a reason why we need to trade higher on corn and beans besides the fund money flow. Ethanol production was down from the previous 2 weeks, but still remains at a very strong pace for the year. NOPA crush numbers were in line with expectations at 160.6 million bushel. South American weather threw in a bit of concern of too much moisture forecasted for Southern Argentina. We will have to see how that plays out, but for now their weather has been improving. There continues to be more talk about Argentina increasing their corn shipments to Mexico as the renegotiations of NAFTA take place. This could have a big impact on US corn as our current corn shipments to Mexico are up 8% from last year. Insurance levels are still being priced this month and continue to improve. This morning current levels were at 10.21 for beans and 3.96 for corn. I would like you to think about how this compares to last year. Last year the prices were set at 8.85 and 3.86. Beans are $1.36 better than last year currently and yet the world is sitting more comfortable on the carryout.
Rains in Argentina were less than expected over the weekend, so the flooding never happened this time. That sent a bearish tone over the markets this morning, but we did manage to rally higher during the session on good export inspections for both corn and beans. Corn broke through 4.00 Dec futures by a half cent, but still couldn't manage to close above that level. Other news was very quiet today. In the final 5 minutes of trade beans were trading higher, but someone hit the sell button hard closing beans down a nickel. We will have to see if that carries into tomorrow. It still feels like beans have about $1.00 of South American weather premium built in, so make sure to get some sales on the books if you have not done so already. Insurance prices are still being set in the month of Feb for which we have 10 trading days left. Current insurance levels have corn at 3.96 and beans at 10.20. That is quite a bit better than last year.
More flood talks in Argentina had the market on edge today and the markets were able to move higher. We will once again have to wait and see if the threat is valid. Corn made new highs up to 3.75 March futures, but Dec corn is still stuck below 4.00 futures. 3.85-3.88 March futures remains the target. Have orders working at 3.25 cash. I am already seeing some signs line up showing that if we get that rally basis is not going to be able to handle the pressure. With corn moving higher daily ethanol becomes an even bigger struggle and plants are starting to back up basis. If the bin doors open on this rally that is only going to continue. Beans had a flash sale announced this morning to unknown. 10.80 March futures remains the upside target on beans. Basis had been telling us forever that we have a surplus, but the fund money is in control. Have orders working on old beans at 9.75 cash.
Have a good weekend!
The USDA report had very little change from January. US Corn carryout was at 2.320 billion, which was down slightly from the 2.355 in Jan. Beans US carryout was pegged at 420 million, which was unchanged from January. South American production was the major number we were looking for a change. Brazil beans were left unchanged at 104 mmt. Argentine beans were down slightly at 55.5 mmt due to the flooding. I think most people were looking for a higher Brazilian production that, but USDA left it unchanged. CONAB was also out this morning with their Brazilian bean estimate and they came up with 105.6 mmt. That’s a big difference. On the corn side the USDA pegged Brazil corn production at 86.5 mmt, also unchanged from January. CONAB estimated Brazil at 87.4 mmt. USDA estimated Argentine corn at 36.5 mmt also unchanged from January. There just isn't anything bullish that came out of the report, yet corn made a new high before breaking back into the red. With the report out of the way it looks like we continue to be range bound.
USDA report is tomorrow at 11:00 AM. Beans made another rally today ahead of the report, which puts them at a two week high. Corn is also at its high as we try and break out of the range once again. There were a couple bullish bits of corn news today. Chinese Govt. increased their estimate of Chinese corn consumption by 21 mmt to a record 197.6. Ethanol production continues to be on an impressive run as stocks continue to climb. The bulls want to see an increase in use for ethanol and exports tomorrow on the report. That is what it is going to take to break out higher. On the bean side they are also looking for a raise in exports. Chinese demand remains high, but South American exports will come into full swing shortly. If we do not get a raise in exports tomorrow I would expect the bean market to sell off. It feels like the markets continue to swim in beans. CONAB will be out tomorrow morning as well with their updated guess at SA production.
Corn and beans are both trading higher today on very little new information. Funds are now long both corn and beans. Beans are approaching their record level long once again. There are plenty of different ideas being thrown around for the report on Thursday. The question remains if we can get enough to spark the corn to break out of our current range. 3.71 March futures remains solid resistance, with 3.85 the next target. Basis still doesn't feel like we need to break out higher. Ethanol margins remain very tight, which is causing ethanol markets to back off slightly. PNW freight is still causing the commercials to sell their length out into April/May, which is also making nearby basis feel heavy. If the futures decide to take a jump I would expect basis to take a hit as well. The on farm stocks are huge this year and once the bin doors open it is going to flood the demand quickly. How much can the pipeline handle? Last year we had a solid corn export market June/July/Aug/Sept, but I would not guarantee that this year. Be thinking about making sales on corn and finding a way to re-own it on paper if you think the futures are going to rally.
Beans were higher today as the bean oil market leads the way. There were also thoughts that China will pick up their buying pace as they are back from their holiday. Brazil rains over the weekend have also slowed harvest slightly, which could have also played a role in the higher trade. The USDA will be out on Thursday with their monthly report and most are expecting a slight drop in the world soybean supply due to the flooding in Argentina. We know Brazil will pick up some of the slack, but how much? Export inspections were better than expected on both corn and beans, but corn failed to find any kind of a bid after trading higher overnight. The farmer continues to remain quiet as selling is light. For those of you with HTA's left to roll, the spreads are holding steady with corn at 7 cents and beans at 10 cents to the May Futures. Nothing much too exciting for news.
Another quiet day in the grain markets. Beans broke lower right out of the coffee break after trading higher overnight. For the week beans were down 22 cents and corn was up 3 cents. I would expect more of the same next week. Beans losing ground to corn and therefor tightening up the corn:bean ratio. Corn does not need to move higher if that scenario plays out. Informa was out today with their updated world crop estimates. They pegged 2017 world beans at 338.4 mmt, which was up slightly from their previous estimate due to a better Chinese crop. They also bumped the 2016 by 1.5 mmt due to a better than forecasted Brazil crop. Their 2017 corn estimate came in at 1,013 mmt, which was also higher than their previous guess by 15.0 mmt. They also raised the 2016 crop by 700 mmt due to a better Brazil crop. USDA is out next Thursday with their monthly report. The guesses very on corn due to different variations of ethanol demand, residual, and export use due to the good crops in SA and also possible US trade issues. Bean numbers are not expected to change much from Jan. Maybe lower the Argentina crop slightly, but raise Brazil to offset any loss.
Not much change today as the market basically sat still with the exception of Nov beans, which were up 6 cents. Export sales were solid this morning across the board. Corn exports were at 1.140 mmt, which were above the top end of guesses of 1.100 mmt. Bean exports were in the range of expectations at .624 mmt. That is good news, but after yesterdays rally it still wasn't enough to break out higher. Argentina had more rainfall last night with good coverage of .25 to 1.0 inches. The next 10 days are calling for normal precip in both Argentina and Brazil. We are pretty much stuck waiting for something new to trade. The next USDA report is next Thursday, so we could be stuck until then. February is the all-important insurance month as well, so it is good to see prices above last years level. It would be a good month to see prices break out, but I have a feeling there will be plenty of sellers pouncing if we can get another 10-15 cents in corn. If you are sitting on March HTA's it might be a good time to get them rolled. The March/May corn spread is trading 7.25 cents and it is hard to see it getting much wider from here. March/May beans are trading at 10 cents, with the potential to move to 11.5 cents.
The new month sparks new money interest. Today was a great bounce considering we didn't have a whole of news to spark it. Overnight sessions had everything lower and looked as though we were going to sell off today. Nov beans broke through the 10.00 mark early last night, but somehow rallied back to close up 11 on the day. South American weather is still better than it was last week. Rains in Argentina were better than expected yesterday. Weather is not an issue today. We did have a sale of beans announced to unknown this morning, which was good to see with China on holiday. Beans oil also helped lead the way higher on beans. On the corn side Ethanol production was large once again. Ethanol margins are tight, but the crush continues to be huge. Corn closed within 3 cents of last weeks high of 3.71 March futures. Don't forget about starting new crop sales around 4.00 futures on Dec corn as well.
Politics lead the way in the news headlines today and that could be spilling over into the grains as well. Financials, grains, and energy’s were all in the red today as traders hit the sell buttons hard. I argued last week that meal and soybeans could do most of work to close the gap between corn and beans and today was a perfect example. We will have to see if it continues. South American weather is on the improve and that alone should have been enough for the sell off in beans. We had a large amount of weather premium in that market. Farmer selling has hit a wall at these levels. How far can we go down? Corn Support is at 3.45 and 3.56 March futures as we continue stuck in our trade range. Bean support is at about 10.12 March futures, with 9.89 possible. Basis should be able to improve slightly if the selling continues. Rail freight remains a mess over the weekend. China is on Holiday this week. Month end is tomorrow, so the selling could continue as trades liquidate their positions off the big rally.
Not much changes today as the markets continue to digest the size of the South American crop and the changes to the US President. What is Mr. Trump going to do to our trade policies? Good or Bad? There are a lot of questions at the moment. Argentine planting is about wrapped up on both corn and beans. Weather has also improved. Brazil has a monster coming and harvest is already underway. Brazil should more than enough make up for the losses in Argentina due to floods. Beans feel like they continue to be top heavy and right now I feel like they are going to continue to trend lower. The corn : bean ratio is still out of hand at 2.6. We might need to encourage more corn acres. Will the Trump effect slow demand? Corn and bean basis continue to fall apart. Ethanol margins are poor. The processors feel covered thru Feb as a lot of grain has moved on this rally. There is nothing really friendly to help basis improve. For the week corn was down 7 cents and beans were down 18. The funds are still a healthy long in beans and if South American concerns subside we should continue to leak lower in beans and it would also relax the corn : bean ratio.
Another quiet day in the grain markets. Corn and beans both held initial support last night, but couldn't muster up much of a bounce off those levels. Corn caught a bid in the final minute, so we will have to see if we can continue that tomorrow. Make some sales at the high of the range at 3.70 futures if you have not done so already. Ethanol stocks were large once again this week. Export sales will be out tomorrow AM. Informa was out yesterday with their acres estimates. They predict bean acres at 88.648 million acres and corn at 90.489 million. Beans were down a freckle from their previous guess and corn was up a freckle. No surprises for the most part there. Rail freight continues to be the story as Jan freight just traded 3,500 bucks today. We have not seen these types of levels since about 4 years ago. The rail freight situation is keeping South America the cheapest source of grain by far. The US Dollar was down again today nearing the 100 mark. Feb 9th is the next monthly USDA report, but the next "big" report is not until March 31st.
Export inspections were solid on corn coming in at the top end of the guess. Bean export inspections were slightly under the low end of expectations. South American weather was good over the weekend with Northern Argentina staying dry after last week’s big rain event. The next week also continues dry with rains returning in the 10-14 day forecast. Southern Argentina got some welcomed rain over the weekend. Support held the first round of selling at 10.56 March futures. We were due for a break in the bean market after a nice rally. Basis continues to tell us a different story as beans moved in a big way last week. Corn is still stuck right near 3.70 March futures as we are trying to decide if we want to break out or not. Corn feels like it needs to rally to buy some acres, but if beans take a step back corn does not need to move higher. That is the scenario I see playing out at the moment. The US dollar continues its collapse, which should help make the US more competitive on exports. There are still concerns on the political front. We will have to see what happens with the new trade deals.
Not much changed today as the bean market is showing signs that we are high enough for now. Argentina weather is dry for the next 6-10 and that should help soak in some moisture. Basis continues to be very weak on beans and corn decided to join in today also losing a few cents. We did have a flash sale this morning of some corn, but looks to be routine business. We have not seen any bean sales for quite some time now. Farmer selling has been strong the last 3 days and if prices decide to break out further then selling will pick up more. We know there is a lot of grain in the country, so it just a matter of time and the market is just waiting for it. If the futures decide to take a step back then basis should improve, but it is going to take some time, especially on the beans. The market seems to be flooded and waiting for the river to open. Keep selling new crop beans at these levels. 10.42 Nov futures is the high and we are approaching that. If the experts are right and the corn: bean ration stays where it is at, we could top 90 million acres of beans planted next year. Last year we were just over 83.
Overnight markets were weaker, but that didn't last very long once the market opened after the doughnut break. Beans made a new high for the move today on continued worries of Argentine rainfalls. Funds continue to buy both the beans and the meal, but it almost feels meal led once again. We closed right at 10.75, which was yesterday's high. Selling was very heavy in final minute’s trade, dropping the futures 5 cents from the highs. This does open the door to 11.00 March futures, but I would have felt better about that if we would have closed above yesterday’s highs. Time will tell. The big worry in my opinion is if we see China cancellations with the big bean rally. If that happens it opens the door for a big drop. Corn futures also made a new high for the up to 3.67 futures, but dropped back to close unchanged. 3.70 remains the target. Is corn going to have to rally to buy acres? Do bean futures break before corn needs to buy acres? Those are two big question marks. Keep an eye on South American weather. Basis continues to paint a different picture in the bean market. That usually means this is a selling opportunity.
Today was a wild day following the holiday weekend. Rains over the weekend in Argentina were way too much in certain areas. Some reports totaled 6-14 inches locally with heavy localized flooding. Corn is 91% planted in Argentina and this could put a halt to that for a while. It will be interesting to see how this plays out because Brazil is still having nearly ideal conditions and that could make up for the difference. Also the forecast in Argentina for the 6-10 day is hot and dry, so that should help the area that got rain. Export inspections were better than expected for beans and corn were good as well. NOPA crush results were 160.2 million bushels vs an expected 162.8, so that was bearish. Beans tested 10.75 March futures, but could break through. I think that level holds for now. Corn was pulled higher on bean and wheat strength and seems poised to test resistance at 3.70 March futures. Corn and beans seen big movement today and that will continue at these levels. Bean basis puckers big time tonight, but corn managed to hold still for now. Look to price some more corn and beans near those target levels.
Export sales were out this morning. Corn and wheat fell in the estimated ranges, but beans were lousy. On that note we started the morning very quiet with little movement in either market, but that changed at 11:00 when the USDA report came out. Everyone we leaning bearish and we all know what happens when everyone is on the same page…..the opposite! The USDA dropped the US soybean carryout 60 million bushel. That is the only headline that mattered today it seems, but there is more. The USDA raised the Brazil estimate to 104 mmt, which is enough to offset the US change and the world carryout stayed unchanged at 82.3 mt. Up 29 cents today is a little over kill in my opinion, but the funds love to play in the beans. Meal is the bigger story up 13 bucks on the day. Every time we have gotten a rally lately it seems like it is meal lead. I don’t trust it. Corn futures dropped initially on the report as the Dec 1 stocks were higher than expected. Corn carryout was very close to average estimate at 2.355 billion bushels. Even with beans up strong it could barely get corn into green figures. This report just solidified we are stuck in our trading range for even longer.
Corn traded a 5 cents range today as we traded both sides of unchanged. Beans traded higher all day and finished near the highs for the day up 11 cents. Export inspections were slightly better than expected, which might have sparked the market a little bit to finish near the highs. Other than that news remains quiet once again. Farmer selling remains slow. Favorable China soybean crush is also noted today, which is supportive to US beans. South American weather looks to be good at the moment. I wouldn’t expect much change ahead of the report on Thursday. Most people are still leaning towards a slightly bearish tone. If we get a chance to move corn up a nickel from here ahead of the report it might be a good idea. This report is a big one and will set our direction until the March planting intention report.
Beans managed to hang onto support and bounce nicely today. We are still range bound in both corn and beans and I would expect that to continue for a while. Corn tried to break through initial resistance at 3.60 March futures, but couldn't break through it. It will be interesting to see if we can do it tomorrow. 3.69 March futures is still the big target. Movement today picked up slightly again, but nothing major. There is more rumors of spots in Argentina being too wet, which could have helped get the bounce started today. Palm oil also gave the soybeans a boost. We need to continue to sell the upper end of the ranges on both corn and beans. Have some orders working around 3.10 cash corn and 9.30 cash beans. It is going to be tough to break out higher than that ahead of the report on Jan 12th.
The start of the New Year is here, but nothing has really changed in the grain markets. News remains quiet. The farmer remains quiet. The weather remains cold and little grain is expected to move in the near future. South American weather still has a couple concerns. NE Brazil continues to dry out, but they do have a chance of rain in the near future. There is now some talk of parts of Argentina being too wet. Things are starting to remind me of our US drought in June/July……Never Happened! Export inspections were poor for corn last week, but it was also a holiday week. Bean inspections were in the range of expectations. There just isn't anything else to talk about today. We are still looking for March corn futures to trade in the 3.60-3.70 range. If it happens lets sell some. Have orders working there is you desire. Just don’t miss it. The next report is on Jan 12th and most are leaning towards the bear side.
The end of the calendar year has arrived. Happy New Year to everyone. We had a quiet end to a very light week of trading. Export sales were solid for wheat and meal. Corn exports were in line with guesses. Bean exports fell below expectations. Beans had an interesting day today as we started lower, then traded up 6 cents, but finished down 9 cents. The US Dollar might have given it a slight boost as it traded down almost a full point at one point. Year-end positioning could be blamed for the sell off in the final minutes. Other news was very quiet once again. Cold weather returns in the U.S. next week. The forecast in Argentina is wetter for the next 1-5 day and 11-15 day forecast. The Monday afternoon forecast will be key for next week’s direction. USDA report is Jan 12th. Grain markets are closed Monday, but reopen at 7:00 pm.
Today was another very non-eventful day. Volumes continue to be very light as we are in the middle of a holiday week. Tomorrow is the last day of trading in the calendar year, so we should see some position squaring as always. The markets are open the full session tomorrow, but are closed on Monday. They will re-open Monday night at 7:00 PM. South American weather will be the main lead over the long weekend as we basically have nothing else to trade at the moment. We do have export sales out tomorrow AM, which could help set a direction for tomorrow. PNW corn and bean basis continues to improve, but rail freight continues to eat all and more of the improvement. Cold weather and poor railroad performance are to blame. It will be interesting to see how long it can continue, but it is getting very ugly.
Yesterday the market rallied on little news and the thought of Brazil weather could turn drier. As it turns out, it looks like corn over did itself as we almost completely erase yesterday's gain. There was some farmer selling yesterday, but that dried up by this afternoon. The ethanol report is out tomorrow and export sales will be out on Friday due to the holiday. Trade volume also looks light due to the holiday week. News is scarce as we just continue to wait for the Jan 12th report and watch South American weather.
The markets were able to put on a little post-Christmas rally for everyone today as funds covered some shorts from last week’s beat down. We are about ready to jump into a new calendar year, so that also could play a role to have funds to covering shorts in corn. Export inspections were solid for both corn and beans today as they fell right in line with the high end of expectations. We know our exports are strong now, but the spring/summer months are concerning to me. South America is still much more competitive than the US for that time frame. It will be interesting to see if that changes. South American weather will be a key factor in that. Weekend rains were better than expected for Argentina and there is still more in the forecast for the next 5 days. It surprises me that the futures were able to rally this much today on that news alone. Let’s see if we can hold onto it this the rest of the week.
Beans break further on more rain in Argentina. We are getting closer to 9.92 Jan support. It will be important to hold that level or there is a chance we could make a break for 9.50. New crop beans have also broke beneath 9.00 cash, which will put a halt to farmer selling there as well. We did have a sale of corn announce to Mexico, which is just routine business. Export sales were good for both corn and beans, which has been a consistent theme lately. The market just seems to expect it to be good every week. There just isn't a lot of new information to trade beside South American weather. Grain markets close at noon tomorrow for the holiday weekend, so I would expect a light volume day. Hopefully we can hang onto these support levels.
Today was a very quiet day with corn trading in the red for the 5th straight day. Corn is now down 9 cents for the week and beans are down 30 cents. We had a fresh sale of beans announced to China this morning of 132K tons. Here are a few more quick facts about the current demand. Corn for ethanol demand is running 36 million bushels ahead of its seasonal pace. Corn exports are running 11 million ahead. Bean crush is running slightly behind pace by 2 million bushel. Export inspections are more than 200 million ahead of the 10 year seasonal pace implied by the USDA. With that being said we are expecting a record pace for all of which this year, but it is good to see the business is taking place. We also need it to continue if we are going to meet expectations and have a home for the big crop this year. Farmer movement has slowed for the holidays, but many expect it to pick up early next year. Basis continues to improve slowly near term, but if the board rallies and farmers start to sell, the improved basis is not going last very long. Everyone has a lot of bushels to move this year and the market knows it is going to come at some point.
We broke through 10.20 Jan support last night within the first hour of trade and it just continued to go lower from there. Brazil is expecting a very large crop that could come close to 106.0 mmt. With the rains that fell in Argentina and more in the forecast they are also off to an ok start. Normal weather in SA in January could lead to a record world soybean carryout. The same story occurs in the corn market. Brazil is estimating their corn crop at 88.0 mmt vs last year at 67.0 mmt. That is a lot more corn available to export as well. The US dollar remains over 103.0, which remains plenty high and could go higher with more interest rate hikes in the near future. What do we do from here? Corn seems cheap at these levels, but looks to stay rangebound.3.70 March futures remain my target, but it could take a while to get to that point. Farmer selling has dried up at these levels, so basis might need to do more work. Bean support is now at 9.93, which is still 12 cents away. I would look to test that level before we have a chance to move higher again. Just remember that the world loves beans and we usually always find a home for them at some point.
Argentina received better than expected rains over the weekend and has more in the forecast for later this week. That is the one news that we needed to roll the market over. The good news is that we managed to hold to hold 10.20 Jan futures once again. That could change very soon though. If we break through 10.20 it opens the door to 9.93. Export inspections were near the top end of the guesses on beans, but poor for corn. Corn traded down 3 cents today as they followed beans. South American weather looks normal for the next week. I have heard some reports that early Brazil soybean harvest could start in the next 7-8 days. Basis continues to improve slowly, but BNSF freight is still getting more expensive. The next USDA report is not until Jan 12th. All we have to trade until then remains South American weather.
It looks like it is going to rain in Argentina over the weekend and then again next week as well. Sunday nights weather will decide which direction we want to trade for the current forecasts have shifted the rain slightly north, so we will have to wait and see where is falls. USDA had a flash sale announced of 205,000 tons of beans to unknown. So far this week China has bought 20 plus cargoes of US beans, with at least half of them off the PNW. It will be interesting to see if we can basis to improve or if the rail freight just offsets that as well. Lower currency and high margins is helping China buy soybeans for import. It was a positive sign to see Jan bean futures hold 10.20 this week. That will be the key level to hold next week as well.
Overnight markets were very quiet. Export sales came out this morning and we great for both corn and beans. Corn was pegged at 60 million bushel. Total commitments are now at 1,303 vs 736 last year. Bean exports were pegged at 74 million. Total commitments there are 1657 vs 1,283 last year. Initially the markets didn't even react to these numbers and were trading slightly lower at the coffee break. At about 9:30 beans popped and jumped about dime in the matter of a couple minutes. The reason for the pop could have been purely technical that we managed to hold 10.20 Jan futures. The US dollar is again offering some massive resistance to grains as we are up another full point at 103.00 due to the feds raising interest rates. There is also talk that there are more rate hikes to come. The dollar is not going to help US exports. Rail freight has now moved sky high for nearby freight, which seems to be holding basis improvements back in the country. Informa was out this this morning had corn yield at 176.1 up from 174.0 in November. They had the bean yield at 52.8 vs 52.4 in November. 2017 corn acres at 90.15 million, down 4.2 mil from last year. 2017 bean acres at 88.9 mil up 5.2 mil from last year.
Another very quiet day in the grain markets. Brazil weather is still nearly ideal. Argentina has added more rainfall for next week, so now we just need to see if it actually happens. Ethanol took a hit of about 6 cents today as production was at a new high for the week. There just doesn't seem to be anything for news that wants to move the market one way or another. The bulls are still clinging onto ideas of inflation coming into the commodities next year and are still building a long position in beans. The bulls continue to buy the breaks in the market. They also see some bean oil production issue, which could limit the downside in beans. The bears on the other hand see ample supply at the moment. Weather looks to be turning wetter in Argentina. Brazil weather is nearly ideal. The US dollar has rallied 6% over the past 6 weeks, which makes us less competitive in the world. Current projections have bean acres at 88-90 million for next year in the US compared to 83.7 million this year. Keep that in mind when you are thinking about next year. Nov beans over 10.30 futures should be looked at. 10.50 Nov is a strong target at the moment. Have orders working if you have interest. Don't fall asleep and not look ahead to next year
Corn tried to be the leader today up 4 cents at one point. Farmer selling picked up some, but still remains minimal. 3.69 - 3.74 March futures remains the target on corn. Beans were quiet today as the forecast in Argentina has normal rains for next week. Ethanol plants are enjoying some hefty margins after ethanol was up 7 cents yesterday. Basis improves on that end of the corn market. BNSF freight is getting very expensive with the cold temps and holidays approaching. Every uptick in PNW basis is due to the higher freight, so basis effectively doesn’t improve in the country. Cold temps have the trucks parked as nobody wants to move any grain, so the only sales being made are on Price Later bushels. New delivery is going to be slim until the New Year, which is another reason ethanol plants are searching for corn to get enough covered to cover the holidays. The markets are basically stuck waiting to see if it rains in Argentina next week and the Jan 12th report.
It was a very quiet day to start the week. Beans tried to break out overnight trading up 9-10 cents, but by the time we woke up this morning we were trading lower. We had another sale announced this morning of 256,000 ton of beans to China for this year. Export inspections were poor for corn at 33.9 million bushels, which is much lower than the 41.3 million that we need to meet the current projections. Bean inspections were solid at 67.5 million vs the 25.6 million needed to me the current projections. South American weather is still the key at this time. The Brazil forecast continues to look good. The southern portion is slightly dry, but not hurting at the moment. Argentina does have rain in the forecast for the later part of this week, so it will be key to see if that actually materializes. Ethanol is on a tear today up over 7 cents. Corn basis continues to perk up slowly as movement remains fairly slow. Bean basis remains sloppy to start the week. My target remains 3.69 March corn futures to make sales on corn. Beans sales at 9.50 cash still make a lot of sense. New crop bean sales above 10.30 Nov also look very appealing to me.
The USDA report was exactly what we expected it to be. The USDA pretty much left everything unchanged from last time. Brazil corn was up 3 million tons from the previous USDA guess. Brazil beans and all of Argentina were left unchanged from the previous USDA guess. World corn and bean stocks were both higher than the previous estimates. So there was nothing bullish in this report. We traded both side of unchanged after the report, but for some reason heavy buying took place in the last half hour of the trade. South American weather will be key to start out next week. The next big report is not until Jan 12th, so we have a while to trade this information.
Not much action today in the grain markets. We had some more bean sales announced this morning. 136 mt to unknown, 264 mt to China, and 66 mt to China for the next marketing year. Those sales might have got beans back to green figures today. Weekly ethanol production was above last week and also higher than last year. Ethanol stocks were above last week, but lower than last year. Margins are still positive on ethanol. We have the monthly USDA report on Friday. It is hard to think anything real bullish can come out of it and it is looking to be a ho hum report. The next "big" report is on Jan 12th. South American weather has not changed much. Brazil 1 week weather calls for normal rains across the central and north areas but south could be dry. Argentina's next 10 days look dry, but chances of rain come back for the 11-14 day. Time will tell. Export sales will come out in the morning. Beans have a shot at testing the highs ahead of the report, but I would have orders working there. I would expect some selling pressure ahead of the report coming off a nice rally.
Markets caught a bid again overnight and moved beans within 3 cents of their high back on Nov 28th. There is still a concern with the unknown of Argentine weather as to how long the dryness will last. Let’s take a look at the bigger picture here… Brazil is estimated at 90% planted, which is slightly ahead of pace. Weather looks good in Brazil. No problems there. Argentina is pegged at 46% planted, which is behind their normal pace of 54%. The 2 weeks of dry weather is going to allow them to catch up. Why are they delayed planting in the first place? Too wet? Then the dry weather should be beneficial for the next 2 weeks. Traders always want to look beyond 2 weeks and try to predict the future and to be honest our weather professionals have not been very reliable at that. Just look back to June and see how our drought turned out. The money is always in control of the markets and it gives us great opportunities to make some sales. I for one think this is a great opportunity. Look to make more sales near 3.68 March corn futures, 3.95 Dec 17 corn futures, 10.63 Jan bean futures, and 10.40 Nov 17 futures. We are strictly in a SA weather market, so the volatility will be high. We have USDA report on Friday. Just one more tid bit before I get off my soapbox today. Last December we had the world bean carryout at 82.6 mmt. We were trading a range of 8.60 – 9.10 futures at that time. Friday we are predicting a world carryout of 81.0 mmt. We are trading futures in a range of 9.75 – 10.60. Do you see anything wrong with that? Just saying…….
Export inspections were solid today for both corn and beans as they were slightly higher than expectations. Argentina weather looks dry for the next two weeks. They do have rain chances after that, but confidence is low on the forecast. Remember what our weather market was like this summer….here we go again. It is hard for me believe they dried out completely over the weekend after everything was good as of Friday. Long range forecasts are leaning towards drier weather Dec-Feb and that’s all it takes to put some fear in the market. We did have a sale announced to China this morning for beans. There are also rumors flying of a bunch more corn and bean sales to China, both US and South America. The US dollar took a hit today down ¾ of full point, which also helped the grains. Corn bounced today as we jumped a dime in about 10 minutes. We broke through the 50 day and 100 day moving average in that short time span, which caused additional short covering. The next big level of resistance in corn is at 3.69 March futures. Both corn and beans were moving today.
Not much news today other than the export sales. Corn was poor at .761 mmt vs estimates at .900 - 1.200 mt. Beans were 1.390 mmt vs estimates of 1.000-2.400 mmt. Overnight markets were higher once again, but were already trading in the red at the coffee break. Corn broke through support at 3.43 March Futures and we couldn't manage to close above that level, so that is bearish near term. Beans tried to battle back after being down 9 cents, but still closed lower. Crude oil is the leader again today, up another 2 bucks on more follow through from yesterday OPEC deal. Corn processor basis continues to pick up slightly as farmer selling in corn is slowing even more with the futures struggling. Bean basis is still a struggle as we try and get more competitive in the world.
Month end today and the pressure continued on the grain markets. We had beans up 9 overnight and for a few minutes this morning, but that didn't last long. Crude oil is the big story today up over 4 bucks on an OPEC production control deal. We another sale announced to China this morning for beans, but we also hear more rumblings of China buying a slug of beans out of Brazil for Feb and March. The US is just not competitive at the moment. The US dollar is up strong again today now at 101.50. That is not helping get more exports on the books. Basis continues to be weak on soybeans. On the corn side of things we have a slightly different story. Ethanol plants are starting to show signs of life with little new farmer movement. Rail bids seem to have found a bottom and are up slightly. The futures are helping the cause to get basis to improve. For the month corn was down 14 cents on the futures and beans were up 21 cents. It was an interesting month to say the least. It will be interesting to see if this money wants to come back tomorrow in the bean market to start a new month.
Overnight markets had beans up nearly 19 cents at one point. 10.60 Jan Futures was our target and we even managed to break that level just after midnight as it broke out to 10.65. We never tried to reach that level again throughout the day as 10.60 held. I am still looking for a sell off the next couple days as month end is upon us and we are due for a correction. Since November 17th beans are now up 67 cents. That type of rally deserves some sales. Selling did pick up today for both old and new beans. Orders filled for cash N/C 17 beans at 9.50 last night, so if that sounds attractive to you lets get some orders in. Bean export inspections were solid at 76.8 million bushel vs expectations of 66.1-77.2 million. Basis weakens today on heavy farmer movement. Corn on the other hand has done very little. Today we had about a 3 cent range all day long. Export inspections on corn were lower than expected at 31.5 million vs estimates of 33.5-41.3 million. Since November 17th corn is up 6 cents. We just can't seem to get any life in corn. Lets look for some turn-around Tuesday action tomorrow as funds take some profits.
Export sales were phenomenal this morning as both corn and beans were well over expectations. Bean exports have bounced back nicely from the big drop two weeks ago and today were almost double that number at 69.76 million bushel. That was enough to spark the bean futures to make another leg higher. 10.60 Jan is still the next target. There are only 3 trading days left in the month, so look for a continued bounce early next week with a possible sell off to close the month as the funds lock in a nice gain for the month. Corn exports were a tick higher from the previous week at 66.5 million bushel. Total commitments on corn are way ahead of last year at 29.3 million tons vs 16.6 last year. That is a good sign, but corn is still reluctant to follow beans on this rally. Hopefully you had a good Turkey day and have a good weekend as well. Travel Safe.
Beans continue their march higher after an early morning sell off. Bean oil continues to be the story up another 2.40 today. EPA announced advanced biofuel 2017 Mandate higher than expected today. The mandate was 280 million gallons above the estimates. This tells us a great part of why soybeans are rallying, but be careful. This is still fund driven and things can change quickly. EPA also jumped the 2017 ethanol mandate by 200 million gallons, which would equate to about 70 million bushels of corn. Everything helps when we are looking for a home for a record crop. Corn basis seems to be finding a little support, but its slow to recover. Bean basis…not so much. I think a March or May HTA is a great idea for beans that you have in the bins. We can lock in these futures and give basis some time to recover. Let me know if you have any interest in that. This close on beans is a new high close and like I mentioned yesterday this opens the door to 10.60 Jan futures. Market is open until noon on Friday.
Fund buying continued today as we managed to break through some stop orders at 10.31 Jan futures, which was the high from 10/27/2016. This opens the door to some additional buying with the next level of resistance at 10.60 Jan. Basis continues to tell us a completely different story than the futures. Rail markets are garbage and look to continue to struggle as South America wants to export beans earlier than normal. Brazil beans are much cheaper to China starting in January, which is not a good sign for U.S. exports. Processors were starting to get hungry for beans, but this rally should have helped them get some coverage. Farmer sales picked up even more today for both old and new beans and that should continue. There is almost no reason behind this rally except for fund buying, so please keep in mind how fast things can change once the funds decide to take profits. Make some sales at these levels. Corn has been a reluctant follower and doesn't seem to want to participate.
Today was a product of fund buying into the Thanksgiving holiday weekend. Outside markets were all able to chime in as well and support the grains. Crude oil up nearly 2 bucks, the Dow up 60 points, and the dollar is down slightly. Export inspections were all better than expected once again, but remember we need every bit of them to stay on pace. Beans soared higher today and closed right at the top end of the range at 10.20 Jan futures. This is a level that should see a solid round of selling pressure. N/C 2017 sales also picked up today as we approached 9.15 - 9.20 cash. South American still looks good, so it seems weird to me that the funds want to continue to add to their length. Will this continue for the rest of the week as the volumes get lighter? I think this is great opportunity to add to sales for both old and new beans. We know that the world is still swimming in beans today and without a problem in South America the funds are going to have a hard time adding to their position to break us out of this range. Corn was also up 4 today, but is still about a dime from the top end of its range. Selling did pick a touch on corn today as well.
We had another USDA announcement to China today of 165,000 mt of Soybeans. Yesterday the grains tried to rally into the close on the excellent NOPA crush number on soybeans, but we couldn't manage to hang onto the gains today. Nothing has really changed overnight as neither the bull or bear has anything to grab onto at the moment to break out of this range. The only factors staring in our face today is the huge supply and good early demand to start the year. We are stuck in a range for now and that looks to continue for a while. We are stuck waiting to see how the South American weather looks to get their crop started. We are still picking up hints that SA has more old crop beans available for export. It seems like more volume is available all the time and every little bit they have is a negative to US exports. Keep that in mind. Farmer selling has completely shut off, so we will see if basis can react. For now it seems like a pretty slow improvement. Export sales are out tomorrow morning.
NOPA crush for October was excellent and above even the high end of the guesses at 164.6 million bushels. A new record high for October. That might have helped futures a touch, but the bears are still in control and look to trend this market lower on the USDA report big supply numbers. Most traders agree with the 480 mil bushel carryout that the USDA provided. If we have higher bean acres in 2017 as projected we could see the 17/18 carryout near 540 million. That paints the bearish scenario without a weather problem in either the US or South America. Funds are still long in beans and if we don't have a weather problem in South America how long can they hang onto that position? Corn traded up 4 cents today and is only about 2 cents away from the 100 day moving average at 3.43 Dec Futures. The general theme is that corn needs to trade lower just to entice more export business. We are still stuck in the trading range of 3.20 - 3.60. Look for that to continue.
Pressure in the grains continues as the US dollar is up another full point breaking the 100.0 mark for the first time since December of 2015. The Brazilian currency was once again a little softer. None of which is going to help U.S. exports any time soon. Brazilian soybean plantings are estimated 63% complete, which is ahead of last years pace. The #1 state of Mato Grosso is estimated as high as 90% complete. Farmer selling in SA has also been very heavy due to the break in their currency. The USDA did announce a couple sales today of Sorghum and Soybeans. Bean export inspections were solid for the week at 102 mil bushel. Corn inspections were poor at 24 mil. Harvest progress will be out tonight at 3 pm. Tomorrow NOPA will be out with their estimate on US October crush. China government is starting to crack down on speculation in their commodities, which is triggering some liquidation in their grains. We will have to see how that plays out. The first level of support in Jan beans is at 9.67, the second level of support is at 9.40-9.45. Those levels are very possible to achieve.
Overnight markets were wild once again. Beans traded 20 cents higher at one point and were up 10 on the coffee break. Instantly when the market opened back up at 8:30 they turned lower. One of the main reasons for the commotion is the Brazil currency falling apart. Because of their currency cheapening up it makes them more competitive for exports over the U.S. They also said it has sparked some interest in farmer selling in Brazil. I mentioned last week that we could have a very volatile week and we have had just that. Outside markets have been a huge factor. The USDA report was very bearish. The election still has a lot of pros and cons to weight out yet. Look for the volatility to continue for a while with a bias towards trading lower. Farmer selling has completely shut off, so we will see if that starts to help basis, but for now the market is flooded with grains. Ground piles will need to be picked us well, which will bring more grains into the nearby markets. Today is Veterans Day and I would like to thank everyone that has dedicated their service to our country. Have a good weekend!
Overnight markets had a wild range in beans. At one point overnight beans traded up about 25 cents, but couldn't manage to hold onto that much a gain for very long. At the morning break beans were up 15 and we chopped lower than that the balance of the day. Export sales this morning were good for corn and poor for beans. USDA announced 140,000 tons of corn to Saudi Arabia and 126,000 tons of beans to China. Everyone is still searching for a reason for the bounce overnight. Cash beans over 9.00 deserve a sale if you have not done so already. With the report in the books and the election out of the way I would expect to stay range bound for now with a chance to move towards the lower end of the range. Outside markets are higher again with the DOW up 250 points and the dollar up .300. U.S weather continues to be warm and dry and allowing harvest to wrap up.
Yesterday the markets acted like election was over before it started….Then when the tide turned last night the outside markets went into a panic. The outside markets tanked instantly before battling all the way back and finishing higher almost across the board. The Dow had a range of about 1100 points today. Trading down 900 points at one time and is currently up 200 points. Crude was down about 2 bucks and is currently up 30 cents. The US Dollar was down 2 full points and is currently up .75 points. It is not often we get to that much volatility in all these markets. To top it off we had a USDA report today. The news was very bearish across the board. Corn yield was expected to drop slightly with the average guess at 173.2 bpa. Instead the USDA raised it nearly 2 full bpa to 175.3. That put production up to 15.226 billion bushels up about 169 million bushels from the October estimate. The 16/17 US corn carryout got pegged at 2.403 billion bushel. That is up 83 million from the October estimate. Bean yield got pegged at 52.5 vs an average guess of 52.0. Bean production is at 4.361 billion bushels up 92 million from October. US Bean carryout got pegged at 480 million vs 395 in October. The big surprise on beans was once again the global carryout. The USDA pegged the world carryout at 81.53 million tonnes vs an average guess of 76.98. Bottom line is that we have huge supply both in the world and the US.
Election day…Go get your vote in. Believe it or not 6 out of 6 times the market has been up on the last 6 election days. The problem with that is, 5 out of 6 days the market has been lower on the following day. Tomorrow will be another crucial day as we have the USDA report at 11:00 AM. Thoughts are that corn yields will be slightly lower with estimates around 173.2 bpa. Beans yields are guessed higher at 52.0 bpa. I could see the bean yield being higher than that. Basis continues to be very sloppy on both corn and beans. The deferred months are sloppy as well. The rally today is purely fund buying once again. The market seems to be telling us the democrats have already won. We continue to be range bound on both corn and beans. Be selling the top end of the range.
This could potentially be a volatile week in the grains. We have the election tomorrow and then the USDA report on Wednesday. Both could have a large impact on the grains. Weather continues to look good ahead to get harvest wrapped up, so that is also causing some pressure as space gets tight everywhere. Harvest progress will be updated this afternoon. Corn estimated at 81-83% and beans estimated at 91-93%. The USDA had a couple flash sales announced this morning. 172,000 mt of corn sold to Unknown and 132,000 mt of beans to China. Export inspections were solid again for beans at 96 million bushel. Year to date exports on beans are at 597 vs 517 last year. Export inspections on corn were near 35 million bushels. Year to date exports are at 399 vs 218 last year. These export numbers continue to sound huge, but remember that we are right on pace with the USDA expectations. We need the business to put a dent in this monster supply. The dollar was sharply higher today up about 3/4 of a point at 97.74. Let’s see what tomorrow brings with the election. Get your votes in.
The beat continues downward in the grain market. Both corn and beans were under pressure right from the get go after a slightly higher open. FC Stone was out with their new guesses on yields. The came up corn at 175.3 bpa vs their previous guess of 175.2. USDA is currently at 173.4 bpa. There is still some thinking the USDA could potentially drop from their corn yield on November 9th. FC Stone's bean yield is 52.8 bpa vs their previous guess at 52.5. USDA is currently at 51.4 bpa. Expectations on Nov 9th are about 52.0 bpa, but I wouldn't be surprised to see higher than that. Even with the board down strong the last two days basis has not improved much. The supply is large and the world has plenty of beans to deal with. A South American issue is needed to have any hopes to getting to new highs. USDA announced another 132,000 tons to China this morning, but that is just routine business. Informa will be out tomorrow morning with their updated guesses. Export sales will also be out in the morning. Weather continues to look great to finish US harvest. South American weather is basically normal as well at the moment.
Yesterday we had huge export inspections on beans, to the market says we should have known that already. Like I mentioned yesterday we are right on pace with the USDA exports expectations. Today the market decided supply was still getting bigger on thought that USDA will raise the yield on November 9th. There were more rumors around about Brazil exporting more beans to China for Dec and Jan, which again is taking business away from the U.S. Weather looks good for to finish up US harvest in the next 2 weeks as the forecast is warm and dry. Harvest progress was released last night with corn at 75% harvested and beans at 87% harvested. Informa will be out on Thursday with their estimates on updated yields and production. Jan futures should have support around the 9.80 area. Dec corn support is at 3.43. I would expect those areas to be tested before November 9th.
Weekly export inspections this morning were huge once again for beans. This weeks number was 105 million bushel, out doing last weeks 100 million inspection. Even though these numbers sound very high, we need every bit of them to stay at USDA's export pace. Right now we are still right on schedule to meet their demand and we still need more to make up for a big yield. Corn inspections were at 31 million, which was right in line with expectations. We also had another bean sales announced to China this morning, along with a sorghum sale to unknown, and a corn sale to Barbados. Harvest progress will be out this afternoon and expectations are at 75% done on corn and 85% done with beans. Funds continue to buy soybeans on big export business and a fear of South American weather becoming an issue. Does that remind you of anything?....A fear of bad weather…..Just like the US had a fear of in May and June. Never happened! The forecast in SA looks favorable for the next 2 weeks. Brazil soybean planting pace is ahead of schedule. That doesn't sound like a problem to me….yet. For the month corn futures were up 18 cents and bean futures were up 48 cents. Not bad for big month of harvesting.
Beans managed to test the 10.20 Nov resistance today and once it did we backed off about a nickel. Export sales were out this morning and everything was about as expected. Meal was actually a little light of expectations, but guess what led the market higher today….Meal! Meal was up over 8 bucks on the day. Can we break through 10.20 Nov? I have my doubts. USDA had a couple flash sales this morning with 396,000 tons of beans to China, 129,000 beans to Unknown, and 204,000 ton of sorghum to China. The sorghum seems a bit odd. We are nearing month end so we could be in line for some profit taking. Beans are now 77 cents off their lows on October 13th. These levels warrant some sales. Basis continues to be weak as the nearby markets are swimming in both corn and beans. US weather looks warm with normal precip to finish out harvest. South American weather might be more important at the moment and so far it is considered normal. The only concern is too much moisture over 20% of Argentina. Like I mentioned yesterday if we don't see a problem in SA it is time to make some sales for new crop 17 as well.
Beans led the way higher today as we broke into new highs at levels we have not seen since August. 10.20 Nov futures is the target for the time being and that level should hold as stiff resistance. That is only a dime away after today’s rally. Have some orders working just under that level and take advantage of this rally. I heard some more rumors today of 2 more cargos of Brazil beans being sold to China for January 2017. This is not going to help US demand. Basis levels continue to be weak as harvest pressure continues and storage gets tight. I think it is worth noting again that we also need to be looking at new crop sales for both corn and beans. Dec 17 futures near 4.00 and Nov 17 futures are over 10.00. This could be an opportunity. Without a problem arising in South America it is hard to be real bullish and today they are looking ok.
The USDA announced a sale this morning of 516,000 mt of soybeans sold to China. That is the 17th largest flash sale. That is the good news. The bad news is that China is still looking at Brazil beans as well. Brazil sold them 4 cargos for Nov-Dec shipment, which will cut into US demand in the peak of our bean export season. Once the sale was announced at 8:00 am it seemed to spark some interest in the futures and we got within 2 cents of yesterday's highs. By 9:30 am though beans were down 7-8 cents before battling back to near unchanged for the day. The upside on beans at the moment is about 30 cents from here, but today there is just nothing to push us to that point. We will need to wait and see how the weather shapes up for SA. Corn was a non-event today trading about a nickel range. Not much new there as heavy harvest pressure continues. Basis continues to be weak on the front end and that is going to continue into November.
Overnight markets had beans up strong due to higher world vegoil prices and strong demand. Export inspections this morning once again had a huge bean volume of a cool 100 million bushels. That is not a record amount, but it should make the top 10. Beans traded right up against 10.00 Nov futures, but couldn't break that level and broke lower. This is a good opportunity to sell more beans. The bean yield should continue to get bigger on the next report. Corn exports were not near as good at only 21 million bushel. Corn harvest had a big weekend and that added some pressure. The 2 week forecast looks good as well with normal to above normal temps and normal rains. The USDA was out with the harvest progress report this afternoon and came up with corn at 61% harvested and beans are at 76% harvested. Nothing much to worry about there.
Export sales were huge today for both corn and beans. Corn exports came in at 1.02 mmt vs estimates of 700 - 1.000 MT. Bean exports were 2.01 mmt vs estimates of 1.000 - 1.300 MT. We had another sale announcement on beans to Unknown of 192,000 tons on the wire this morning as well. Once again the market tried to rally on the news, but couldn't make it last very long. Buy the rumor, sell the fact. That has been the case with export sales just about every week lately. We know we have good exports, but we also need that to continue to offset record yields. We continue to be stuck in a range just bouncing back and forth. 3.48 Dec futures and 9.70 Nov futures should be support. Beans did tick a new high by 2 cents, but it only last a few minutes before we started retracing. A private advisor was out today saying to put sales on around 3.72 March corn futures and 9.94 Nov futures. He is also recommending new crop sales around 3.98 Dec 17 and 9.93 Nov 17. Those levels are not that far way.
Overnight markets were very quiet, but beans caught a bid instantly this morning after another sale was announced to Unknown. We are only a penny from our recent high on corn and a nickel on beans. The initial corn target is still 3.65 Dec futures. Bean resistance is at 9.82 and that is exactly where we close today. This is a selling opportunity to lighten the load on a big yielding crop. Export sales will be out in the morning and the thought is that they are going to be huge. Buying volume in the final minute of trade was very heavy, so we will have to see if we can break out of this range tomorrow. The price later deadline for last year’s bushels is tomorrow. If the bushels are not priced tomorrow they will be priced on Friday at 8:30 am on the open. Please be aware of that. Crude oil has hit a 15 month high today over 51 bucks. Basis continues to be sloppy and today there is rumor that SA has some beans available for export before December. That is not good news for U.S. business.
The USDA announced a sale to China this morning of 706,000t of beans for the 16-17 marketing year. That is one of the largest sales we have seen in a while. Funds initially continued to buy this morning as we made a new high in beans for the move at 9.87 Nov futures. At about noon everything started to collapse. The gulf bean market crashed today, so the demand is also telling us this rally is about money and nothing more. Harvest progress last night was pegged at 46% on corn and 62 % on beans. Both are slightly under average, but for the most part there are no issues. Weather remains good for the next 2 weeks for more progress. Nothing has really changed in the last week to get this rally. I think we continue to be range bound for a while and we are getting closer to the top end of the range. Corn could potentially have another 10-15 cents to rally and beans another 20 cents, but we need to consider making sales. Yields are still impressive and upside should be limited. Be paying attention to the 2017 futures as well. Dec 17 near 4.00 and Nov 17 near 9.90 could be a good place to start.
Export inspections were way over expectations on beans and that seemed to spark some more buying interest. We traded to new high levels for the move and managed to close right at the high. Like I mentioned on Friday this rally seems to be strictly fund money drivin, so be careful. There is nothing out here today that says we need to rally any further. There were no sales announced at 8:00 am this morning. Funds are known to buy in 3 day increments, so we will have to see if that holds true tomorrow on turn around Tuesday. The good news is that the funds bought beans right into close and managed to close them right nears the highs. Harvest progress will be out tonight and the guess has corn at 49% and beans at 62%. The 2 week forecast continues to look good for more progress. For those of you with price later bushels for old crop, the deadline is this Thursday. This could be a great opportunity to get more beans sold. Basis and spreads are not showing any signs that we need to keep moving higher.
Today was a wild day in the markets and it was also a point where farmers became slightly more interested. Corn traded up as much as 9 cents just under the 100 day moving average at 3.60. The technicals are lining up to be friendly, but this is strictly a money move so be careful. 3.60 Dec is the first target on tap, then 3.65, and the top end could pencil in at 3.74. I personally don't think we get that high, but the funds will decide that. If we get anywhere near that I strongly suggest sales. Start paying attention to Dec 17 Futures as they approach 4.00. That could be a good HTA sale if the carryout stays over 2 billion. Once again basis is sloppy as we rally for basically no good reason. Sales picked up heavily today, so the funds took on a good amount of hedge pressure on as well. Export sales were on the low end of the guesses for corn today, but beans were very strong once again. Next week could be interesting to see whether this market wants to test those levels. Harvest progress will be great this weekend, so that could add some pressure early next week. Have a good weekend!
No export numbers today as that is delayed to tomorrow since we had a government holiday on Monday. The day started out pretty quiet before wheat picked up a bid and corn decided it wanted to follow. Beans traded lower the entire morning hours. At about 10:45 corn caught some more money flow and before you know it we were up a dime erasing all of the losses from yesterday's report. Why? Nobody has answer…. So here we are sitting just below 3.50 Dec futures. We have been stuck in a range from 3.25 - 3.50 for the past couple months. Can we break out? Unless we get a reason for what happened today I have my doubts. For those of you with Price Later bushels that need to be priced by the end of next week, now might be as good of a time as any to pitch the rest. Basis continues to slide and I don't think that will change anytime soon. The deferred months are just as weak as the nearby on the PNW. Hopefully business picks up in Jan-Mar, but for now we are stuck.
Report day is in the books and without too many surprises. Corn yield was pegged at 173.4 bpa (average guess 173.3). Corn carryout for 16/17 was put at 2.320 billion vs the average guess of 2.373. World carryout for corn at 216.8 million tonnes vs an average guess of 219.0. Everything was pretty much in line for corn. Bean yield came in at 51.4 bpa (average guess 51.5). Bean carryout for 16/17 at 395 million vs a guess of 414. The gain in production was partially offset by an exports increase. The big number here that was bearish is the world bean ending stocks. The USDA came in at 77.4 million tonnes vs a guess of 73.3. That number is what caused the stir in this report. Initially when the report came out beans and corn traded it positive. Beans traded up 17 cents shortly after the report broke. By 11:30 we were back in red figures. Harvest progress was out last night and we were slightly behind expectations. Corn is at 35% harvested and beans are 44%. It looks like we should have another good week of progress ahead.
Corn and bean export inspections were great once again, but the market didn't seem to care once again. Basis got pounded yesterday afternoon on corn and now the PNW is starting to worry about being competitive. It was not just the nearby bids either, as they spread all the way out to the deferred months. That is not a good sign going forward as previously the PNW was going to be on fire this year. Things change in a flash! Tomorrow is report day, so that will determine our direction for a while. The new estimates for the report have corn at 173.3 bpa down from 174.4 on the previous report. It might be too early into harvest to change the yield that much on corn. The estimate on beans is at 51.5 vs the previous guess at 50.6 bpa. I am not convinced that 51.5 is even big enough as the bean yields have been huge. Farmer selling has been slow, but steady on the beans. If we get any upside ahead of the report tomorrow I would think about selling a few. Harvest progress will be out tonight at 3:00. Indications have corn about 42% and beans about 52%. The next 2 week forecast looks favorable for more progress.
Today was a very quiet day in the grain markets. There is no update on harvest progress until tomorrow as today is a holiday for the Feds. Everyone else has to work. We have a chance of rain tomorrow and then it looks ok again to have a chance at getting done with beans locally. Basis continues to weaken on corn, but beans have started to level off. Storage space is becoming an issue everywhere. Hearing of places going cash only and that could be a strong possibility locally as well real soon. The USDA report is on Wednesday and it is tough to see how it could line up too friendly….Time will tell.
Export sales were huge this morning for both corn and beans, but the market didn't seem to care. Corn took the biggest hit on the chin down 7 cents. Beans traded down as much as a dime, but managed to battle its way back to up a penny. Everything was basically the same story just a different day. Basis continues to weaken on both corn and beans. The two week weather forecast is going to allow decent farm activity throughout the corn belt. Space for beans is becoming an issue everywhere and that is also starting to show in basis levels as well. Everyone is waiting for the report on the 12th. Expectations so far are bigger beans yields and smaller corn yields. One thing to consider….Over the last 20 years the corn yield from Sept-Oct has only dropped 5 times. Is it too early to start dropping the yield when we are only 30 percent harvested?
Fear of a higher US 2016 supply is putting pressure on the bean complex. Informa was out today and pegged the national bean yield at 51.6 bpa. They raised the yield in ND, SD, and MN. I wouldn't be surprised to see something over 52.0 on the USDA report next Wednesday. Informa pegged the corn yield at 174.5 bpa. They raised the yields in MO, ND, SD, and CO, but they were offset by lower yields in IN, OH, and AR. Basis continues to be the weak link on the nearby markets, but that should improve once harvest is done. Once this crop gets put in the bin it is going to be tough to pry it back out. Spreads could be influenced by that pace of farmer movement after harvest. Right now the carry from Dec-Mar is just under a dime. If the farmer decides not to sell anything that spread could potentially be at a nickel. The rain in the Midwest last night is going to put a delay on things for a bit, but the next 2 weeks look to dry out. Please consider your soybean moistures once we start back harvesting.
We had a small corn sale announced this morning to Unknown. News was quiet otherwise. Harvest progress last night had beans at 26% harvested and corn at 24% harvested, which was right at expectations. No surprises there to trade today. Estimates on the national bean yield are up to 51.3 vs the USDA at 50.6. I am not sure if that is even high enough. Estimates on the corn are around 172.5 vs the USDA at 174.4. The USDA will update their numbers on the 12th of October. Corn is still looking strong fundamentally as 3.60 Dec futures would be our next target. If we get that high it will spark some selling for old price later bushels and new crop as well. Beans feel like they are stuck in this range and are going to have a hard time working higher with harvest activity. Basis continues to slide on both corn and beans again today. It is getting ugly and it could get worse as space gets tight. Hopefully we can avoid the big rains predicted for tonight, so harvest can keep on track.
Corn and bean export inspections were strong this morning and allowed the grains to pop higher and follow thru on Fridays gains. Early weakness failed to uncover any fresh selling and we managed to reverse the market on short covering / tech buying. Dec corn managed to close above the 50 day moving average and Nov beans are testing it as well. Resistance on corn was at 3.44 and we managed to close above it, so that could spark some more buying interest. This was the first day in a week that we didn't have any morning sales announced, but remember that China is on Holiday. We will have an update on harvest progress at 3:00 today as it should have been a productive week. Yields are still eye popping on the beans and it is getting hard for me to see how we are only at 50 bpa national average. Basis continues to widen out as space becomes an issue everywhere and the PNW gets to capacity for October.
The USDA report was basically a non-event today as the numbers came right in line with the expectations. Sept 1 corn stocks were 1.738 billion bushels and the guess was 1.754. Bean stocks came in at 197 million bushel and the guess was 201. The market initially reacted a couple cents weaker, but then turned higher. Corn finished up 7 on the day and opens the door for a little bit more strength. 3.40 - 3.50 Dec futures would be the next target. I have my doubts on this though. My explanation for today's bounce would be month end squaring. Funds are short a lot of corn and they could have just took some profits. We will have to see if we can hold the gains next week. The next report on the 12th with an update on production will be much more entertaining. Bean harvest is going to have a huge weekend as the weather allows nearly everyone to roll. Have a good weekend.
Another USDA announcement of beans sold to China this morning. They are on holiday next week, so this week has been busy. It is month end tomorrow, so we might see some funds lifting positions ahead of the report. The report will be the key at 11:00 AM. Most experts are leaning towards a slightly bearish report. Yields remain very large on beans and it looks like the USDA might need to raise production even more. Harvest progress picks up daily across the corn belt as we continue to dry out. More rain though is still in the forecast for next week, so the window is fairly short in the western belt. The east should have a little more time to go. Basis was slightly weaker again today, but should be starting to steady out for now. Hurry up and wait for tomorrow's report and once that is out of the way the next report is only a couple weeks away. That report could be more important at the moment to see how much they raise production.
More sales were announced this morning on the wire. Beans to unknown and also beans to China. There was also a very large sale of corn to Mexico for both this year and next year. Basis continues to weaken on beans as harvest ramps up and October sales are about at capacity on the PNW. The country is still seeing the farmer sell beans at these levels. The USDA stocks report is on Friday, but a lot of traders seem to be writing it off already. They think the USDA report on Oct. 12th will be more important. I guess we will find out in time. After yesterday’s nice bounce and technical turn around we just wiped out those gains today. I would guess we trade a small range for now until we get to the report. We have export sales tomorrow morning and that should be about it for news until 11:00 AM on Friday.
Beans made a new low this morning after breaking through the previous low of 9.37 Nov futures. The good news is that it didn't last long. We managed to finish the day up 7 cents and 15 cents off that level, so we managed to escape the first attempt of breaking out lower. The next target lower was pointing towards 9.20 Nov futures. Yields still remain large on the beans and the weather has dried out allowing harvest to have a catch up week. Harvest progress last night had corn at 15% vs 19% average and beans at 10% vs 13% average. We had another USDA sale announced to China this morning, but those could come to a halt next week as they go on holiday. Crush margins are also very favorable. The report on Friday is near, which will likely decide if we want to make new lows or not, but we should be safe for now after today's bounce. South America is on tap for some precip, which could have been part of today’s early weakness. There are still a fair amount of beans moving off the combine and I would expect that to continue. Please keep in mind to set your combines correctly on soybeans. Excessive pods become a huge issue once we put them into the bin.
Harvest Pressure continues as this week's weather looks like we could make some progress. The 8-14 day forecast is back to looking very wet at the moment for the western belt. We had another bean sales announced this morning to Unknown. Export inspections were solid for corn, but poor for beans. It was the lowest number on beans we have seen in a while. Yields continue to be impressive on beans. Corn Yields remain variable and so far it doesn't look to be record setting. Harvest progress will be out this afternoon with estimates at 15% for corn and 12% for beans. Basis levels continue to erode as harvest picks up steam. Barge freight is having some issues with high water levels. The next USDA report is Friday at 11:00 am. Early predictions have old crop stocks going up on beans, which has been the case 3 out of the least 4 years. The current corn yield might be a bit overstated, but there is a lot of harvest left to go.
Harvest pressure continues in the bean market as progress continues where it can. More moisture hits this weekend, so delays will continue elsewhere. Next week has hints of warming up and drying out in the corn belt. Some privates put bean harvest progress at approx 9 percent. The biggest news on the day had to do with DDG exports to China. China has enforced import duties against US DDG's. China is the US's largest importer of DDG's, so this could have a major impact on ethanol margins. Reminder that the next USDA report is Sept 30th. News is quiet today, so lets what weather has in store for us next week.
Export sales were no help today as they were pretty much as expected. Two more bean sales were announced this morning to China and Unknown. Heavy rains are slowing harvest progress as S. MN, Wisc, and N Iowa have a big sloppy mess. The wet weather looks to stick around through the weekend and then hopefully dries out. The Fed's decided not to change interest rates, which in turn leads to a weaker dollar. Today was very quiet as the market just basically sat still and had a very small range. We are now waiting for the Sept 30th stocks report as the next market mover. Yields remain impressive all over the corn belt. There are a number of beans being sold off the combine, so I would expect any rally before Sept. 30th to be very minimal.
More USDA bean sales were announced this morning to 3 different countries. Turn around Tuesday was in play today and we lost all of yesterday's gain. We had a nice 49 cent rally since last Wednesday. Beans yield continue to be eye popping as 70-80 bushels is starting to be coming in the east. So far the farmer seems willing to sell beans off the combine. I think that trend continues and if the yields continue to impress we will see new lows beans in the near future. Basis dropped hard today in Mankato as they are telling us they have coverage. Rains continue to delay harvest in the Midwest and that looks to continue for a couple days yet. Early corn yields seems to be a quite a bit more variable, but are not near as impressive as the beans so far.
USDA announced a small sale of beans to China this morning. We need more of that! The market is currently worried about wetness and harvest delays. I am not in that camp as of yet, because there just isn't very man beans that are ready to go. My trip to Illinois last week verified that as well. There are a lot of beans that are still a week or two from being harvested. Basis on the PNW continues to be weak for corn and beans, but should improve quickly once harvest is complete. We still need to see the business show up as the USDA says it should. Beans yields are eye popping so far as harvest gets going. The new harvest policy is out and you can see the entire copy on our website. Everything is basically the same except for the storage charges. Corn charges will be 4 cents per month with no minimum. Beans charges will be a flat 20 cent fee, which will be good for the entire year. The deadline for pricing will be October 19th for price later bushels.
Have a safe harvest!
Selling excels after yesterday's USDA report as traders start to paint a more bearish scenario. If the USDA estimates come true it would leave a corn carryout at 2.384 billion bushels, which leave a carryout to use ratio of 16.5%. That is the highest ratio we have seen since 2005 when the average farm price for corn was $2.00 according to Kansas State University. That right there paints a very ugly picture to me, so we better hope export sales are at record highs as predicted. I think we will make a new low here yet in September, but I think we bounce back in October when we start seeing some yields. Beans are painting the same type of picture today now that the USDA posted a yield over 50 bpa. The first level of support on Nov beans is 9.39, and the next would be the psychological level of 9.00 futures. Demand remains very strong for beans, so I wouldn't think we could go much lower than that. Crop ratings last night were unchanged once again. Reminder: The GPC annual meeting will be Thursday Sept. 15th at the Murdock Elementary School. A meal will be served from 5-7 pm and the meeting will follow.
USDA report had no real surprises as the yields stay high as little has changed since last month. USDA pegged the corn yield at 174.4 bpa down slightly from their August publication. That puts a total US corn production at 15.093 billion. That is a pretty healthy supply, so export business needs to keep pace. They USDA pegged carryout at 2.384 billion bushel. On the bean side, they guessed yield at 50.6 bpa. That is up a bit from the previous guess of 48.9. Total production of US beans at 4.201 million bushel. US carryout pegged at 365 million, up 35 million from their August estimate. Beans took the biggest hit today as they were trading up about 9 cents prior to the report and finished down 16 cents. Corn was fairly quiet all day trading a 8 cent range on the report. The report didn't give the bulls what they wanted, so now we wait from early yields.
Basis continues to weaken as harvest nears and we are starring at a big crop. Export sales were solid today for both corn and beans. We are about 3 cents away from resistance on both corn and beans, but if we can break through that Monday after the report we have a chance to break out even higher. For the week corn was up 13 and beans are up 28 cents. Mondays USDA will be the next trigger. As you may have noticed we have changed websites and are in the middle of setting up a mobile app. You can download the app by going to our mobile website glacialplains.com and simply clicking on the black app icon that pertains to your style of phone. All the information might not 100 % accurate as we make the switch so please call with questions. With this new website we also have text message capabilities, so if you had the markets texted to you previously you will see changes. If you do not want market updates please call and let us know and we will make the changes. Have a good weekend!