Information about grain markets and info to help producers to market crops. See how various grain marketing strategies can effect ones average price. We will be posting various potential trade and option strategies along with marketing decisions made on our mock farms.
Tuesday, January 29, 2013
Afternoon Recap from CHS Hedging's Tregg Cronin 1-29-2013
Outside Markets as of 1:20: Dollar Index down 0.177 at
79.571; NYMEX-WTI up $1.03 at $97.48; Brent Crude up $0.76 at $114.24; Heating
Oil up $0.0383 at $3.0999; Livestock markets are weaker led by feeders; Softs
are mixed with Sugar down 2.03%; Gold up $9.10 at $1662.10; Copper up $0.0280
at $3.6900; Silver up $0.585 at $31.370; S&P’s up 5.00 at 1502.00, Dow
futures up 57.00 at 13,890.00 and Treasuries are being offered.
Limited time to get a write up together again today due to
meetings this afternoon. Main themes today were definitely South American
weather maps as the overnight run was drier, but midday maps wanted to put more
moisture into the equation for the 10-15 day. If there is any unity to
these models, it seems that the nearby forecast continues to have amounts
reduced as it draws closer, and the promise of better moisture is always in the
extended maps. By the time that extended map becomes the nearby forecast,
moisture is taken out for Argentina and S-Brazil. Sounds an awful lot
like the US in July. No extreme heat is seen in either location, although
Argentina is going on its 6th week of dryness. This seemed to
be behind the soy complex strength, along with the building vessel lineups in
Brazil. When the 3.0MMT soybean lineup is combined with corn and meal, it
totals close to 7.5MMT which would be a record for this date.
Egypt continues to make headlines, but mainly for the
wrong reasons. The Egyptian defense chief warned that political unrest
could bring about the “collapse” of the state after a week of street battles
which has left dozens of Egyptians dead. The effect on the wheat market
is such that it may make it more difficult for the world’s largest importer to
secure financing and acquire stem. On top of that, recent comments
suggest Egypt has enough stocks to get to June which is when they harvest new crop.
Highly unlikely considering the last time they bought wheat was for LP-Feb.
The oil cleanup from two barges hitting a railroad bridge
near Vicksburg, MS continued today and in the process backed up almost 800
barges on either side. Traffic has basically been halted, and this is
probably seen supporting up front bean barges. Caution thinking it’s
nearby demand, as the PNW continues to soften today on bean shuttles with most
bids +145H at best. If one offered a train, that bid might not be
there. Call those bids down 10-15c w/w.
Another big headline today was White Energy, Inc, an ethanol
producer in Plainview, TX is planning to idle operations due to high corn
prices. The Plainview plant was said to have name plate capacity of 120
million gallons a year, and their Hereford TX plant which has capacity of 45
million gallons, is also said to be running at reduced capacity. This
plant follows a long list of closures which will keep ethanol production on a
weekly basis under pressure and at risk of not meeting the 4.500 billion bushel
corn grind forecast. Spot margins were said to be improving with some of
the recent plant closures, but 2013 RIN values were said to be changing
hands between 31c and 33c this afternoon which wouldn’t suggest production is
ready to roar back open again. Means plants would rather buy a RIN at
31c/gallon than produce the actual gallon of ethanol. Tomorrow’s weekly
ethanol production figure should be interesting.
State wheat conditions from KS/NE/OK/SD were well reported this
morning and during the day session so won’t rehash them. They’re
poor. We knew that at the end of December, and they haven’t
improved. Still hard to trade the current conditions or possible drought
on January 29th.
Crush plant basis for soybeans looks firmer in the WCB going
home today, but CIF bids admittedly losing steam along with their PNW
counter-parts. CIF corn bids were unchanged with spot Illinois River
basis at 2.3c under gross delivery equivalence, February is at DVE and March is
3.4c above DVE. Probably part of the reason the CH/CK traded an inverse
most of yesterday. The Rogers Roll, or pre-GSCI roll, looks like it got
underway late today with overt pressure witnessed in the CH/CK and SH/SK.
SH/SK took it in the throat today, down 2.25c to +12.00c. SN/SX was up
4.0c to +116.75c.