Wednesday, September 18, 2013

Opening Grain Market Comments 9-18-13

Markets are called mixed this a.m.

In the overnight session we had corn unchanged, KC wheat up a penny, MPLS wheat up a penny, CBOT wheat up a penny, and soybeans off 6 cents a bushel.  At 8:10 outside markets have crude up about 50 cents a barrel, gold down 8 bucks, and the DOW futures pointing towards about an unchanged start.

Markets started rather firm yesterday off of the FSA data; but didn’t manage to hold the gains as we simply lack a bullish headline that interests the funds for corn and wheat.  While we have failed to continue to feed the bull for soybeans; fundamentally many think that soybeans still have a bullish story; but the latest headlines have been slightly better than expected early yields, moisture in areas that still have green beans, and simple technical selling.  We also need to consider the world soybean story; which has a big carryout and even close to a record stocks to usage; those headlines are a little early because we are no place close to having a South America bean crop and should have plenty of weather scares as we move forward.

Sounds like both China and unknown reported more US soybean purchases this a.m.  I read something that indicated the sale of the beans to China was the 5th largest ever.  Will it be enough to help push our markets back up?

We will have the grain stocks report on September 30th.  That is the next “big” USDA report.  Personally I feel we have a little risk that soybeans come in higher then estimates just because of the fact that as tight as things are suppose to be and with a late harvest it hasn’t felt like we have had cash basis on fire.  With a late harvest and no early beans to speak of and one of the tightest carryout numbers of all time one would think that basis would be very firm; but that hasn’t been the case; so I do feel we could have a bearish surprise on the soybean stocks.

We will have ethanol numbers out later today and exports out in the a.m.  Watch both of those for more fundamental price direction.

Overall the big thing that the grain markets need is a bull story.  Everyone loves a bull story; the funds in particular.  I just don’t know when or if that bull story will show up but until it does it feels like the funds simple don’t care to own our grains.  Hopefully they don’t decide to get even shorter.

Locally we have started to see a little corn getting harvested.  Not much and most of it is wet; but we are getting very close.  As for marketing it still feels like there is a little better nearby basis then for a month and a half from now.  The trick for us is going to be if we can get rail cars in to capture that premium; while making the various specs.  As example some ethanol plants and other end users will take corn up to 17-18 moisture; others need to be 14.5-15.0. 

Bottom line if you think you will have some corn in the next week or two make sure to check with us as we might be able to do something to get some sort of premium and potentially even waive some or part of the drying costs.


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