Wednesday, April 16, 2014

Grain Market Comments 4-16-14

Grain markets are called mixed this morning after a mixed overnight session that when ended saw corn unchanged on old crop while new crop corn was off a penny, KC wheat was up a penny, MPLS wheat was up a penny, CBOT wheat was up 3, old crop beans were up 17, and new crop beans were up 8 cents a bushel.  At 8:00 outside markets have a US Dollar about unchanged, crude is up about 95 cents a barrel, gold is up 4 bucks an ounce, and the DOW mini futures are pointing towards a positive start of about 70 points on the DOW.

Yesterday we had a couple headlines that gave the grains some strength.  First off was the NOPA crush which above estimates and brought back up the headline that we need to ration demand; which we really haven’t.

This is from CHS Hedging in regard to the crush numbers 
“The March crush reported by NOPA members was 153.8 mb, well ahead of the average estimate of 146.1. Looking at the year on year comparison, crush for the first seven months of the soybean marketing year is up 2.1%. We estimate the NOPA crush will need to be a cumulative -4.8% year/year over the remaining 5 months of the year to hit the WASDE-based estimate of 1,685 mb. Oil stocks were up 129.6 million pounds to 2.022 billion.”

Bottom line is that demand for beans has been very strong.  We do need to keep in mind that it was just last week when the headline was China defaulting on beans that had hit their ports.  The bean market should remain volatile; strong up moves on days when focus is on our very tight situation but if we see a headline that indicates demand has slipped or that end users have found a replacement then we have a lot of downside risk.  The fund position also gives us some risk as they own plenty of beans; if the charts turn because of some catalyst it could really open up down side; but until then enjoy the ride.

The other big headline I seen yesterday was the escalated violence in Russia/Ukraine.  Most thought this lead to the wheat strength.  So far we have yet to see any more actual business come this way because of the situation over there.  So I would consider this a fear rally; just a few days ago new business went to the Black Sea area. 

The birdseed market has firmed a little bit and we also have buyers looking for Hi Oleic sunflowers.  Both old and new crop so make sure to call us if you have any offers.

No real changes to the rail situation.  It is still a struggle and helps keep our markets a little extra volatile. 

I did see this come across from Thune’s Office. 


Contact: Andi Fouberg (202) 228-5381
April 15, 2014
Rachel Millard (202) 228-5939

Thune Commends STB on Fertilizer Decision

WASHINGTON, D.C.—U.S. Senator John Thune (R-S.D.), Ranking Member of the Senate Committee on Commerce, Science, and Transportation, issued the following statement after the Surface Transportation Board (STB) announced tonight that it will direct the Canadian Pacific Railway Company and BNSF Railway Company to report by April 18, 2014, their plans to ensure delivery of fertilizer shipments for spring planting and provide weekly status reports beginning April 25, 2014, regarding the delivery of fertilizer on their respective networks:

“This is a step in the right direction for the STB and I am pleased that they acted so quickly after last week’s hearing to address some of the ongoing rail service issues in South Dakota and the surrounding region,” said Thune. “I will continue to press the STB and the railroads to do all they can to improve service across South Dakota during this critical time of year for our farmers. Continued rail service disruptions are not only having a direct impact on agriculture producers, grain handlers, and the ethanol industry, but also on manufacturers and main street businesses across our state.”

Last week, Thune addressed the STB at their public hearing on U.S. Rail Service Issues. The Senate Commerce, Science, and Transportation Committee has jurisdiction over freight railroads and the STB. Thune is also a member of the Senate Agriculture Committee.

Here is CHS Hedging Weather link for today.
And here is more market info from CHS Hedging Morning Highlights

Morning Highlights

By Chris Steinhoff

  • Ukraine military forces clash with pro-Russia militia in eastern Ukraine.
  • As of 6:45am CDT: Gold is up $4.00, crude oil is up 90 cents, US$ index is 0.080 weaker.  Dow futures are up 65 points and Nikkei is up 3.01%.
  • Friday, April 18th is an exchange holiday with grain and energy markets closed. CHS Hedging will be closed as well.
  • Subdued overnight trading with very little fresh news.
  • France’s parliament adopts a law prohibiting the cultivation on any GMO maize.
  • South Africa imports YC from Russia for the first time since 2003. They also bought some from Ukraine in March.
  • CK/CN is quietly firm at a 5 ¾ carry.
  • Following record production, exports from Russia and Ukraine become more important. Political tensions may impact world corn trade. .
  • The NWS 6 to 10 day forecast has mainly above normal temps across the center US with IA, ILL, IN, OH, WI and NE forecast to see normal precipitation.
  • Weekly ethanol production will be released this morning. 
Outlook: trading 1 to 2 lower….weather forecasts look pretty good
  • After opening on session lows, buying continued in overnight trade as SMK and SK blast to a new contract high.
  • The US crush pace runs well ahead of the needed pace to reach the current USDA annual estimate of 1.685bb. A nearly unprecedented slowdown will need to be seen in the next 5 months to resolve the US balance sheet.
  • The SK/SN is slightly weaker at a 12 ½ inverse. SK/SX is 11 firmer at a 283 ¼ inverse
  • WCB crushers have ample truck supplies of soybeans moving toward them while rail from the WCB heads east.
  • News from China is quiet and Dalian beans were slightly better in overnight trading.
  • Malaysian palm oil is up 37 ringgits.
Outlook: trading sharply better
  • Ukraine/Russia political tension has traders worried about executing exports.
  • Damage from Sunday and Monday night freezing temperatures is still being assessed.
  • India’s official government procurement of the new crop is expected to begin soon as they buy for domestic reserves and food programs.
  • China’s National Bureau of Statistics says wheat seeding will decline 0.56%, mainly in favor of corn and rice.
Outlook: trading steady to slightly better

Grain Merchandiser
Midwest Cooperatives
605-295-3100 (cell)
605-258-2166 (fax)

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