Friday, May 30, 2014

Grain Market Comments 5-20-14

Grain markets are mixed this morning after a choppy mixed overnight session that saw corn unchanged to up 2 cents, KC wheat off 2 cents, MPLS wheat off 2-3, CBOT wheat off 2, and beans up ½ to down 1 ½.  At 8:00 outside markets have crude down about 60 cents, gold off 3 bucks an ounce, DOW mini futures pointing towards a slightly softer open, and the US Dollar near unchanged.

It has been a little bit of a broken record lately; ideal weather for the majority of the corn belt; with most of the crop in the ground the focus or headline has been rain makes grain.  Corn and wheat have took most of the pressure; while beans still have a very tight old crop situation that maybe hasn’t been resolved. 

The positive thing for our markets in general has been solid demand.  Yesterday ethanol numbers where supportive and came in above what we need to hit USDA estimates.  We have also seen corn basis firmer, corn spreads firmer; both of which should eventually lead to a bounce in the board.

The wheat situation really hasn’t changed much fundamentally over the past few weeks but prices sure have.  The crop down south hasn’t exactly turned around; yes many parts of had some rain but so far crop conditions haven’t improved; I guess we will see what happens on Mondays crop progress/condition report.  But many think the rain was a little late to help the crop much.  That rain system wasn’t really what put the pressure on the wheat market; that pressure had started long before that; it didn’t help however.  The pressure from wheat came from the world situation along a very overbought situation that had now turned into a very oversold situation.  The funds and our markets in general seem to be really good at over doing both up moves and down price moves.

Locally this weekend our railroad does change hands.  We will now be served by the RCPE railroad; which stands for Rapid City, Pierre, Eastern.  It is owned by the GWRR; we look forward to the changes and even though we might not always get the cars we want the communication should be much better.  That is very important; better communication so you our producers can make better decisions, as well as the buyers.  So welcome RCPE; we look forward to working with you.

Weather forecasts still indicate that there could be some possible issues with PP in some of the Northern States.  When I look at the forecast maps I do become friendly sunflowers; but that doesn’t mean sunflowers can go up without the help of bean oil.  I think the pressure on bean oil lately is one of the reasons the birdseed buyers haven’t shown a lot of interest.  Many are very bearish prices for corn, beans, bean oil, wheat …….etc.

So many getting so bearish grains in general could eventually lead to a bounce; hopefully bigger then what is deserved fundamentally.  But we still need a catalyst to help change charts around and lead to money flowing in.

We did have export sales out this a.m……… is the Van Trump take on those.

USDA Weekly Export Sales Data was released this morning. old-crop Corn and new-crop soybean sales were well above expectations. Below are the details:
·  Corn sales reported at 621,300 MT for 2013-14 and 90,900 MT for 2014-15.   Trade was looking for a 13/14 number between 300,000 to 500,000 and 14/15 number between 150,000 to 350,000. Last week sales were reported at 507,900 MT for 2013-14 and 62,500 MT for 2014-15.
·  Soybeans sales reported at 62,300 MT for 2013-14 and 821,100 MT for 14-15.  Trade was looking for a 13/14 number between -100,000 to +100,000 and 14/15 number between 500,000 to 700,000. Last week sales were reported at 164,400 MT for 2013-14 and 451,200 MT 2014-15.
·  Wheat sales reported at -52,400 MT for 2013-14 and 531,500 MT for 2014-15.  Trade was looking for a 13/14 number between 0 to 200,000 and 14/15 number between 200,000 and 400,000. Last week sales were reported at 142,200 MT for 2013-14 and 209,800 MT for 2014-15.

For more market information check out the below.

This is from Tregg Cronin with Halo Commodities

This below is from CHS Hedging; Morning Highlights

Morning Highlights

By Ami L Heesch

  • Grain and energy markets mostly weaker this morning.  US$ and gold are weaker, while CD$ slightly firmer.
  • Crop progress and conditions report out Monday afternoon.
  • Goldman Roll begins next Friday.
  • Updated US and world balance sheets to be released Wednesday, June 11. 
  • The Corn market traded lower overnight on mostly favorable weather conditions for the newly seeded crop. The December contract appears to dictate market direction.
  • Weekly export sales estimate: 450-850tmt.
  • Weekly crop conditions are expected to be 60-70% G/E on Monday afternoon’s report.
  • Spreads: Mostly firmer on lack of selling interest, improving cash markets and decent demand.  N/U 1 cent firmer at a 7 ¼ cent inverse, N/Z 1 ½ firmer at an 8 cent inverse, U/Z ½ cent firmer at a ¾ cent inverse and the Z/N narrowed slightly to a 21 ½ cent carry. 
Outlook:  lower trade this morning on favorable planting weather
  • The soy complex traded both sides, with the July failing to hold above $15.00 and the November contract unable to push through $12.50.  
  • Weekly export sales estimates: 400-800tmt for beans, 150-350tmt for meal and 0-35tmt for soyoil.
  • Planting progress is expected to be 75-85% complete
  • August palm oil closed down 38 at 2423 ringgit. China bean market was weaker overnight while soymeal was a bit firmer. 
Outlook: lower trade on planting progress, market awaits weekly export sales numbers  
  • The wheat market traded lower overnight on technical weakness and thoughts of a big SRW crop being harvested. Today marks the last trading day for the 2013-14 marketing year (for wheat).
  • Weekly export sales estimate: 200-600tmt.
  • Spring wheat planting progress should be 80-85% complete.  ND and MN should be 70-72% complete as well. Continued wet conditions is slowing planting in the far northern areas.
  • There has been significant basis depreciation in the KC and Mpls spot markets this week.
  • Weather conditions remain mostly good for the US and Europe but there are concerns about dryness in parts of Russia. 
Outlook: lower trade on harvest activity and ample supplies of wheat around

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

CHS Midwest Cooperatives Logo

This communication may contain privileged and/or confidential information and is intended only for the use of the individual or entity to which it is addressed.  If the reader of this message is not the intended recipient, you are hereby notified that any unauthorized dissemination, distribution, and/or use of this communication is strictly prohibited.   This communication makes no representation or warranty regarding the correctness of any information contained herein, or the appropriateness of any transaction for any person.  Nothing herein shall be construed as a recommendation to buy or sell any commodity contract.  There is a risk of loss when trading commodity futures or options.


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