Grain markets are called mixed this morning after a choppy
overnight session that saw corn unchanged to up ½ cent a bushel, KC wheat
unchanged (basis May), MPLS wheat up ¼ of a cent, CBOT wheat unchanged, and soybean
down ½ to 2 ½ cents a bushel. At 8:00
outside markets have DOW futures pointing towards a softer start of about 10
points, crude is down 1.05 a barrel with the April contract at $101.69, the US
dollar index is off 115 points with the cash index at 80.079, and gold is down
a buck an ounce at 1337.00.
Fairly quiet on the news front today. The past few days the big headlines have been
the USDA outlook conference last week; that left a major negative headline for
the funds to trade; even though it probably wasn’t realistic.
Here is just one of the stories that the conference lead to
getting printed. http://www.agrimoney.com/news/us-corn-stocks-to-soar-43percent-to-10-year-high---usda--6782.html As you can see the headline of US corn stocks to soar 43 % to a 10-year high
isn’t something to get money flow buying corn.
The reality is that what type of carryout we will have for 2014/15 is up
to many factors including acres, yield, and demand. On the yield side of things if you take the
past 4-5 years you will notice a huge swing in yields. Bottom line is yields that the USDA used
last week probably do leave us with a big carryout; but it is probably a little
early in the game to assume that we can hit that type of yield. The reality should be that yields of 160-170
or higher take our carryout very big and thus lower prices, but in my opinion
it is a coin flip if we are above or below 160; and if we happen to come in
closer to a 150 yield or less the carryout gets tight in a hurry while the
prices could bounce in a hurry as well.
The other thing that has been talked about the last few days
has been the lack of bean cancellations.
Every week we need to cancel some bean exports not to go over what the
USDA has us pegged at; yet every week we have continued to sell beans. Yesterday we had shipments in line with
estimates for all three of the grains.
Yesterday we also had March soybean contract close at its highest
level since September of 2012. Very
strong technical market; with a strong looking chart. We are overdone and we are seeing sell
signals from advisors but right now the chart looks like a run away train.
We also seen wheat and corn maybe develop some trading ranges
yesterday with the strong up tick from the lows. If we can hold the lows charts look real
positive; and would look even more positive if we take out last week’s highs.
Railroads continue to struggle and that is making basis and
cash price bids rather choppy. I do like
having offers out on basis for wheat and flat price items like sunflowers; but
whether offers get booked or not probably depends largely on the rail road and
it is kind of a catch 22. Because if we get
a lot of cars then offers probably trade high; but if we get cars and everyone
gets cars then the mills might be double bought and so may end users like
birdseed plants.
Basically nearly every mill and birdseed plant has had to
order 2-3 times (maybe more) then what they actually need. Same thing with us and rail cars; because the
railroad is so far behind it has lead to ordering more cars then perhaps are
actually needed. Because us as an
elevator or an end user such as a mill can’t afford cars not to show up. The mills and birdseed plants can’t afford to
have to shut down because they don’t have product to process. While us as an elevator don’t want to make
every producer in the world mad if we don’t have any cars. Things will eventually turn around but right
now all the hype and bad performance leads to more pressure put on the rail lines.
I have had many asked why rail performance is so bad. First off the demand for oil in ND seems to
have switched some focus from grain to oil and that has created more rail
demand for grain on other lines. Next
you have had a cold and snow filled winter.
Then you also have the fact that we have a 14 billion bushel corn crop;
versus 10-12 the past couple years; 2 billion bushels more is about 500,000 more
rail cars. So maybe South America isn’t
the only one that has outgrown their infrastructure????
I just seen this pop up on screen for morning export
announcements.
Export
Sale, Cancellation 02/25 08:11
USDA: Sale of Soybeans to China, Cancellation of SRW Wheat to Egypt
Private exporters reported to the U.S. Department of Agriculture export
sales
of soybeans for delivery to China during the 2013-14 marketing year and a
cancellation
of a soft red winter wheat sale to Egypt during the 2013-14
marketing
year.
WASHINGTON (Dow Jones) -- Private exporters reported to the U.S. Department
of
Agriculture the following sales activity:
- Export sales of 568,000 metric tons of soybeans for delivery to China
during
the 2013-14 marketing year.
- Cancellation of 110,000 metric tons of soft red winter wheat sale to Egypt
during
the 2013-14 marketing year.
The marketing year for soybeans began Sept. 1.
The marketing year for wheat began June 1.
The USDA issues both daily and weekly export sales to the public. Exporters
are
required to report to the USDA any export sales activity of 100,000 metric
tons
or more of one commodity made in one day or quantities totaling 200,000
tons
or more in any reporting period to one destination, by 3:00 p.m. Eastern
time
on the next business day. Export sales of less than these quantities must
be
reported to the USDA on a weekly basis.
Here is more market info; from CHS Hedging; their morning
highlights
Morning Highlights
By Ryan Stone
Corn
Oilseeds
Wheat
|
Grain
Merchandiser
Midwest
Cooperatives
800-658-5535
800-658-3670
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(cell)
605-258-2166
(fax)
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