Fearless Grain Marketing Plans - www.dailymarketminute.com Price Maker

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. Now helping daily market minute in empowering farmers to fight big ag and become price makers. Education to help farmers manage crop risk such as corn, soybean, and wheat prices. Using futures, options, basis contracts etc.

Friday, October 4, 2013

Opening Grain Market Comments 10-4-13

The grain markets are called mixed this a.m. behind a mixed overnight session.

In the overnight session corn closed up a penny, KC wheat was down 2 cents, MPLS wheat was up penny, CBOT wheat was unchanged, and soybeans closed off a nickel. At 8:00 outside markets have crude up 80 cents a barrel, gold down 8 bucks an ounce, the US dollar up a couple hundred ticks at 79.99 on the cash US Dollar Index, and the DOW futures are pointing towards a positive start of about 30 points.

Rather choppy markets in the overnight session and very narrow range for corn the past few sessions. As for stories there seem to be a few different ones out there for mentioning.

First off is the government shutdown and some of its effects on the grain markets. First off it has had a negative effect on the DOW as the DOW has lost over 700 points the past couple weeks. It’s a little early to say if any of that money leaving the stock market will manage to make its ways to the grain markets; but technically if the DOW were to lose another 300-400 points it could really open up more downside pressure in a hurry. If the DOW loses money in a hurry that seems to hurt all investments; and grains would probably be included in that.

Probably more important for the grain markets is the lack of information that the market is getting. Presently we are not seeing export sale announcements or weekly export information. We are not expecting to see harvest progress or crop conditions. Many are wondering if we will see a monthly USDA report; and if we do how delayed will it be. Some of my sources indicate that even if we had a resolution by today that we still would have the USDA report delayed. One other thing I have noticed is no USDA spot floor close for MPLS spring wheat. I know there are hundreds of more things that are getting effected; but the point I am trying to make is that the USDA being closed and government shutdown seems to be adding more unknowns.

Unknowns can do one of two things; they can add premium or they can scare the players away. Who wants to play a game when you don’t know the rules?

The other couple generic stories as of late have been better than expected yields for the row crops. Most seem to be in the camps that the yields are getting better. I guess only time will tell; but if yields are getting better fundamentally we will need to see some increase in demand. That might not be easy to happen in corn if the producer is a unwilling seller at the lower prices. They say that cheap prices promote demand; but that is only true if the end users can actually buy the product cheaper. I guess I am a little worried that the low price of corn won’t attract as much export demand as we might need to help our balance sheet situation simply because producers might not be big willing sellers.

If that is the case it could have some side effects on basis; meaning early in the game you could see basis strength……….but that lack of selling later on could cause us to have missed the business. That could open the door to the producer then trying to sell after we have already missed the business. Spring wheat basis did just this a few years ago; producers held on too tight at harvest and by the time they looked to sell the export card had already sailed. Bottom line is I am not super bullish basis if we have a huge carryout and see producers fail to sell it when the end users look for it. Keep in mind the type of percentage that the is feed in the first quarter of the year.

So if producers are not willing sellers during the present time period when we feed most of the corn and they fail to sell so we end up getting some export business things could get dicey if we actually have the big crop that some (most) believe.

So for marketing I am not opposed to consider min price contracts. Because the cost of a min price contract is going to be cheaper than paying the min storage fee. Plus you don’t have to worry about paying storage and getting less for the grain.

Don’t get me wrong the min price option isn’t best for everyone; but it might be a better option than paying storage at the elevator.

We will have some private reports for estimates out today; with INFORMA out at 10:30. Most are looking for an increase in corn and bean production.

We did get our Onida elevator opened up for some corn; presently we are taking up to 17 moisture; with normal discounts to apply.

Please give us a call if there is anything we can do for you.

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 5^th largest ever. Will it be enough to help push our markets back up?

We will have the grain stocks report on September 30^th. 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.

Thanks

Tuesday, September 17, 2013

Opening Grain Market Comments 9-17-13

Markets are called better this a.m. after a firmer overnight session that seemed to gain most of its strength when FSA acre numbers came out this a.m.

When the overnight session ended corn was up a dime, KC wheat was up 5, MPLS wheat was up 3, CBOT wheat was up 7, and soybeans were up 17 cents. Outside markets at 8:10 have the US dollar weaker by about a 100 ticks, crude down nearly a buck at 105.75 on the Oct contract, gold down 3 bucks, and the DOW future pointing towards a start of about unchanged.

Looks like the markets bounced a little off of some chart support plus this a.m. we got FSA data that comes off as bullish. I say “comes off” as bullish because you can read in many different places how the FSA data has never lined up perfectly to what the USDA uses. So the headline off more prevent planted acres comes off as very bullish.

Corn had prevented plantings reported at 3.57 million acres and 91.43 million acres enrolled in subsidy programs. For soybeans we had FSA prevented plantings reported at 1.69 million acres this morning and 74.66 million acres planted enrolled in subsidy programs. Now the big headline tells the funds that harvest acres need to go down. But as mentioned I am not positive that’s how it will shake out because there is a history of the FSA numbers and USDA numbers be different.

Yesterday we did have crop conditions out; not much for surprises other then the fact that we did have corn harvested reported.

Here is the CHS Hedging recap of the weekly condition report.

https://www.chshedging.com/UserFiles/Documents/2013/Research/USDA%20Crop%20Progress/Crop%20Progress091613.pdf

As for cash markets; look for the nearby to continue to show pressure for local markets. Why and why so generic? Because we simply can’t get enough trucks or rail cars to move the product that is trying to move ahead of fall harvest. Plus we have a little new crop corn coming in to a few locations. I expect to see basis get extremely wide for some of the grains in the short term. Longer term I do think we could see a bounce; but over the next month or so it just feels like we are going to get ran over with product.

Please give us a call if there is anything we can do for you.

Wednesday, September 11, 2013

Opening Comments 9-11-2013 - USDA Report Preview

Markets are called mixed this morning as it appears the trade is a hurry up and wait for the USDA report which is out Thursday at 11 a.m. central time.

In the overnight session corn as unchanged, KC wheat was unchanged, MPLS wheat was up a penny, CBOT wheat was unchanged, and soybeans were up 3 ½ cents. At 8:00 outside markets have the US Dollar unchanged, crude about unchanged, gold down 2 bucks an ounce, and the DOW futures pointing towards a start of about unchanged.

Very quiet trade last night as well as the past few days. Basically feels like the market is waiting for some questions to get answered. How big or big are our fall crops and what is the USDA going to say about crop size as well as demand. As it sits right now we do have harvest activity happening in different areas of the US and overall I would say the theme seems to be “better than expected” for corn yields. But it is very early and most seem to be in the camp that corn yields could go either way; with a slight downward bias. The problem for corn is that unless demand can really pick up a couple bushel an acre drop in yield is still going to leave us plenty of corn.

Bottom line is a headline of 1.5-2.0 billion bushel carryout for corn isn’t attracting money flow’s attention and that is what we are really in need of. A headline that gets the funds buying some more of our grains; a corn and wheat headline in particular.

Most thing that the big headline out of the report on Thursday will be the beans and most look for corn and wheat to follow the soybean price action. Now how much corn and wheat follows will be questioned.

As for the beans most are looking for a big drop in yield; some are in the camp that our crop is smaller than a year ago. When everything is said and done I think that is a possibility just based on weather; but I also think we have some risk that the USDA looks at the crop conditions being 20% better than a year ago and prints a much bigger production number then most in the market believe. Plus there are a few analysts out there that actually thing soybean yield isn’t going down as much as what most of the crowd thinks.

Below are the estimates for the report; they come from the Van Trump Report. The one thing that really stands out to me is the huge estimate range for production. The soybean range for production is bigger than the last carryout numbers we had a month ago. When looking for risks heading into reports sometimes we want to look at what everyone is thinking won’t happen. You will notice below that the every estimate for soybean production is less than last month. I would be more then shocked if the USDA left bean production unchanged; but we are dealing with the USDA.

Here is link to CHS Hedging Pre-Report write up. Very good info and good explanation as to the numbers they feel the USDA will print.

https://www.chshedging.com/UserFiles/Documents/2013/Pre%20USDA%20Report%20Comments/090913.pdf

USDA September Crop Report - US Production Cheat Sheet

	Average Trade Guess	Trade Range	August Est.	2012 Final #
Corn Production	13.620	13.330 - 14.013	13.763	10.780
Yield	153.690	150.200 - 157.200	154.400	123.400
Harvested Acres	88.559	87.000 - 89.140	89.100	87.400
Soybean Production	3.140	2.980 - 3.239	3.255	3.015
Yield	41.172	39.000 - 42.400	42.600	39.600
Harvested Acres	76.248	75.100 - 77.000	76.400	76.100

Global Ending Stocks

	Average Trade Guess	Trade Range	August Est.
2012/13
Corn	122.798	115.860 - 125.000	123.110
Soybeans	61.730	59.700 - 62.220	62.220
2013/14
Wheat	172.760	169.350 - 175.720	172.990
Corn	146.927	125.920 - 152.000	150.170
Soybeans	71.167	67.100 - 75.000	72.270

US Ending Stocks

	Average Trade Guess	Trade Range	August Est.
2012/13
Corn	0.718	0.579 - 0.769	0.719
Soybeans	0.123	0.107 - 0.145	0.125
2013/14
Wheat	0.551	0.477 - 0.600	0.551
Corn	1.732	1.147 - 2.296	1.837
Soybeans	0.165	0.114 - 0.230	0.220

Please give us a call if there is anything we can do for you.

Tuesday, September 3, 2013

Opening Grain Market Comments 9-3-13

Markets are called better this a.m. behind a very firm overnight session that was lead by soybeans.

When the overnight session ended we had soybeans up 46 cents, KC wheat up 5, MPLS wheat up 4, CBOT wheat up 6, and corn up 6. Outside markets at 8:00 have the US dollar up 200 points with the cash index at 82.318, crude about unchanged at 107.50, gold up 2 bucks, and the DOW futures pointing towards a positive start of about 100 points.

A very choppy volatile trading session last night. In the soybean market in particular. We gapped higher by opening up around 37 cents higher, then moved up to nearly 50 higher, only to break some 26 cents, before moving higher getting to up 50 cents with just a few minutes before the end of the session

Why so strong in the soybean market? First off we did have some longs exit late last week before the long weekend. So perhaps some of them wanted to get back in? Overall it looked like most called the moisture that we got over the corn/bean belt over the weekend as expected to less than expected. Plus the forecast doesn’t show much moisture any time soon. Many are saying that it will be too little too late when/if the moisture hits.

Fundamentally many are talking about even lower bean yields with some thinking perhaps we will be less than year ago. So many are jumping on the bandwagon that we need to ration off demand. One thing to keep in mind is that the USDA had big increased year over year in demand; so don’t be surprised if the USDA report we get Thursday the 12^th shows some demand coming off the table to offset production decreases.

Corn and wheat seem to just be following the bean market. Not exactly super willing followers either; at least not yet. Now if the bean market is for real and it looks to be that right now. One has to thing that it gives some support to corn and wheat; if for nothing else for acre purposes in the coming year.

Please give us a call if there is anything we can do for you.

Thanks

Monday, September 2, 2013

charts 9-2-13

posted some charts for soybeans, corn, and KC wheat

next few sessions should be very important to direction

Friday, August 23, 2013

opening grain market comments 8-23-13

Grain Markets are called better behind a firmer overnight session.

In the overnight session corn was up 5-7 cents, KC wheat was up 2-4 cents, MPLS wheat was up a penny, CBOT wheat was up 4, and soybeans were up 16-18 cents. At 8:00 outside markets have the US dollar about unchanged with the cash index at 81.57, crude about unchanged, gold up a buck, and the DOW futures are pointing towards a start of the equity markets of about unchanged.

Weather market right now; yesterday the market looked at the system that moved threw some key corn and soybean growing areas. Today the market seemed to be looking at the very hot and dry forecasts that we have out there. The heat should help the behind crop continue to catch up; but lack of moisture doesn’t help for yields.

Wheat basis feels very soft; but the good news is I do think we will slowly start seeing some pro scales for spring wheat. I am not sure on winter wheat as we simply seem to be over protein for what the mills are looking for. Plus there is plenty of 12.5-13.0 pro spring wheat out there; maybe the mills will simply use that instead of HRW? One thing that could happen for protein scales is we could end up seeing a better basis in the areas that have better protein and less scales; but really might be a little early to know how that thing is going to shake out. The bottom line is overall basis for spring wheat felt soft yesterday; but higher proteins actually felt a little better; winter wheat basis felt extremely ugly.

Old crop corn basis remains volatile; with some buyers searching for some corn. The September contract has really gained on the December corn contract in the past few days. Many are starting to wonder if this could be the year that the September contract finally goes off the board above December for corn.

The one thing I would say about old crop corn is be cautious; we all know how the game ends; we just don’t know when it ends. Also keep in mind that everyone every spot isn’t able to take part in a squeeze. As example rumor right now is that some are short some shuttles of corn; but in our area I am not sure that shuttle quantities are out there and if they are out there we couldn’t take part because of the fact that we have too many bins full of wheat from spring wheat harvest. So a short term squeeze might help those in corn country but we might not be able to participate. The other thing one has to watch is local end users; if our local end users are covered until new crop then it won’t matter what their competitors is willing to pay; if they don’t need it they are going to buy it just to buy it. Bottom line is caution should be used with old crop corn. We have moved into a very high stakes poker game.

From CHS Hedging in regards to Pro Farmer

“Pro Farmer tour estimates corn yields in Iowa at 171.94 b/a., above the 3-year average of 157.09 b/a…….Minnesota corn yield is estimated at 181.09 b/a., compared to 172.53 b/a for the 3-year average…….. pod counts in Iowa at 927.30 pods versus 999.80 last year……3 year average is 1,189.74 pods in a 3’ by 3’ square. The pod count in Minnesota totaled 869.42, below the 3-year average of 1,099.44 pods…….how accurate are pod counts at this stage in regards to final yield?”

Results should be this afternoon at 1:30 for the Pro Farmer Tour.

Please give us a call if there is anything we can do for you.

Thanks