August 1, 2016 Commmentary

The market is retreating this morning as the latest weather update holds no excessive heat through the first half of August. We actually have chances of rain almost every day through that fifteen day period. Crop condition ratings should be steady to slightly lower on the update this afternoon. A slight decrease this time of year is fairly normal.  At 7:30am, corn is down 2-3 cents, soybeans down 16-19 cents with wheat up 1-3 cents. The dollar trading up about 165 with crude oil down $.40. Remember, we have the USDA Supply and Demand Report next Friday. The trade is expecting that the carryout will increase on corn and soybeans. USDA announced the sale of 391tmt of new soybeans to unknown buyer.

Weekly export inspections were strong at 45.0 million for corn, 24.7 million soybeans and 24.3 million for wheat. These numbers, along with the soybean export announcement, are not enough to stop the slide today on the board. November soybeans have made a new recent low at $9.5825 as funds liquidate more of their long position. The funds are thought to still be long around 120,000 contracts on beans. December corn has traded within $.0125 of the contract low of $3.3325. The sharply lower crude oil market is not helping either. Crude has traded below $40.00 today and continuing the recent decline.

The USDA reported the corn crop at 76% good to excellent for the third week in a row. They actually raised the soybean rating 1% to 72% good to excellent. September corn closed down $.0875 at $3.2575 with December corn down $.085 at $3.3425. November soybeans closed down $.415 at $9.615. Cash soybean bids are now versus the November futures on most of the river bids.

July 28, 2016 Commentary

I will be out of the office tomorrow so this is the last commentary for the week. The market has provided us with a wild ride through the first two months of the summer. We saw the market race to much higher levels than anyone anticipated after the weather issues in South America and the very hot, dry conditions that we experienced in June. We had the forecast for a ridge to develop which tried to rally the market for a second time, but we traded the ridge talk and the lack of a ridge both within a narrow five day window. Now as we head towards the August USDA report, we face the likelihood that corn and soybeans yields will be increased. The latest talk has the corn yield around 171.0 to 172.0 bushel per acre. This is near levels where I have said we would have to adjust to if crop conditions stayed at 75-76% good to excellent. Soybeans have been trying to recover some the last few days, but are still only about $.20 higher than the recent lows. It sure looks like we are going to have very good crops which will make it hard to rally prices very far. Fortunately, we have, and will continue to have, very good export demand through the end of the year. As we head to the break, corn is down a penny, soybeans down 3-4 and wheat up 2-3 cents. The dollar is sharply lower and trading about 575 lower. Crude oil is slightly higher after tumbling for the past week. Even in Illinois, gas prices pushing down near $2.00 a gallon again.

Weekly exports were 17.2 million old corn, 18.7 million new corn, a slightly negative number for old beans, 24.9 million new beans and 18.6 million wheat. USDA announced this morning the sale of 66,000mt of old beans and 63,000mt of new beans to China. They also announced the sale of 65,000mt old beans and 263,000mt of new beans to unknown buyer. The market was never able to recover today even with the sharply lower dollar. Pressure from cooler weather coming with plenty of chances for rain. September corn closed down $.045 at $3.3125 with December down $.0425 at $3.3875. August beans briefly dipped below $10.00 on the board today, but recovered enough to close down $.07 at $10.035. November soybeans finished down $.08 at $9.78 which is just $.15 above the recent low of $9.63. September wheat closed down $.045 at $4.1025. Nearby wheat looks trapped between $4.00 and about $4.25 for now. Nearby corn basis was 2-3 cents weaker again today. Have a great weekend and I will be back on Monday.

July 27, 2016 Commentary

The market looks like we are seeing some corrective type trade today. We are higher across the board with corn up $.04, soybeans up $.13 and wheat up $.04. The 6-10 and 8-14 day weather forecasts call for above normal temperatures with above normal rainfall. The Bulls are clinging to the chance of still seeing a weather market at least for soybeans. The fund traders are short on corn positions, but still hold a significant long position on soybeans. The dollar currently trading up over 150 with crude oil down about $.15. Even though we have the potential for very large crops this fall, we currently have strong demand for U.S. grain. Grain out of South America is either not available to be sold now or is at levels priced higher than U.S. commodities.

The USDA announced the sale of 65,000mt of old soybeans and 66,000mt of new soybeans to China. They also announced the sale of 74,000mt of old corn and 173,000mt of new corn to unknown. We should be able to stay competitive in the export market through the end of this year. Weekly ethanol production was down 3.01% compared to last week. Corn ground for ethanol was strong at 104.79 million bushel compared to the 83.328 million needed on a weekly basis. We managed to keep some gains on corn and soybeans today. Although it was not very exciting, September corn did manage to close up $.0325 at $3.3575 with December up $.035 at $3.43. August soybeans closed up $.17 at $10.105 with November soybeans up $.1225 at $9.86.

July 26, 2016 Commentary

We are mixed on the board this morning as we head to the 7:45am break. Corn is down 2-3 cents, soybeans are up 2-4 and wheat is down 5-7 cents. Corn pressured by the 76% good to excellent rating again this week which lends support to the likelihood that the yield on the August report will be increased from 168.0 bushel per acre to something 170 or above. Crop rating on soybeans remained at 71% good to excellent with thoughts that the soybean yield will increase slightly as well. However, we still have a month of weather that will play a big role in that final yield number. The dollar is slightly weaker this morning, but the crop ratings, along with a better forecast, are the focus of the trade. Crude down again today on over supply concerns and trading around $42.50.

The market ended like it started today with corn and wheat lower. but soybeans finishing higher. September corn closed down $.0225 at $3.325 with December down $.0175 at $3.395. September wheat finished down $.14 at $4.15. Corn and wheat share the same problem of just too much carryout both in the U.S. and around the world. August soybeans closed up $.0975 at $9.935 with November up $.075 at $9.7375. About the only question now is, will the funds buy back some of their short positions ahead of the August report? There is just really nothing else to talk about today, so I will see you tomorrow.

July 25, 2016 Commentary

We are starting off the last week of July with mixed trade. Everything is slightly higher this morning except for 2017 soybean contracts. Wheat continues to see buying power tied to covering of very short positions held by the funds. Mild support coming from the dollar trading down over 100. Crude oil is continuing the slide and is currently down $.53 at $43.66. We will see the USDA weekly crop progress report at 3pm today. Most of the Midwest received some rain over the weekend with the excessive heat breaking down at last. Our temperatures are expected to be in the eighties this week with several more chances of rain. It will be interesting to see if anyone starts talking about too much rain for the soybeans. We were expected to see hot and dry conditions, but we keep getting rain. The wheat trade is leading the way this morning.

Weekly export inspections for corn were 41.42 million bushel. This is down from 52.26 million last week and well short of the 92.5 million bushel needed on a weekly basis to meet USDA projections. Soybean export inspections were 25.74 million bushel and wheat inspections were 20.2 million bushel. The export inspections for soybeans and wheat exceeded the amount needed on a weekly basis. November soybeans have made a new low for this recent move lower when they reached $9.63. Crude oil is trading at a three month low as pressure mounts again from global supply concerns.

Wheat was the only commodity to stay in positive territory. September wheat closed up $.0375 at $4.29. Corn spent most of the session at lower levels after the wheat trade backed off the early highs. Today was another session of fund selling on soybeans with November futures closing down $.22 at $9.6625. The USDA left the corn condition rating unchanged from last week at 76% rated in the good to excellent category. The soybean rating was also left unchanged at 71% good to excellent. At this time last year, corn was rated at 70% good to excellent  with soybeans rated at 62%. The USDA will most likely raise the yield projections on the August 12 report.

July 22, 2016 Commentary

Markets are off to a very bad start this morning. Corn is down 2-3 cents, soybeans down 20-22 and wheat is down 3-4 cents. We got our very hot weather, but we also are receiving good rains over most of the Midwest. Of course, corn is making new contract lows again and December corn is moving towards the next support level of $3.33. The next level is the October 1, 2014 contract low of $3.18. The dollar is up about 135 with crude oil up about $.17. If you have old crop corn left and don’t want to sell these price levels, give us a call about some options to consider.

December corn fell all the way down to the $3.33 support level, but managed to bounce back and close up $.01 at $3.4175. November soybeans blew through $10.00 and traded all the way down to $9.6625 before bouncing back off the low to finish down $.2425 at $9.8825. Wheat dropped a dime today before finding buyers just above $4.00 on the September futures. Traders are very short on wheat futures and used today’s break to book some profits. September wheat closed up $.075 at $4.2525.  Corn benefitted from the rally back on wheat.

The question now becomes have we put in a short term low for corn and soybeans? I believe we have and that we will bounce back some in August on a corrective type trade. The seasonal trend over the past fifteen years points to this type of price action. However, I do not believe the lows are in for the year and that we will make new lows most likely in September. Use any type of corrective trade to higher levels to sell old crop inventory. Have a great weekend, stay cool and we will be back on Monday!

July 21, 2016 Commentary

We are higher across the board this morning, but we will have to wait and see if that continues after the morning break. December corn still under the old contract low at this time. Soybeans trying to gain back about half of yesterday’s losses. We are getting a break this morning as the dollar is down over 200. Crude oil continues the recent slide and is down about $.25. Funds are now short on corn and they have liquidated a good portion of their soybean contracts. Weekly exports were 13.6 million old corn, 19.9 million new corn, 11.9 million old soybeans, 36.7 million new beans and 17.6 million wheat.  We are still going to be very hot through this Sunday, but we drop back into the eighties next week with chances of rain. Please be careful if you have to be outside today.

Another day, another new contract low for December corn. We not only made a new contract low at $3.3925 today but we closed under yesterday’s contract low of $3.415. December corn closed down $.035 at $3.4075. The next level down looks to be around $3.33. November soybeans finished $.12 off the high of the day, but did manage to close up $.035 at $10.125. Yesterday’s low of $10.045 on November soybeans was once again the low today. September wheat closed up $.0475 at $4.1775.

July 20, 2016 Commentary

Rain is moving across our trade area this morning with more chances for rain over the next five to six days. We are slightly higher this morning across the board and are in need of finding support at yesterday’s lows. Hopefully, there is end user buying present at these lower levels that we give us a chance at a slight recovery. The highs for corn for the summer appear to be in with the lows now becoming the unknown. The latest 6-10 and 8-14 day forecasts do show cooler weather, but with not much rain. Not sure a dry period without the heat will matter much if it don’t last too long. The dollar is up about 170 with crude oil down about $.75.

The market has turned lower at 10:45am for corn and wheat. September wheat has made a new contract low this morning at $4.065. December corn has been within $.0025 of the $3.46 low. Soybeans currently higher, but off the highs from earlier today. Oil World released news that they expect China to import about 4% less soybeans this coming year. They expect China to accomplish this by higher production and by selling about 4.3mmt of their state-owned reserves. The USDA is currently projecting our soybean exports to increase by 7% compared to last year. Weekly ethanol production was up 2.5% compared to last week. Corn ground for ethanol was estimated at 108 million bushel compared to the 86.6 million needed on a weekly basis to meet USDA projections.

The selling pressure never let up today with corn and wheat making new contract lows and soybeans dropping below recent support levels. December corn made a new contract low at $3.415 before closing down $.0425 at $3.4425. November soybeans fell below recent support at $10.21 and traded as low as $10.045 before closing down $.1875 at $10.09. November beans have not traded this low since May 6 when they touched $9.97. As of today, we have lost all of the June weather premium that had been added to new crop soybeans. I see our recent weather forecast for the balance of this week is not as hot as it was yesterday with more chances of rain. It may be difficult to see crop ratings drop any on next Monday’s USDA update. I still say the current corn rating of 76% good to excellent warrants a yield greater than 168.0.

July 19, 2016 Commentary

This morning the grain market is giving back all of yesterday’s gains and then some. Apparently, the latest forecast has some rain around and the ridge breaking down after this weekend. The nearby forecast calls for some decent chances of rain across the Midwest, but the extended period shows below normal levels. Everything points to a market with plenty of movement, but, unfortunately, we are drifting lower once again. The dollar is trading up over 525 with crude oil slightly higher. As far as the corn market, we are running out of time to sell our old crop inventory. The corn crop was still rated at 76% good to excellent on last night’s USDA update. We need to sell any bounce back on the corn trade and, to be safe, look at $3.85 to $3.95 for July corn. At the 7:45am break, corn is down $.08, soybeans are down $.16 and wheat is down $.06.

We are sharply lower across the board as we approach lunch time. The only news for grain today is bad news. Selling pressure evident today after the strong crop ratings and the stronger dollar. Also, private weather forecasters have added more rain to next week’s forecast. I was trying to remember what our crop ratings were in 2014 for this same time frame last year, so I did some digging. Corn was rated at 76% good to excellent in 2014 and I believe the yield that year finished at 171.0 bushel per acre. This year soybeans are rated 71% good to excellent versus 73% in 2014. If our corn yield bumps up 3.0 bushel per acre on 86.6 million harvested acres, that would add over 250 million more bushels to our crop size.

We closed sharply lower across the board with our lows for the session being made late in the day. Once again prices dropped near the new contract lows or near the recent lows. December corn closed down $.1475 at $3.485 which is just above the contract low of $3.46 made on July 6. November soybeans traded as low as $10.23 which is just above the recent low of $10.21 made on July 8. They closed down $.385 at $10.2775. September wheat closed down $.115 at $4.18. Two days down, only five more hot ones until we get a break! Stay cool!

July 18, 2016 Commentary

We are going to be very hot this week all the way through Saturday, but then the temperatures break and return to normal. The market started off higher last night, but prices have faded by the morning hours. At 7:35am, corn is trading down about $.03 with soybeans down about $.16. Wheat is hovering around unchanged. The U.S. dollar is slightly higher this morning with crude oil down about $.50. The USDA will have the weekly crop ratings update at 3pm this afternoon. I would expect that the ratings will be similar to last week.

The USDA reported weekly corn export inspections for last week at 52.26 million bushel. Soybean export inspections were 13.5 million with wheat at 16.15 million bushel. The numbers for all three commodities were below what is needed on a weekly basis to meet USDA projections. The latest 6 to 10 and 8 to 14 day NOAA weather maps call for above normal temperatures with below normal rainfall for Iowa, Missouri, Kansas, Minnesota and the Dakotas. The uncertainty about the weather over the next several weeks, allowed grain prices to find support today and bounce back to close higher. September corn closed up $.0475 at $3.57 with December corn up $.05 at $3.6325. Soybeans closed up $.0575 at $10.7825 on the August contract with November soybeans up $.09 at $10.6625.

The USDA crop condition update shows 76% of the corn crop still rated as good to excellent with soybeans still rated at 71.% The trade had expected rating to either remain the same or possibly show a slight decline.

© 2019 CHS Inc.