November 9, 2016 Commentary by Dennis Wieseman

The markets have bounced back this morning after the sharply lower trade we saw last night as the election was coming to an end. As we head to the break, corn is down $.03, soybeans down $.02 and wheat down $.04. The dollar has bounced back and is currently trading about 115 higher with crude oil near unchanged. We have the USDA report at 11am with not much to talk about until we see the numbers. The average trade estimates look for the corn yield to be lowered .4 of a bushel with the soybean yield raised .6.

The last few days I have been worried about the USDA raising the corn yield. I said that could be the surprise to this report. Surprise!

Report Highlights-

-Corn yield raised 1.9 bushel per acre to 175.3 from 173.4 last month

-Crop raised 169 million bushel

-Milling raised 60 million with Ethanol grind raised 25 million

-Net result corn carryout raised 83 million bushel to 2.403 billion bushel

-Soybean yield raised 1.1 bushel per acre to 52.5 from 51.4 last month

-Crop raised 92 million bushel

-Crush lowered 20 million with exports raised 25 million

-Net result soybean carryout raised 85 million to 480 million bushel

The report was bearish, bearish and a little more bearish! As we wrap up harvest in the weeks ahead, the trade really has only the weather in South America to focus on for a price recovery. December corn closed down $.135 at $3.4075 and has not traded this low since October 13. January soybeans broke below $10.00 and closed down $.2025 at $9.91. Kudos to all our producers that have been selling beans since October 26 when futures finally moved back to $10.20 to $10.30.

November 8, 2016 Commentary by Dennis Wieseman

January soybeans up again this morning on the strength of soybean oil. Soybean oil has been the key factor leading beans back from this last break. The trade expects the soybean yield to be raised .6 of a bushel. That would take soybean carryout to around 420 million if the demand side is raised by about 20 million bushel to offset some of the production increase. January soybeans have touched $10.1175 so far today. The recent high has been $10.31 on October 27. Corn and wheat still look like the deer in the headlights this morning. They are trading slightly higher but with no real conviction. Surprisingly the dollar is very quiet this morning with crude oil down about $.20 and trading around $44.70. Today’s trade should be centered around position squaring ahead of the report and ahead of the election results. Stay tuned because it should be an interesting 24 hours.

At 9:30am, corn is up 6-7 cents with wheat up 4-5 cents. The trade is seeing shorts cover some positions on corn and wheat ahead of the report. Funds continue to add to their long position on soybeans on the strength of palm oil and soybean oil. We are again buying soybeans at that $10.30 plus level for January delivery to the river. January soybeans raced to $10.2075 before backing off late and closing up $.1275 at $10.1125. Once again we were able to buy all our $10.40 January soybean offers. No real reason for the strength in corn and wheat today but we will take it ahead of the report. December corn traded up as much as $.1025 before closing up $.08 at $3.5425. Remember the USDA Report is tomorrow morning at 11am.

November 7, 2016 Commentary

January soybeans trying to trade back above $10.00 on the board this morning. They have reached $10.0175, but now have dropped to slightly under $10.00. We should see more crop estimates from several more private firms as we approach the USDA report on Wednesday. Trade still looks for the corn yield to be lowered slightly with the soybean yield to be increased. The average trade estimates so far have the corn yield at 173.2 bushel per acre and soybeans at 52.0 bushel per acre. The USDA is currently using 173.4 for corn and 51.4 for soybeans. I am sticking with my 52.2 estimate for soybeans.   The dollar is recovering from last week’s drop and is currently trading up about 580. Crude oil also rebounding and is currently trading at $44.61 up $.54. Corn and wheat are quiet this morning with soybeans leading the way at about $.09 higher. Most of the Midwest saw good weather for harvest activity this weekend so the trade now expects corn harvest to be near 85% complete and soybean harvest near 95% complete on the update this afternoon.

USDA announced this morning the sale of 172,000 tons of corn to unknown buyer and 132,000 tons of soybeans to China. Weekly export inspections were strong again for soybeans at 96.4 million bushel. Corn inspections good at 35.0 million with wheat at 18.2 million bushel. Excessive rain in parts of Argentina is delaying corn planting. Some of those threatened acres may switch back to soybeans. January soybeans were unable to trade back above $10.00 after the 8:30am break, but did manage to close up $.0775 at $9.985. December corn never recovered and closed down $.025 at $3.4625 with December wheat down $.0425 at $4.10. USDA reports this afternoon that corn harvest is 86% complete versus 91% last year and an average pace of 85%. Soybeans are reported at 93% harvested versus 94% last year and an average pace of 91%. The two big potential surprises for the USDA report are, if the corn yield increases instead of declining and if the soybean yield increases by over 1 bushel per acre. Vote tomorrow and report on Wednesday.

November 3, 2016 Commentary

We are off to another quiet start this morning, but this time corn and beans are slightly higher and wheat is lower. Weekly export sales were 57.9 million corn, 92.2 million soybeans and 8.6 million wheat. A strong week of sales for corn and soybeans. Latest talk from Argentina centers around some planting delays that could switch some acres from corn to soybeans. This would be the result of some recent flooding. Our trade looks to continue to square positions ahead of the USDA report next Wednesday. The dollar is lower for the third consecutive day. Crude oil up about $.30 this morning after finding support yesterday at $45.00. Good rains around our area last night and across the river. Our harvest will drag on now for another week or longer.

USDA announced the sale of 432tmt of corn to Mexico and 120tmt of soybeans to unknown buyer. December corn closed up $.0175 at $3.48 with November soybeans up $.03 at $9.7975. Informa out today with their yield estimates for next Wednesday’s report. They placed the corn yield at 174.0 bushel per acre compared to the USDA currently at 173.4. The soybean estimate was 52.4 compared to the USDA at 51.4.

November 2, 2016 Commentary

We are off to a very quiet market this morning. January soybeans dipped to $9.865, but have since bounced back to trade about a penny higher. December corn has been in a narrow $.0175 range so far. The early price action has the making of a quiet two sided session. The dollar is lower again this morning and currently trading down about 400. Crude oil continues to slide and has now dipped below $46.00 a barrel. It sure does not break my heart or pocketbook to see gas back down near $2.00 a gallon! The USDA report next Wednesday hangs over this market as we wait for more private estimates on yields and crop sizes. I still look for a soybean yield at 52.2 bushel per acre. Yesterday FC Stone came out with an estimate of 52.8 for soybeans and 175.3 for corn. Most in the trade, however, look for a slight decline on the corn yield with an increase on the bean yield. The surprise on this report to the trade would be if the corn yield is raised. Funds were active sellers yesterday, so what do they do today? USDA announced this morning the sale of 132tmt of soybeans to China.

Weekly ethanol production was up 3.13% versus last week and up 5.47% versus last year. Corn ground for ethanol estimated at 107.3 million bushel compared to 100.959 million needed on a weekly basis to meet the USDA projection of 5.275 billion. At least the demand for ethanol is supporting the corn market. With the weather deemed ok for now in South America, the funds have put back on their selling shoes and are forcing corn and soybeans lower again today.

Corn and soybeans closed lower today as the funds added to their short corn positions and decreased their bean position. December corn closed down $.0275 at $3.4625. January soybeans closed down $.0675 at $9.865 and are now about $.45 lower since trading $10.31 on October 27. Post harvest rallies are over and the trade back to focusing on large grain supplies. Corn prices are obviously going to need more time to meet our price objectives, which is why we were encouraging our producers to lock in strong gross dollars per acre on their soybeans.

November 1, 2016 Commentary

The funds were fairly quiet yesterday as we closed out October. November is here and the days are getting shorter. Remember, we fall back this weekend. The market is quiet again this morning with a slightly lower bias. November soybeans will once again try to defend $10.00 on the downside. December corn trying to stay above $3.52-$3.53 on a close. Harvest progress for corn and soybeans was at or slightly above the average pace. The weather looks good for harvest activity to keep rolling along for most of this week. The dollar is taking a break today and currently trading about 315 lower. Crude oil has dipped as low as $46.56 this morning, but has recovered to trade back above $47.00. As we work to wrap up our harvest, the focus will turn even more to the weather in South America for the next 4-6 months. Overall, the weather there is considered ok for now.

USDA announced this morning the sale of 212tmt of corn to Mexico. The market is showing weakness today as December corn has dipped below $3.50 support and November soybeans have fallen below $9.90. At the start of a new month, trade talk centers around large U.S. and world supplies. Have our seasonal tendencies run out of gas? For the month of October soybeans were able to gain back $.86 from the September low and corn was able to recover $.45 from the contract low made on August 31. Fortunately, many of our producers took advantage of this recent move on soybeans to sell December or January beans from $10.25 to $10.40.

The number one reason for today’s price action was that it is a new month and the post harvest rallies usually fizzle by the first of November if you have a big crop. December corn closed back below $3.50 at $3.49 down $.0575. November soybeans crashed through $10.00 and closed down $.18 at $9.8425. Funds were quick today to add to their short position on corn and to decrease their long position on soybeans. Now we need to find how low we may have to go to find solid support. January soybeans may have to dip to $9.65-$9.70 in the short term. December corn will need to hold in the $3.42-$3.43 area. We will get private estimates on yields and crop size in the days ahead.

 

October 31, 2016 Commentary

Corn and soybeans look a little spooked this morning. It must be because today is Halloween! No big deal for me. I am not a big fan of Halloween. I like the real holidays like Christmas and Easter. So far we are seeing some follow through pressure on grains after Friday’s poor close. November soybeans have dipped below $10.00 on the board with December corn down around $3.53. What do the funds want to do with their positions at month end? They are still long soybeans and short corn and wheat. Remember, we have the USDA Supply and Demand Report next Wednesday. The trade still thinks the soybean yield will be raised again. The dollar bouncing back this morning and currently trading 228 higher. Crude oil continues the recent slide and is down $.56 at $48.14. Corn harvest expected to be 73-77% complete with soybean harvest 84-87% complete.

Corn and soybeans have rebounded after early weakness pushed them below nearby support levels. Soybeans supported by another strong week of export inspections of 105.4 million bushel. Corn export inspections were 31.2 million with wheat at 12.0 million. USDA reported this morning the sale of 264kmt of soybeans to China. A very quiet session today with a close that was less than exciting. December corn finished down $.0025 at $3.5475. November soybeans closed up $.01 at $10.0225. We did see producers make another round of soybean sales today ahead of next week’s report. USDA reported the corn harvest at 75% complete versus 82% last year and an average pace of 75%. Soybean harvest reported at 87% complete versus 91% last year and an average pace of 85%.

October 28, 2016 Commentary

We are getting close to closing out the month of October. To this point, corn has gained back $.45 from the $3.1475 contract low and soybeans have gained back $.86 from the recent low of $9.34 on September 27. In late October and early November grains retreated last year and we needed all November to get back to near unchanged levels. Our producers are not selling much corn yet, but our soybean sales have increased with December and January river bids above $10.40. We are slightly lower across the board this morning as we head to the break. The dollar is down about 165 this morning and trying to take a break from the recent move higher. Crude oil down about $.30 and back under $50.00 a barrel. Most of the Midwest should see an active harvest weekend. We would expect that the harvest progress update on Monday should show corn harvest 70-72% complete and soybean harvest 86-90% complete.

November soybeans traded both sides several times today but could never challenge yesterday’s high of $10.20 We saw late selling pressure on soybeans when the buying dried up and hedge pressure took over on what should be the last very active harvest weekend for soybeans. November soybeans closed down $.13 at $10.0125. We saw soybean basis levels 4-5 cents weaker today on higher barge freight. Corn tried to hang in there today, but came under mild pressure when the soybeans moved to double digit losses. December corn closed down $.025 at $3.55 with December wheat down $.06 at $4.085. Have a great weekend and I will talk to you again on Monday.

October 27, 2016 Commentary

Yesterday I was unable to finish my comments because our internet service went down. As I said yesterday morning, we needed to close above $10.00 on the November soybean futures and we did close up $.1925 at $10.10. Yesterday’s strong close opened the door for a run to the $10.17 to $10.20 level that I also talked about in my comments. We quickly ran early this morning to $10.18. November soybeans have not traded this high since they reached $10.20 on August 20. On the close yesterday, November soybeans were $1.26 higher than last year. Latest weather talk from South America has some flooding in parts of Argentina with Brazil talking about a soybean crop that could reach 103mmt. Weekly export sales were 31.5 million on corn, 75.3 million soybeans and 23.7 million wheat. Wheat sales above expectations with corn sales slightly below expectations. Soybeans were a strong number but in the middle of trade expectations. When we resume trade at 8:30am, the price direction will be determined by the activity of the funds. Stay tuned! Soybean offers for $10.40 for January delivery were all booked last night.

The USDA announced this morning the sale of 396tmt of soybeans to China and 129tmt sold to unknown buyer. November soybeans dipped this morning down to $10.0275, but quickly found buying interest to rally back to higher levels. November futures did reach $10.20 but were unable to find the buying power to trade above that level. November beans closed up $.0425 at $10.1425. If we can take out $10.20 on a close it opens the door for a move to $10.28 to $10.30. At this time, I would guess that the $10.30 resistance area will be hard to take out as the bean market is over bought and due for a correction in the near future. Remember, we are only 8 trading days away from the November USDA report. Corn and wheat went along for the ride again today with December corn up $.035 at $3.575 and December wheat up $.03 at $4.145. Neither commodity was able to test the recent highs set last Thursday. We are starting to buy more December and January beans now that the futures have moved above $10.00 on the board.

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