Today grain future

Corn futures closed mixed, with the front month Sept ’13 contract up 4 cents while the rest of the board is down 3 cents. Basis bids remains firm, which helped boost the Sept 13/Dec 13 spread 10 cents on the day to finish at $0.2350. In the weekly EIA report, US ethanol production was down 24K bpd from last week to 820,000 bpd, and stocks were down 200,000 barrels from last week. Imports averaged 4,000 bpd, down from 19,000 bpd the previous week. In export news, South Korea‘s NOFI group bought 60,000 MT of optional origin corn. The cargo was purchased per wire reports from Agrifert at $1.24 over the CBOT Dec ’13 contract and is for delivery by Feb 5. The DTN National Corn Index finished yesterday at 6.04, down from the previous day’s value of 6.19. The new increased CME margin requirements for corn speculators announced yesterday will be implemented during this evening’s globex trade. Trade ideas for the USDA weekly Export Sales report in the morning are in the 320,000-680,000 MT range, heavily weighted to new crop bookings. This report will be through August 22.

Sep 13 Corn closed at $5.04 1/4, up 4 1/2 cents,
Dec 13 Corn closed at $4.80 3/4, down 5 1/2 cents,
Mar 14 Corn closed at $4.93 1/2, down 5 1/4 cents
May 14 Corn closed at $5.01, down 5 1/4 cents

Soybeans closed the day 3 to 19 cents higher, with the front month Sept ’13 contract leading the way and notching impressive double digit gains. The trade remains focused on chatter regarding cooler forecasts for much of the Corn Belt after Labor Day. Earlier this morning, private exporters reported to the USDA a sale of 120,000 MT (4.4 mbu) of soybeans to China for the 2013/14 marketing year. Some industry sources believe China has purchased up to 3 MMT (110 mbu) of South American beans in the past two weeks since US prices began to take off. The DTN National Soybean Index finished yesterday at 14.39, down from the previous day’s value of 14.58. The new increased CME margin requirements for soybean/meal speculators announced yesterday will be implemented starting during this evening’s globex trade. Trade estimates for tomorrow’s weekly Export Sales report are running 600,000 MT to 1.1 MMT.

Sep 13 Soybeans closed at $14.33, up 19 cents,
Nov 13 Soybeans closed at $13.72 3/4, up 2 1/4 cents,
Jan 14 Soybeans closed at $13.68 1/2, up 3 cents,
Mar 14 Soybeans closed at $13.46, up 10 1/4 cents,
Sep 13 Soybean Meal closed at $463.30, up $7.40,
Sep 13 Soybean Oil closed at $44.31, up $0.25

Wheat futures closed mixed, with the MPLS contract leading the way up 4 cents. The Chicago Sep13 contract was up as much as 5 cents early in the session, but was unable to hold onto earlier gains and finished down 4 cents. The Chicago Wheat Dec13/Corn Dec13 spread was up a penny at $1.7875. Earlier this morning, private exporters reported to the USDA a sale of 119,000 MT of wheat to an unknown destination. In other export news, Egypt’s GASC is tendering for 55-60 TMT of soft and/or milling wheat which will be for October/November delivery. Japan also announced a tender for 120,000 MT of feed wheat and 200,000 MT of feed barley. Trade estimates for the USDA weekly export sales are 400-600,000 MT.

Sep 13 CBOT Wheat closed at $6.46 1/2, down 4 1/4 cents,
Sep 13 KCBT Wheat closed at $7.06 1/4, down 1 cent,
Sep 13 MGEX Wheat closed at $7.34 1/4, up 4 3/4 cents

KS

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How 2013 crops compare with 2009 crops | Grain Market Viewpoint

Corn bulls are wondering just how high prices can climb on the heels of the soybean market. The bears are screaming that even though individual farmers are not talking about record yields, the US as a whole is still on track to break all previous production records for corn. If you remember it was back in 2009 that US farmers produced a record US crop of 13.151 billion bushels and prices in Sept of 2009 plummeted to $2.96^6 per bushel. I am certainly not calling for a repeat performance, but I do believe it is important to review and understand our history. Below are a few highlights and comparisons I think we need to consider:

  • 2009 set a NEW record for US corn production at 13.151 billion bushels. This record still stands, but looks as if it could be beaten this year. The current USDA corn production total is estimated at 13.763 billion bushels.
  • FWIW back in August of 2009 the USDA was projecting a crop of just 12.761 billion bushels, by Jan (the final report) that number jumped to 13.151 billion.
  • Harvested acres in 2009 fell from 80 million in the Aug 2009 report down to 79.6 million acres. Meaning they only cut 400,000 from their Aug 2009 estimate. This time around there is talk the USDA could cut 2-3 million from their current harvested acreage estimate. This would still leaves us with 7-8 million more acres than in 2009.
  • Planted acres were reported at 87 million in the August 2009 report. Final planted acres were adjusted down to 86.5 million. This year around we could be 10 million acres higher considering the current USDA estimate is that we planted 97.4 million corn acres.
  • Yield estimate in the Aug 2009 report was at 159.5 bushels per acre, of which it eventually grew in size to 165.2 final yield estimate.
  • Total corn usage was estimated at 12.875 billion back in Aug 2009 vs. a very similar 12.765 billion in the most recent Aug USDA report.
  • Ending stocks were estimated at 1.621 billion in Aug of 2009 vs. the most recent USDA estimate of 1.837 billion. The big kicker and key to this entire puzzle is that “beginning stocks” in the Aug 2009 report were estimated at 1.720 billion bushels vs. just 719 million currently being estimated by the USDA. That means we had an extra 1 billion bushels in the pipeline compared to what we have available today. That makes a huge difference!
  • Prices in return during Sept 2009 fell to $2.96^6.

The question is will the US corn crop get larger like it did in 2009? Will we collectively set a NEW record for production? Or will the yield setback even further while at the same time seeing major cuts in harvested acreage? We could obviously go either direction right now, but with a billion fewer bushels to rely on the trade is clearly more nervous. Producers should be looking to reduce just a little more new-crop risk on the rallies to insure profitability, but don’t let the perma-bears talk you into selling out just yet. I am going to pull the trigger on another 5% fairly quickly, in an effort to get 70% priced/hedged. Remember, for most of us (with storage) we have at least another 12-months to market our remaining 30%. I am fairly confident we can be somewhat patient and selective with our efforts.

Soybeans have a similar history lesson with 2009 also being the largest in total production at 3.361 billion bushels vs. the USDA’s current estimate of 3.255 billion. Below are few of the additional specifics and historical comparisons:

  • Planted acreage in 2009 ended up being 77.5 million acres slightly higher than the current USDA estimate of 77.2 million. Remember the USDA cut their planted acreage estimate form 77.7 million in July down to 77.2 million.
  • Harvested acreage in 2009 ended up being 76.4 million, the same exact harvested acreage number the USDA is currently using. The problem is a lot of folks are thinking the current harvested acreage number could 500,000 to 750,000 acres too high.
  • Yield estimate in 2009 ended up at 44.0 bushels per acre vs. the current USDA yield estimate of 42.6. Keep in mind in the Aug 2009 report the yield was only estimated at 41.7 bushels per acre and dramatically increased to 44 bpa. We checked the weekly “crop condition” report dating back to late-Aug 2009 and it showed 69% of the crop in “Good-to- Excellent” condition vs. 58% in yesterdays USDA report. By late-Sep the conditions had only fallen by 2% down to 67% “Good-to-Excellent.” Another interesting note is that back in 2009 the late-Sep condition report showed 63% of the soybean crop “dropping leaves” and 5% of the crop being harvested. The late-Aug 2009 report showed the 93% of crop “setting pods” vs. just 84% this year.
  • Total usage in the Aug 2009 report was estimated 3.109 vs a very similar 3.176 billion estimate this year.
  • Ending stocks were estimated at 210 million in Aug of 2009 vs current estimate of 220 million.
  • Crush was estimated at 1.670 billion bushels vs. the 1.675 billion in the most recent Aug USDA report.
  • Exports were estimated at 1.265 billion vs the current 1.385 billion in the latest USDA report.
  • Beginning stocks, surprisingly, in the Aug 2009 report were estimated at just 110 million bushels vs. 125 million this year.

The big difference in my opinion is that the crop started drastically improving from August forward back in 2009. This year the trade is looking for it to continue declining. My only concern is that money-flow may have fictitiously inflated prices this time around. Especially when you consider we are hearing report after report that South America is going to plant NEW record bean acres. Essentially you have a similar US balance sheet but much larger South American production slated to be coming down the pipe. In comparison prices this time around are pushing $14.00 while at the end of Aug in 2009 prices had fallen below $10.00 and later, during the first week of Oct tumbled to $8.78^6. Moral of the story, perception is obviously everything. If the trade is correct and both yield and harvested acres continue to tumble then additional premium can be justified. If the trade is wrong and the yield stabilizes or surprises us in any fashion we are grossly overvalued.

KS

Today grain future

Corn futures closed 13 to 16 cents lower on the day, settling back after the sharply higher close yesterday. The Dec13 contract is now approximately 11% off of the lows made back in mid August. Hot and dry weather forecasts for the bulk of the Corn Belt continue to provide an underlying bullish influence. In the weekly crop progress report, both IA and IN lost 4 points in the good to excellent categories, and IL lost 5% between these two categories from week to week. In export news, Taiwan is said to be tendering for up to 60 TMT of corn for November shipment; while South Korea is tendering for up to 70 TMT of corn for February shipment. The 6-10 day forecast shows above normal moisture wrapping around the perimeter of the Corn Belt. The question will be how far South the rain gets, and how much area is covered. The DTN National Corn Index was at $6.19 yesterday which was 17 cents higher than the previous session.

Sep 13 Corn closed at $4.99 3/4, down 16 cents,
Dec 13 Corn closed at $4.86 1/4, down 14 1/4 cents,
Mar 14 Corn closed at $4.98 3/4, down 13 3/4 cents
May 14 Corn closed at $5.06 1/4, down 13 3/4 cents

Soybeans ended the day in negative territory, down between 13 and 21 cents. The Nov13 contract posted quite a range, trading as low as $13.825 last night, and as high as $14.09 after the pit opened this morning, before the Turn-around-Tuesday phenomenon became evident in a steady sell off to close below $13.71. The Sep13 soybean meal contract made another new high for the move earlier today, trading up to $470, but closing at $455; down $2.70 on the day. Indonesia announced it is considering dropping their 5% import tariff on beans in an effort to relieve domestic food prices. The DTN National Soybean Index was at $14.58 yesterday which was 56 cents higher than the previous session. After the close on Monday, USDA showed 84% of the soybean crop setting pods, which is below the 5 yr average of 90%. Iowa is currently 12 points behind the five year average for the percentage of the crop that is setting pods by this week. Indiana is actually ahead of the 5 year average for this date in terms of how much of the crop is setting pods, but the crop condition rating for this state lost 7 points in the combined good to excellent categories from Sunday to Sunday.

Sep 13 Soybeans closed at $14.14, down 13 3/4 cents,
Nov 13 Soybeans closed at $13.70 1/2, down 19 cents,
Jan 14 Soybeans closed at $13.65 1/2, down 21 1/2 cents,
Mar 14 Soybeans closed at $13.35 3/4, down 17 1/4 cents,
Sep 13 Soybean Meal closed at $455.90, down $2.70,
Sep 13 Soybean Oil closed at $44.06, down $0.38

Wheat futures ended the day mostly lower, with the Minneapolis contract gaining a quarter cent on the day. The Dec13 Chicago wheat contract posted a nearly 10 cent trading range today. In export news, Tunisia is said to be tendering for 84 TMT of soft milling wheat for Sept-Nov shipment. The weekly crop progress report released after the close yesterday revealed a slight improvement in the overall condition of the Spring wheat crop. Harvest is 42% complete, compared to the 5 year average of 54%. Washington and Idaho are way ahead of the 5 year average, while both of the Dakotas are currently well behind the 5 year average pace. The Dec13 Chicago Wheat/Dec13 Corn spread has widened out to $11.25 at $1.7750.

Sep 13 CBOT Wheat closed at $6.50 3/4, down 4 cents,
Sep 13 KCBT Wheat closed at $7.07 1/4, down 1 cent,
Sep 13 MGEX Wheat closed at $7.29 1/2, up 1/4 cent

KS

Soybean, Grain Prices Soar – WSJ.com

Grain and soybean prices soared as hot, dry weather in the Midwest stoked fears that U.S. crop production will fall short of expectations this year.

Soybean prices led advances, surging 4.6% to a one-month high, as traders fretted that adverse weather over the next week will damage the nation’s soybean crop during its critical growth stages. Corn prices followed soybeans higher as traders worried the corn crop, while further along in its development, also may suffer somewhat.

image
Associated Press

A soybean field in Illinois in June. Soybean prices surged 4.6% on Monday. .

Those concerns were bolstered by the U.S. Department of Agriculture’s latest weekly crop-progress report released after the markets closed on Monday. The report showed that the health of U.S. corn and soybean crops deteriorated last week. The USDA said 58% of the soy crop was in good-to-excellent condition as of Sunday, down from 62% a week earlier. For corn, 59% was good to excellent, down from 61%.

The one-day percentage gain in September soybean prices was the biggest for a front-month contract since October 2011 at the Chicago Board of Trade. Prices briefly hit the exchange-imposed daily limit of 70 cents before settling at $14.2775 a bushel, up 62.5 cents.

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Corn prices also hit a one-month high. September corn, the front-month contract, rose 20.25 cents, or 4.1%, to $5.1575 a bushel. December corn, the contract most closely associated with this fall’s harvest, jumped 30.5 cents, or 6.5%, to $5.005 a bushel.

Wheat prices also rose, with CBOT September wheat climbing 20.25 cents, or 3.2%, to settle at $6.5475 a bushel.

Monday’s rally came after grain and soybean prices had tumbled for much of this year amid forecasts for big U.S. crops in 2013 and softer demand for corn from foreign buyers. Market participants largely have been anticipating huge crops this fall that would help replenish domestic supplies that shrunk to historically low levels after last year’s U.S. drought curtailed production.

But the U.S. soybean crop is seen as especially vulnerable to soaring temperatures and dryness in coming weeks as it goes through important growth phases. Also, the crop was planted later than usual due to a chilly, wet spring in the Midwest, making it more vulnerable to adverse late-summer weather.

“People are getting worked up over the weather, and with good reason,” said Jack Scoville, vice president of futures brokerage Price Futures Group in Chicago.

Traders are less concerned about corn supplies because the crop already went through its delicate pollination stage in many areas last month. “We’re going to have corn,” Mr. Scoville said. “But the beans could get very, very snug.”

In the next week, big farm states including Iowa, Illinois and Indiana will experience above-normal temperatures, including 100 degrees in some places, forecasts show.

“We have such a dry pattern across much of the Midwest over the next few weeks,” said Joel Widenor, an agricultural meteorologist with private forecaster Commodity Weather Group LLC. “Our view is that the worst of the dryness encompasses about 40% of the Corn Belt.”

Some analysts cautioned that the potential damage to the soybean crop could be less than feared, noting that soybeans have in the past shown resilience to stressful weather late in their growing season. Last year’s crop, for example, turned out better than some had expected despite the worst U.S. drought in decades, thanks to some timely late-summer rains.

“Crop conditions for soybeans could rebound around harvest time” in autumn, said Sid Love, an analyst with Kropf and Love Consulting in Overland Park, Kan.

Soybeans have rallied over the past week, due in part to concerns raised about the crop’s health during an annual crop tour in the Midwest last week.

The tour’s organizer, farmer-advisory firm Pro Farmer, projected a U.S. soybean crop this fall of 3.158 billion bushels, with a yield of 41.8 bushels an acre. That was below the USDA’s forecast this month of 3.255 billion bushels of production and 42.6 bushels an acre in yield.

Pro Farmer, based in Cedar Falls, Iowa, projected a U.S. corn crop of 13.46 billion bushels, with a yield of 154.1 bushels an acre. That would be down from the USDA’s August estimates of 13.8 billion bushels and 154.4 bushels an acre.

Write to Kelsey Gee at kelsey.gee and Ian Berry at ian.berry

A version of this article appeared August 27, 2013, on page C4 in the U.S. edition of The Wall Street Journal, with the headline: Crop Prices Sizzle on Hot Weather.

KS

Today grain future

Corn futures closed the day with sharp gains, rising 19 to 22 cents across the board. The 6-10 day forecast calls for above average temps in most parts of the midwest, and also above average chances for moisture in most areas with the exception of IA/NE/MO. After the close, USDA released the most recent crop progress report which showed corn conditions in the gd/ex rating declined 3 points from last week to 61%. This figure remains much higher than the same period last year which was at 23%. The Brugler 500 Index declined 7 points from last week to 361. Weekly corn export inspections came in at 7.061 (mbu) vs. 15.330 mbu the previous week. Market year to date figures are now 665.781 (mbu) vs. 1.475 billion bushels last year.

Sep 13 Corn closed at $4.93 1/4, up 19 1/2 cents,
Dec 13 Corn closed at $4.85 1/2, up 22 cents,
Mar 14 Corn closed at $4.97 3/4, up 21 3/4 cents
May 14 Corn closed at $5.05 1/2, up 21 1/2 cents

Soybeans closed the day sharply higher, registering gains between 28 and 44 cents. After the close, USDA released the most recent crop progress report which showed soybean conditions in the gd/ex rating declined 2 points from last week to 62%. This figure remains much higher than the same period last year which was at 31%. The report also showed 72% setting pods, which is well below the 5 yr average of81%. The Brugler 500 Index declined 3 points from last week to 364. September Meal also closed sharply higher, notching gains of 11.50. A warmer outlook for the Midwest over the next 6-10 days as soybeans head into the bloom and pod fill stage was the catalyst for the strong move higher. Weekly soybean export inspections came in at 5.294 mbu vs. 3.433 mbu the previous week. Current market year to date figures are now at 1,308,188 mbu vs. 1,332,890 mbu from the previous year.

Sep 13 Soybeans closed at $13.22, up 38 3/4 cents,
Nov 13 Soybeans closed at $13.03 1/4, up 44 cents,
Jan 14 Soybeans closed at $13.03 3/4, up 42 cents,
Mar 14 Soybeans closed at $12.79, up 28 1/4 cents,
Sep 13 Soybean Meal closed at $420.30, up $11.50,
Sep 13 Soybean Oil closed at $43.45, up $0.64

Wheat futures closed 5 to 10 cents higher on the day. The Chicago contract was the strongest, finishing the day with double digit gains. Weekly export inspections came in at 33.787 mbu vs. 24.345 mbu the previous week. Current market year to date shipment figures are now 274.459 mbu, well ahead of the 213.967 mbu figure from the previous year. The Chicago Wheat Dec ‘13/Corn Dec ’13 spread declined another 12 cents to close at $1.6800. After the close, USDA showed 96% of the winter wheat crop is harvested, just above the 94% average. Spring wheat is just 18% harvested vs. the 38% average for this date. Spring wheat good/ex condition was unchanged from last week at 66%, but did lose 2% from the excellent category.

Sep 13 CBOT Wheat closed at $6.41 1/2, up 10 1/2 cents,
Sep 13 KCBT Wheat closed at $7.03 1/4, up 5 cents,
Sep 13 MGEX Wheat closed at $7.45 1/4, up 8 cents