Grain Exchange 2-25-20

Grain exchange update with Katie Demrow

Morning markets are slightly firmer after a rough Monday to start the week. Coronavirus still seems to be the major headline impacting almost all global markets as cases continue to add up. Italy announced that they have had six deaths due to the virus and 219 cases. This has caused one of their main financial hubs, Milan, to shut down business in many aspects. Markets including energies, grains, and livestock were all down yesterday, and the DOW lost more than 3%. Crude oil futures were down 4% yesterday, which put prices below $52 per barrel. While these markets aren’t favorable to grain prices, this may be a good time to look into booking some of your future fuel usage.

The eastern corn belt will see some wet weather today through Friday, and the 8-14 day forecasts are showing some more wet weather March 2-9. We’re on track to be one of the warmest winters on record, with the average temperature tracking three degrees Celsius warmer than the 20th century average. Brazil is also seeing wet weather with rain fall yesterday and continued precipitation and thunderstorms in the forecast for the next 5 days. This is causing harvest delays, as well as some issues loading at the ports. Argentina also saw widespread rains over the last 24 hours.

We saw big futures volumes today as the March board is set to expire soon. Corn traded 448 thousand contracts while beans traded 293 thousand and wheat traded 209 thousand contracts. While farmer selling slows during these drops in the market, continue to watch input costs and make big-picture plans for the coming crop year. As always, give us a call if we can help!

Have a great day!

Grain Exchange 2-20-20

Grain exchange update with Kasey Baker

Another beautiful day in the countryside today, hopefully the temperature starts rising as well.

The markets have been staying pretty range bound for several days or what seems like weeks, staying between 2-5 cent of open prices. Except for wheat which has seen some crazy ups and downs.

Corn has heard some positive news. Brazil is behind on their second crop corn planting. However, the export demand has been lacking by about 8 million bushels according to the USDA expectations. Reuters is putting 2020 corn planting at 93.6 million acres. See chart below for the USDA estimated corn 2020 average price. FSA also released that the 2019 prevent plant was at 11,433,459 on corn in 2019 across the US.

Beans in Brazil are also behind on harvesting by almost 15%. Brazil seems to be out of old crop beans so they are needing to push through harvest as quickly as possible. Domestic usage on beans has been very strong with crushing demands higher than expected. Prevent plant 32,902 acres on beans nationwide as released by the FSA.  2020 planted bean acres estimated at 84.6 million bushels which according to the chart below will result in a rise of bean average price.

Just a reminder, we will be having our Winter Producer Meetings next week. It’s not too late to sign up. On the grain side we will be discussing marketing plans, marketing contract options, and having a guest speaker for a brief market outlook.

Have a safe day!

Grain Exchange 2-18-20

Going into the markets three-day weekend the corn market continued its 3.76-3.85 range with funds short 72k contracts of con vs 56k the week prior.  Technically the corn complex had appeared to be over sold and wanting to build back up in the range but have seemed to be stuck in this area for the month of Feb still trading below the 20-day moving average.  The optimists among us want to point out that the fear of a slowing China or even World economy could subside with Coronavirus announcements slowing in China while they also approve imports of live poultry from the US for the first time since 2015.  With Phase 1 going into effect the market is on the cusp of understanding what we are in for going forward.   Will China honor their purchase intentions?  China says, yes but had just purchased Ukraine corn.

As we move to beans there also seems to be some sense of optimism as price is moving above the 20-day moving average suggesting we will continue to bounce off the bottom of the range.   South America has not been a source of bullish support as crop conditions are not alarming and the currency dynamics push both corn and beans into the World market.   Managed money was a net seller of all 3 portions of the soybean complex last week, but cash bean markets are firming, and spreads are starting to firm up which is supportive of futures.

It is that time of year when we are all working on marketing plans.  How do we sell this crop we have not yet planted but fully intend too?  One thing we are being told is, do not count on additional “Trump Bucks” for next year.  With that information and looking at the economics of grain farming next year things do not look easy.   Corn might be attractive as opposed to beans, but both will take some strict and careful management to make things work and that is why planning this time of year is so important.

Josh Grunnet
608-819-3215
Josh.Grunnet@landmark.coop

 

Grain Exchange

Grain prices rebounded from small overnight losses Tuesday night to close moderately higher Wednesday, as trade and export optimism triggered some technical buying yesterday. Corn and soybeans moved around 0.7% higher, with some wheat contracts climbing as much as 1%. Traders have their fingers crossed for another round of solid export sales data from USDA first thing this morning.

Next Thursday the 20th, the USDA Ag Outlook Forum will put a variety of updated numbers that will include forecasted impacts from Phase 1 execution and CV.  The markets are oversold and without more shocks from China on CV, next week has the potential to return to some solid footing.

And USDA’s 10.7% reduction in U.S. ending soybean stocks from last month should not be taken lightly, argues Duane Lowry, senior risk manager with Silver Creek Commodities. “I ponder the likelihood that we will see further notable cuts in U.S. soybean ending stocks as the marketing year unfolds,” he writes in the latest Ag Marketing IQ blog.

Coronavirus is now being named COVID-19.  There are over 44,000 cases in China with over 1,100 deaths.  The rate of new cases is slowing in China, but is just starting in other countries, according to the head of the WHO response team.  He also said a vaccine could be ready in 18 months.

The severe economic problems in Brazil and Argentina are forcing their new leadership to address their mountain of government debt and sagging economies.  The new taxes that were levied against Ag exports was the start and now they are cutting interest rates to help stimulate some new growth.  Cutting interest rates has tanked both the Real and Peso and they now sit at their lowest levels against the Dollar in over a decade.

As Tuesday’s report results were within estimates and offered nothing surprising, the trade now looks forward to the February 15th Phase 1 installment date to see if China makes a large-scale move to drop additional tariffs and approve import licenses for sizable purchases of US food products.

Stay warm and be safe today,

Jim Fleming

Grain Exchange

Grain exchange update with Judy Uhlenhake

Will we see any surprises in the USDA February WASDE report due at 11:00 am? Markets are all trading even to slightly lower this morning ahead of the report. China Phase one and coronavirus continue in the headlines pressuring grain. USDA does not plan on adjusting exports for projections of Phase One.

March corn continues to trade in 3.79 to 3.85 range. Exports have shown some strength as demand out of the Gulf has intensified recently. Currently exports are 42% behind last year. Corn production number is not expected to be adjusted until the Northern Plains and Lake States are resurveyed, at the earliest in the March report.

Soybeans are hit the hardest on the coronavirus news. South America is currently harvesting and supplying the global stocks. There just isn’t any news to spark a rally in soybeans.

Wheat has been trying to get a handle on global supplies. Russia enacted an export quota which will continue to tighten stocks. Australia has received some rainfall, time will tell if it’s enough to replenish soil moisture following a three year drought.

Spring crop insurance price is currently being tracked. Right now 2020 price is tracking at lowest level in 10 years excluding 2016. With that being said it is looking more attractive to plant more corn than soybeans. With the current carryout, exports lagging and increase in acres December corn price will see some pressure. Now might be the time to get some new crop sold when the board trades at $4.00 or above.

This is a good time to have a marketing plan in place to lock in prices when they trade at a profitable level. Reach out to your Grain Marketing specialist to get offers in place to capture any upside swings in the market.

We will have our Grain Producer meetings February 24 and 25th. We will discuss Market outlook and creating a plan for your crop. Hope you can make it!

With the quality of this year’s crop please keep safety in mind when working around your bins. If you have problems with the grain bridging please take the time to approach the situation in a safe manner. Twenty seconds is roughly how log it takes for a grown man to become entrapped in a grain bin. Instead take twenty seconds to make the right choice and stay alive.

Contact your Grain Marketing specialist for all your grain marketing needs. We are here for you.

Have a great day.

Judy Uhlenhake
262-767-2028
Judy.Uhlenhake@landmark.coop

Grain Exchange

Good morning,

Markets calmed and finished mixed yesterday after a quiet day of news about the coronavirus and mostly higher world equity markets.  Solid progress appears to be being made on containment and treatment in China to help soothe the nerves of an exhausted trade.  Today’s export report could be a good spark if numbers continue last week’s strength.

Some things you cannot make up.  Not only do we have global concerns of the coronavirus but a plague of locusts (seriously) is moving across northern Africa and expected to triple in size before reaching India in a few years. Lord have mercy, what’s next!

Corn prices tilted lower yesterday on a round of technical selling that pared some gains picked up earlier this week. Expectations for another bullish round of export data from USDA limited losses yesterday, but longer-term demand concerns still linger. March and May futures each spilled 1.5 cents lower to close at $3.80 and $3.86. Ethanol production for the week ending January 31 jumped moderately higher, reaching a daily average of 1.081 million barrels, the highest output in three weeks.

Soybean prices finished a choppy session yesterday with fractional gains on cautious optimism that Chinese purchases will pick up, although expectations for a lackluster round of export sales data from USDA expected this morning kept gains to a minimum.

One of our most popular contracts “The Average Grain Pricing Program” is now being offered. I use these for both corn and beans in almost all my marketing plans. They have done very well the last few years that we have offered them. We have designed it to get an average price established during the seasonal trend for higher prices. This is for new crop only and runs March 16 through July 10th. Contact your grain marketing specialist for more details.

Have a great day,

Jim Fleming

Grain Exchange

Markets are positive this morning! Corn is currently up about 3, beans and wheat up 7 cents. December 2020 corn and November 2020 soybeans have the floor this month with insurance pricing period. Make sure to put offers in and be making sales with rallies.

Corn is seeing steady prices. USDA starting the final round of trade war payments at end of next week. Ethanol margins continue in the red but are stabilizing.

Soybeans may have been driven a little too low with the outbreak of the coronavirus. With beans moving so fast,  it is important to be working offers and knowing break evens. Weather is favorable for Argentina but not for Northern Brazil for early harvest.

Start doing your marketing plans to give the most amount of time to get your offers hit. We have many options and can diversify your contract options. Never to early to plan for 2021 crops.

Mark your calendars for our producer meetings on February 24 and 25th. We have lunch and dinner meetings in four different places. Please speak to your agronomist or grain specialist to RSVP.

 

Grain Exchange

Last week’s trade agreements, including signing of Phase 1 with China and the USCMA (NAFTA 2.0) are positive news in the Ag front. So why are markets lower? China has agreed to purchase substantial amounts of Ag products, but purchases are based on market conditions. No significant crop issues in South America and a cheap Brazilian real (10 year lows to USDA) will likely impact market conditions. The US dollar while trading in low 96s at year-end have rebounded to mid 97s.

Another new developing fear is that China’s new mystery virus will impact global economics. Impeachment trial for Trump in Senate is also taking the stage.

US soybean exports are 9.7% below USDA estimates and 20.9% lower than the 5-year average and are 25% better than last year. US corn exports trail USDA estimates by 16% and are 38.1% below the 5-year average and are 50% below last year.

Weekly weather events here in the US have most areas in ample to excess moisture. After a brief cold spell, forecasts are for temperatures to return to above normal later this week.

Thank you for your business!

Grain Exchange

Once again, the market is disappointed.  All of the excitement leading up to the signing of Phase 1 China agreement yesterday seems to be a letdown for the market.  The traders are skeptical that China will follow through with the agreement.  The markets tumbled after the signing with soybeans down 13 cents and trading 5 cents lower today.  The signing of the trade deal is a step in the right direction for U.S. – China trade relations, but wasn’t enough to make a positive impact on the market.  The Chinese said that they will purchase U.S. goods on their needs and market conditions.  This one line is causing the traders to use caution on what to expect for sales to China.  Most of their tariffs remain in place, but can be adjusted on a need be basis.

Corn is also trading lower after the signing.  The export report that came out this morning was really strong for corn, but not enough to overcome the downward slide.  December corn futures continue to trade near the $4.00 level.  This could be a place to start making sales with big acres forecasted for corn.  The USDA requested the Higher Blends Infrastructure Incentive Program.  It seeks to gain input to “expand domestic ethanol availability” and opportunities to consider infrastructure projects to facilitate increased sales of higher biofuel blends”.  Maybe ethanol can get the market excited.

Wheat is lower this morning following the Phase 1 let down.  The market should find support with weekly US export sales over 23 mln bu which is larger than expected.  Global demand for wheat remains strong.

The U.S. Senate is expected to approve the USMCA trade deal today with bipartisan support.

The vagueness of Phase 1 has set the market back.  The market will be watching what exactly China buys, so uncertainty in the markets will continue.  Even as the market is reacting negatively at the moment we are in a better trade relationship with China.
Keep working with your Grain Marketing Specialist and get you Marketing Plans in order and offers in.  We are here for all your marketing needs.

Have a great day!

Go Pack Go!

Grain Exchange

 

The major theme from last Friday’s report is that the trade ignored the US corn yield increase and larger ending stocks for a couple of reasons.  The first is that the USDA stated that a re-survey of the slowest harvest states will be done but gave no indication when those results will be released.  The second was that the demand numbers did not include any projections from the Phase 1 trade agreement. The trade decided the demand numbers were too incomplete (particularly for corn) to be relevant. Wednesday will see the next big event with the signing and full disclosure of the Phase 1 trade deal and potential Chinese purchases.

 

Corn prices moved nearly 1% higher Monday despite a tepid round of export inspection data, fueled by some technical buying and short covering. March futures rose 3.75 cents to $3.89, with May futures adding 3.5 cents to $3.96.

 

Soybean prices lost about 0.5% Monday on some technical selling partly spurred by yield-boosting weather forecasts in South America. Lingering concerns over U.S.-China trade contributed additional headwinds. January futures dropped 5.75 cents to $9.29, with March futures down 3.75 cents to $9.42.

 

Wheat prices took a moderate spill Monday on a round of technical selling and profit-taking, although a decent round of export inspection data from USDA yesterday morning kept losses somewhat in check. March Chicago SRW futures dropped 2.25 cents to $5.62.

 

U.S. Treasury Secretary Steven Mnuchin assured America Sunday that the original commitments the Chinese agreed to in the Phase 1 trade deal would be upheld as the revisions to the agreement are being finalized. China agreed to purchases $40-$50 billion worth of U.S. agricultural products over the next two years and is expected to sign a formal agreement on Wednesday in spite of their refusal to change import quotas on grain last week.

 

Your Grain Marketing Specialists at Landmark have begun putting together grain marketing plans for this year for some of you already. The first step in marketing is to know your break evens! Your Landmark agronomist should be able to assist you in putting together the numbers you need to be successful and confident in your marketing plan. We have lots of marketing options to cater to your specific operation and needs for cash flow. Give us a call!