CBOT weekly outlook: South American weather still key for soy, corn

CNS Canada — South American weather uncertainty is lending underlying support to soybean and corn futures at the Chicago Board of Trade, with speculators likely to remain on the long side until production issues are more clearly sorted out, according to an analyst.

“The funds don’t want to give up the ship, and there’s enough of a weather concern in there for them to stay long and bid up,” said Sean Lusk of Walsh Trading in Chicago on the buying interest in soybeans and corn. Read more

Grain Marketing

CBOT weekly outlook: Soy, corn watch South American weather

CNS Canada — Soybean futures at the Chicago Board of Trade moved lower during the week ended Wednesday, while corn held steady, with South American weather conditions expected to provide much of the direction going forward.

“We’re pretty much trading one weather report at a time,” said Sean Lusk, director of commercial hedging with Walsh Trading in Chicago.

While dryness concerns in Argentina provided some support for soybeans in recent sessions, forecasts are improving in the major export nation. Early crop projections out of Brazil also remain large overall. Read more


Why every bushel of corn matters for U.S. balance sheet

Source: Reuters – Karen Braun (Karen Braun is a Reuters market analyst. Views expressed are her own.)

The United States will certainly harvest a huge corn crop in 2016, so it hardly matters if yield falls by a couple of bushels, right? Actually, it does.

Without dissecting the balance sheet and crunching the numbers, it might be hard to understand why slight variations in yield make a big difference in domestic supply.

Last month, the U.S. Department of Agriculture projected that domestic farmers will harvest 15.15 billion bushels of corn over the next couple of months, which would easily set a new record for the world’s leading corn supplier.

USDA also penciled in 2.409 billion bushels of corn carryover at the end of the 2016/17 marketing year, which began on Sept. 1. This would be the largest such volume since the late 1980s. Read more

Grain Marketing

Why we need to pay attention to early corn planting dates

By Kevin Van Trump

Corn traders are talking about the tendency for old-crop prices to peak prior to planting in years we are deemed to be in an over-supplied environment. Meaning the JUL16 contract might now be nearing the upper end of it’s range, possibly somewhere between our current price of $3.75 and $3.90 per bushel? There’s also more talk that most commercials have satisfied their appetite for old-crop supply. Meaning the basis in many parts of the country may continue to fall under pressure in the days ahead, especially if flat-price continues to move higher. Many commercials are saying they will take old-crop bushels, but only at discounted rates as they seem content simply waiting on new-crop supply to enter the pipe-line. Make certain you are factoring this into your marketing strategy. Technically we also seem to be approaching more heavier Read more

Grain Marketing

US corn sowings ideas wane, as futures underperform

Investors appear to be trimming expectations for the growth US corn sowings this year, as a key report looms, with futures markets boost the incentive for farmers to raise plantings of rival soybeans.

Rabobank on Thursday forecast a rise of 1m-1.5m acres in US corn plantings, from the 88.4m acres seeded last year.

And separately, US-based Global Commodity Analytics, citing results of a limited farmer survey, pegged seedings at 89.4m acres.

Earlier this week, Societe Generale put corn seedings at 89.0m acres, while Informa Economics on Friady pegged area at 89.5m acres.

Although all these forecasts would see US farmers raise sowings of the grain for the first time in four years, the estimates are below the 90.0m acres at which the US Department of Agriculture pegged seedings in an initial estimate last month.

An Allendale report last week did come in with a more upbeat estimate for corn sowings, of 90.4m acres. Read more


A weather market for corn in 2016?

Nearby corn futures remain above the early January lows, but continue to struggle under the weight of a number of negative market fundamental factors. Those negative factors include both supply and demand considerations. On the supply side, domestic corn production has been large for three consecutive years and the USDA now projects 2015-16 marketing year […]


Accuracy of USDA initial ending stocks estimates

Joel Karlin, DTN Contributing Analyst

Next month the USDA will release its first balance sheets for the 2015/16 marketing year including their initial projections of ending stocks for U.S. corn and soybeans.

For reference, the USDA issues 18 WASDE reports for each marketing year starting in May and finishing in November a year later.

The first WASDE balance sheet estimates are issued when the corn and soybean crops are just getting planted so any production estimates are subject to large revisions as even planted and harvested acreage let alone yield calculations are still up in the air.

Similarly the demand projections are also estimates and even the beginning stocks figure is subject to change.

Nonetheless we were curious about how accurate the USDA forecasts are 18 months out so this graphic shows the change in U.S. corn and soybean ending stocks in million bushels from the first estimate in May to the final one 18 months later. Read more


January 2015 Market Analysis

USDA Report & Market Highlights

  • Corn Summary – When the dust cleared, slightly friendly corn report with the USDA taking 2.4 bpa/191 mbu off its yield/production estimate. C/O 121 lower at 1.877 bbu, some 63 mbu below the trade average. SON feed/residual use 190 mbu below implied trade estimate. Implied BOY feed/residual # according to the USDA is about 450 mbu ABOVE LY.
  • Soybean Summary – USDA production estimate very near the trade average; c/o holds steady at 410; WASDE more or less embraces CONAB’s bean figure (95.5 versus 95.9); world stocks to build by over 910 mbu this year if S Am production and global use estimates hold.
  • Wheat Summary – Mixed bag as Dec. 1 stocks were above expectations but new-crop winter wheat acreage was lower than expected. Dec. 1 stocks of 1.525 Bbu implied lower-than-expected feed/residual use during Sept-November, primarily HRW. No change to exports, although sales and shipments continue to lag. Carry-out for all wheat up 33 mbu, with most of that increase seen in HRW (+26 million). New-crop winter wheat seedings were light of expectations. At 29.5 million acres, HRW seedings are forecast to be down 3% or about 1.0 million acres vs. last year. The USDA also projected a 1.0 million acre decline in SRW; 7.5 vs. 8.5, or 12%. Choppy with a focus gradually shifting to new-crop prospects both here and in other Northern Hemisphere production regions (e.g. FSU and EU).

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North American Harvest Report

Too much of a good thing?

A publication of BMO Capital Markets Economic Research • Douglas Porter, CFA, Chief Economist

Seldom is there a dull moment in the agriculture business. Only two short years ago, crop prices in North America were flirting with all-time highs after several years of lacklustre growing conditions were capped by the worst U.S. drought in 25 years. Today, prices are mining new lows under the weight of a second huge harvest. But, while lower crop prices are good news for food processors, livestock producers, and consumers, they are also taking a bite out of farmers’ bottom lines.

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