Grains Futures Prices
- Grains Report 11/14/19
DJ CBOT Delivery Intentions: Totals – Nov 14 Source: CME Group Contract Quantity Next Trade Commodity Month Delivery Day Assigned Today Date [...]
- Rice Prices Lower 4th Day In A Row
- Another China Trade Snag. The Corn & Ethanol Report 11/14/19
At 6:30 A.M. we had the FED Quarles Speech and we have Jobless Claims and PPI at 7:30 A.M., FED Clarida and FED Evans Speech [...]
Futures Market News and Commentary
Nearby corn futures finished the day with fractional gains, touching a penny for May contracts. The EIA posted up to date ethanol production numbers for the week ending 11/8. Ethanol production averaged 1.03 million barrels per day over the week, which was another uptick in average daily production, up 16,000 barrels wk/wk. Weekly ethanol production has been rising for the last 7 weeks. While production increased, ethanol stocks decreased to 20.985 million barrels. Most of the drawe came from the Midwest region, where ethanol stocks fell by 333,000 barrels, the Gulf region’s ethanol stocks were 255,000 barrels less wk/wk while the east coast used 178,000 barrels more than their production. Strategie Grains cut their 19/20 EU maize crop estimate 100,000 MT to 63.5 MMT, despite an increase in French production.
DEC 19 Corn closed at $3.75 3/4, up 1/2 cent,
MAR 19 Corn closed at $3.84 3/4, up 3/4 cent,
MAY 20 Corn closed at $3.90 3/4, up 1 cent... Read more
Nearby wheat futures remained lower through Thursday, with Chicago SRW noticing the biggest losses of 1 1/4 to 3 cents. Kansas City HRW wheat futures closed with losses of 1 1/4 to 2 1/2 cents. MLPS had some firmness in further out contracts, but still saw losses of 2 to 2 1/2 cents in the front months. Analysts expect USDA to show 200,000-500,000 MT in US wheat export sales for the week that ended on 11/7. Rosario Grain Exchange lowered the expected Argentinean wheat production to 19 MMT. Egypt purchased a total of 465,000 MT of wheat with 120,000 MT from Ukraine and 345,000 MT from Russia for January 5-15 delivery. Dec Milling Wheat futures on the EU commodities exchange (MATIF) were firm as open interest steadily falls (down 18.65% since beginning of Nov).
DEC 19 CBOT Wheat closed at $5.07 3/4, down 1 1/4 cents,
DEC 19 KCBT Wheat closed at $4.22 1/4, down 2 1/2 cents,
DEC 19 MGEX Wheat closed at $5.12 3/4, down 2 1/2 cents
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Nov bean futures expired at $9.0025 per bushel. Nearby contracts, that are still in play, made gains of 1 to 1/2 cents. Soybean meal finished Thursday’s session with a $1.00/ton loss. Soybean oil gained 25 points on the day. The NOPA Oilseed Crush Report will be released tomorrow, and analysts are expecting the October soybean crush to be 166.8 mbu. September crush was 10 mbu below trade projections at 152.566. The USDA reported a private sale of 129,000 MT of soybeans to China for 19/20 delivery this morning. The trade is expecting USDA to show .08-1.4 MMT in soybean export bookings for the week of 11/7. Jan Soybean meal futures on the Dalian commodities exchange were up .42% on the day with 1.454 million in open interest.
NOV 19 Soybeans closed at $9.00 1/4, down 2 1/4 cents,
JAN 19 Soybeans closed at $9.16 3/4, up 1 1/2 cents,
MAR 20 Soybeans closed at $9.29 1/2, up 1 cent,
MAY 20 Soybeans closed at $9.41 1/4, up 1/2 c... Read more
How does national average basis react when the futures market breaks 15 cents and the carry in the nearby futures spread continues to strengthen? Well, judging by Monday afternoon’s calculation of the cmdty National Soybean Basis Index (NSBI, weighted national average), basis strengthens by almost a penny. While the strength itself isn’t overly surprising given the uptrend seen on the NSBI’s daily and weekly charts, the question remains as to how long soybean basis can hold on with all else about the market growing more bearish. Based on its 5-year seasonal patterns the NSBI tends to strengthen, slowly, to an average peak of about 64 3/4 cents under with the close of the fourth week of December. This ties into the roll from January futures to March, with basis working back to its next peak of 65 1/4 cents under at the close of the first week of February. The latest 2019-2020 calculation of the NSBI (Monday, November 11) came in at 68 cents under the January futures contract, above the 5-year average of 74 cents under. While this marketing year continues to run slightly stronger than the 5-year average, I still consider the NSBI to be neutral. By the time we get to early February this marketing year, the market could be facing the situation of solid production in Brazil and decreased export demand for U.S. supplies. That seems to be what the solid carry in the futures market’s forward curve is telling us. If so, the NSBI would be expected to see more of a contra-seasonal breakdown. Darin Newsom President Darin Newsom Analysis Inc.
The end of another week is upon us, with what should be an active harvest weekend (corn and soybeans) ahead. I was interested in what might happen to the cmdty National Corn Basis Index (NCBI, weighted national average) given Friday’s rally in futures and the stronger carry in Dec-to-March futures spread. The latter was tied to what looked to be a pre-weekend round of hedge pressure, again with the idea harvest could see some progress due to relatively clear weather leading to increased cash sales. Why might newly harvested bushels get sold across the scales? Two reasons: There is little carry in futures spreads and basis remains strong. Which brings me back to my first curiosity. A look at the weekly close-only chart for the NCBI shows a Friday afternoon calculation 15 cents under the December futures contract. This was roughly 3/4 cent stronger than the previous Friday calculation, a rather unimpressive move considering the 12-cent lower close (for the week) posted by Dec corn. My thought is harvest related cash selling kept a lid on the NCBI over the course of the week, setting the stage for what could be an important week when markets fire up again Sunday evening. If commercial selling intensifies, it could be felt in both futures spreads and basis. However, if cash selling isn’t as heavy as expected over the weekend it isn’t out of the question that next week brings renewed commercial buying interest due to the continued tightening of supplies. Darin Newsom President Darin Newsom Analysis Inc.
Over the last few weeks in this space I’ve talked a number of times about spring wheat basis. This time, I want to return back to my roots (recall I grew up on a small farm in southwest Kansas) with another look at hard red winter (HRW) wheat basis. If you remember from our last discussion on the cmdty HRW Wheat Basis Index (HWBI, weighted national average) the largest wheat crop the U.S. produces each year was showing a similar divergence between fundamental reads as many other markets in 2019 (“Divergence” from October 12). However, the difference between national average basis and futures spreads has been dissolving of late, leaving the U.S. HRW market with a clear bullish view of supply and demand. Yes, you read that correctly, bullish. The carry in the December-to-March futures spread has been cut to about 9 cents, covering roughly 32% of calculated full commercial carry (insert my simple 1/3-1/3-1/3 measuring technique here, with 33% or less considered bullish). Meanwhile, the HWBI has recently strengthened to 31 cents under (Dec futures) on its weekly close-only chart (week of October 28), before weakening a couple cents this week. Still, 2019-2020 basis is running stronger than what has been seen over the previous 5 marketing years with the high for this week of November sitting at about 41 cents under. With both fundamental reads now bullish, it indicates that at least short-term supply and demand continues to provide support to the market. Darin Newsom President Darin Newsom Analysis Inc.