Grains Futures Prices
- ONE44 Wheat update
Our long term target remains 731.00
- Daily Grain Market Commentary (3.2.21)
Grain markets are under pressure to start the month, will it continue?
- Corn Tuesday Forecast
The downtrend may be expected to continue, while market is trading below resistance level 540, which will be followed by reaching support level 524
Futures Market News and Commentary
Back and forth action in the domestic wheat markets continues, with double digit losses at midday. CBT wheat futures are near $6.52 for May and $6.41 for Sept with 10 to 13 3/4 cent losses. KC wheat futures are down 11 cents so far, May near $6.23 and Sept at $6.34/bu. Spring wheat prices are down 5 1/4 to 6 1/2 cents so far. There were zero delivery notices vs. Chicago and KC wheat overnight, as the stoppers kept all of those KC receipts.
NOAA’s 5 day QPF shows rain development along the southern border of KS into OK, with accumulated precip topping at 1 1/2”. The U.S. drought monitor index still has D0-D3 conditions for NW KS and the TX Panhandle.
The EU’s accumulated wheat exports were to 17.56 MMT, down 18.2% from last season’s pace. Algeria issued an international wheat tender for 50k MT. Pakistan is tendering for 300,000 MT of optional origin wheat. Philippines are tendering for 145,000 MT of wheat. Japan bought 82,937 MT of wheat from U.S. and Canada in the weekl... Read more
Front month corn futures are trading 9 1/2 to 10 cents lower. There were no delivery notices against March corn futures overnight, and there are no warehouse receipts currently registered for delivery. March is near $5.50 3/4 for midday, and May is near $5.34 3/4. New crop trading has the board 3 to 4 3/4 cents lower with Sept a 15 1/2 cent premium to Dec.
Ethanol production didn’t fully recover in the week ending 2/26, as EIA data showed 849k barrels were produced per day – midway between 659k LW and 911k before the cold snap. Continued weak production drew ethanol stocks even lower on the week to 22.425m barrels down an additional 360k.
--- provided by Brugler Marketing & Management
Corn Prices by Barchart
Soybean futures are down 8 1/4 to 12 3/4 cents at midday, with May near $14.02. There were no delivery notices against March soybeans overnight. There are 149 warehouse receipts registered for delivery. May Dalian Soybean Futures posted a new contract high of 6,096 yuan/MT (~ $25.70/bu). New crop U.S. soybean futures are also weaker with losses limited to 9 cents so far. The new crop soy/corn ratio at 2.582:1 still favors expanded soybean acres.
Soymeal prices are trading $4.90 to $5.10/ton in the red, and soy oil prices are down 7 to 11 points at midday. Canadian canola futures are back above CAD $600/MT after three days of recovery. The front month record high is still $617.50 from 2/24.
--- provided by Brugler Marketing & Management
Soymeal Prices by Barchart
Soy Oil Prices by Barchart
Canadian Canola Prices by Barchart
The recent move by the cmdty National Hard Red Winter (HRW) Wheat Basis Index (HWBI, weighted national average) has been impressive, looking like a big swinging hook as it rockets higher. Back on February 25 the HWBI was calculated at 32.04 cents under March futures, holding at or near this level through February 10. From there, though, the HWBI has rallied dramatically, calculated at 38.35 cents under on Thursday, February 25. On the other hand, with first notice day against the March Kansas City futures contract scheduled for Friday, the March-May futures spread has seen its carry strengthen from 3.25 cents on February 1 to Thursday’s close of 8.25 cents carry. Using the Cost of Carry table on my cmdtyView system, this had the spread covering roughly 64% calculated full commercial carry, just outside the bearish territory or 67% or more. If you are thinking something doesn’t add up, you are correct. These (basis and futures spreads) are the two key reads on real fundamentals and they usually move in the same direction. However, as of Thursday afternoon they are definitely diverging like the two roads in the woods of Frost’s poem. Which should we follow? For now, it might be best to sit down and wait a couple days before deciding, letting the situation settle down as the index rolls from March futures to the May contract. At that point, though, we no longer have a futures spread to work with because the May-July is an old-crop/new-crop hybrid, dealing with two different sets of fundamentals. Darin Newsom President Darin Newsom Analysis Inc.
I’m fairly sure that sometime during this bullish run by the cmdty National Soybean Basis Index (NSBI, weighted national average), I titled one of these pieces “Into Thin Air”. Given that assumption, I’m calling this one “Into Thinner Air” based on Wednesday’s calculation of the NSBI at 38.83 cents under March futures. Not only was this nearly a full penny stronger than Tuesday’s calculation of 39.75 cents under, but it was also the strongest the NSBI has been in relation to nearby futures since the July 24, 2020 calculation of 38.40 cents under. Note that peak was just as the NSBI was set to roll from the lightly traded August contract to the even lighter traded September issue, making this rally against one of the key contracts (March) more meaningful. What is this continued rally telling us? First and foremost, available supplies remain incredibly tight. I’ll be posting my end of the month stocks-to-use calculation based on the cmdty National Soybean Price Index (NSPI, weighted national average cash price) over the weekend, with my expectation for it to tighten from last month’s 0.9%. Yes, you read that correctly, my calculation of stocks-to-use based on the NSPI was less than 1%, with the next tightest marketing year the final 0.5% from 2007-2008. Given the strong uptrend in futures and basis, it isn’t out of the question 2020-2021 could challenge the benchmark 0.1% from 2013-2014 when USDA finally conceded by dropping its September 1 stocks number below 100 mb for the first time. As always, I’m not concerned about any stocks number, but the stocks-to-use story is growing more interesting each month. Darin Newsom President Darin Newsom Analysis Inc.
As I’ve been talking about on my website today, this week is going to be an interesting one for the various cmdty National Basis Indexes (weighted national averages) given delivery against the March futures contracts starts at the end of the month. Each of the five major indexes will have their turn in the spotlight, though for now the lights burn brightest on corn and soybeans. With that in mind, I want to take a look at the cmdty National Corn Basis Index (NCBI) following Monday’s calculation of 20.18 cents under March futures. This was 0.21 cent stronger than last Friday’s calculation of 20.39 cents under, extending the uptrend from the recent low of 21.53 cents under from February 5.Much of the recent strength of the NCBI of late could be attributed to the arctic blanket that had settled across the United States, with the idea few were particularly interested in firing up the machinery needed to haul bushels to town. This theory could be tested as temperatures make a dramatic turn to the warmer side as we close out February and turn the calendar page to March. However, the next obstacle could be mud, particularly in areas that have received some of the large snows since late January. We also have to keep in mind feed demand could stay stronger, longer than expected following the February 1 Cattle on Feed report that showed the second largest number on feed as of Feb. 1 (12.1 million head) due to a much larger than expected January placement number of 2.02 mh. Darin Newsom President Darin Newsom Analysis Inc.