Grains Futures Prices
- Harvest Moon or Hunters Moon. The Corn & Ethanol Report 08/23/19
We kickoff the day with New Home Sales at 9:00 A.M. and Cattle On Feed at 2:00 P.M. The Pro Farmer Tour continues to trump [...]
- Morning Grain Market Research
A couple of baby steps forward, and one big adult step backward would seem to be a reasonably accurate description of the action in the grain and soy markets...
- How Low Are Soybean Prices Going ?
Futures Market News and Commentary
Soybeans futures finished Friday’s trade session 10 1/4 to 12 3/4 cents lower. Meal futures were down $3.80/ton, with soy oil down 20 points. China announced a 5% increase to the tariffs on US soybeans, taking them to 30% starting on Sept. 1. President Trump responded to the tariff increase by adding 5% to tariffs on the $250 billion already in place to 30% on Oct 1 and taking the tariffs on $300 of Chinese goods from 10% to 15% on Sept 1. The Pro Farmer Midwest Crop Tour final report estimated total soybean production at 3.497 bbu on an average yield of 46.1 bpa. Soybean speculators increased their net short positions by 5,982 contracts to 72,432 contracts on August 20. SEP 19 Soybeans closed at $8.43 1/4, down 12 3/4 cents, NOV 19 Soybeans closed at $8.56 1/2, down 12 1/4 cents, JAN 19 Soybeans closed at $8.71 1/4, down 11 1/4 cents, MAR 20 Soybeans closed at $8.85 1/4, down 10 1/4 cents, SEP 19 Soybean Meal closed at $289.90, down $3.80, SEP 19 Soybean Oil closed at $28.34, down $0.20 --- provided by Brugler Marketing & Management
Wheat futures were mixed across the three markets Friday, with MPLS up 1/4 cents, KC was down by 1 3/4 cents, with CBT higher by 8 cents. Managed money in CBOT flipped their net position to short 1,249 contracts as of 8/20 a move of 5,337 contracts. They were also short a net 36,956 contracts in KC wheat futures and options on that date. In MPLS wheat they were at another record net short of 20,338 contracts. Thursday’s Export Sales report showed YTD accumulated shipments at 20% of the USDA full year projection, vs. the average at 21% and 17% last year. Unshipped sales are lagging behind the average, as total commitments are 39% of that projection with the average of 45% and last year’s 35%. SEP 19 CBOT Wheat closed at $4.75 1/4, up 8 cents, SEP 19 KCBT Wheat closed at $3.91 1/2, down 1 3/4 cents, SEP 19 MGEX Wheat closed at $4.98 3/4, up 1/4 cent --- provided by Brugler Marketing & Management
Corn futures were cents 2 1/4 to 3 1/2 cents lower at Friday’s close. The Pro Farmer Midwest Crop Tour reported a projected a total corn yield of 163.3 bpa, with production at 13.358 bbu on 81.8 million harvested acres. For the week speculators in corn futures and options bailed on the net long position by 100,954 contracts to a net short position of 56,441 contracts on Tuesday. China announces an additional 10% tariff on US corn and sorghum as of Dec 15. While China has not been a large importer of corn recently, the loss of potential ethanol, DDGs and sorghum buying is being felt. China on Friday threatened to raise tariffs another 10% on US wheat, corn and sorghum effective December 15. SEP 19 Corn closed at $3.59 3/4, down 3 1/2 cents, DEC 19 Corn closed at $3.67 3/4, down 3 1/4 cents, MAR 20 Corn closed at $3.80, down 3 cents MAY 20 Corn closed at $3.88 1/2, down 2 1/4 cents -- provided by Brugler Marketing & Management
Once again, I waited for the dust to settle from Friday’s soybean market pounding to look at what happened to national average basis. What I found continues to amaze, if we believe everything else we think we know about soybeans. First, the cmdty National Soybean Price Index (NSPI, weighted national average cash price) was calculated at $7.78, down 12 1/4 cents for the day. This was in line with the loss seen in the November futures (SX9) contract, posting a close of $8.56 1/2. Using the formula of NSPI – SX9 to calculate basis (as opposed to the cmdty National Soybean Basis Index, and most other basis indexes, formula of NSPI – the nearby September contract) showed national average basis to be 78 1/2 cents under. A year ago this same week saw this formula calculate national average basis at 91 1/4 cents under. A year-to-year 13-cent improvement in national average basis DESPITE old-crop ending stocks expected to climb to near 1.1 bb (the previous year was 438 mb), an escalating trade war with China that has thrown all new-crop demand calculations out the window, and a historic correlation study that show the NSPI should be priced roughly $1.50 lower than Friday’s calculation. Yet here we are with continued strong basis. Two options seem clear to me going forward: Either we find out the U.S. does not have the amount of soybeans on hand USDA has been telling us, or the hammer falls on futures, basis, and cash as we move into harvest. Stay tuned. Darin Newsom President Darin Newsom Analysis Inc.
Yes, it’s that time of year again when everyone across the U.S. Midwest studies the CFB Rankings. Of course I’m talking about Corn Fall Basis. What did you think I meant? College football? Nah, I pay about as much attention to that industry as I do USDA reports. Also, yes, I know it is late summer and not technically fall, but with the cmdtyExchange Roadshow set to take place next week I wanted to look at some of the key growing states we will pass through. As far as corn production is concerned, the top three states are (in order) Iowa, Illinois, and Nebraska. Interestingly enough this coming week the Roadshow takes us to Fort Dodge, Iowa (Monday), Decatur, Illinois (Thursday), and Lincoln, Nebraska (Tuesday), as well as Columbia, Missouri (Wednesday) and Marion, Ohio (Friday). For this discussion, though, I want to look at the top three and compare some cmdty Regional Basis Indexes. It’s interesting to note that north-central Iowa trends relatively well with the national basis index with the latest calculation showing NC Iowa at 8 1/2 cents under while the national index came in at 9 cents under. Meanwhile, central Illinois is up at a lofty 5 3/4 cents over with southeast Nebraska sitting at 14 3/4 cents under. This also hints at where the corn is expected to be this coming harvest, with Nebraska likely to still see a good crop (except for the worst of the flood area), north-central Iowa a decent crop as well, and central Illinois could struggle to produce. Go further east (e.g. Indiana and Ohio) and the situation gets even worse as we wait for combines to eventually start rolling. Darin Newsom President Darin Newsom Analysis Inc.
A friend of mine from northwest Minnesota recently posted a comment on Twitter saying he had received a letter from his local USDA/FSA office. In it, local producers were informed that they could be facing a Loan Deficiency Payment (LDP) situation on spring wheat this year. What is LDP? If the average county price drops below the government loan rate, a payment can be made to the producer (or owner of the cash grain) upon the sale of the cash commodity. In other words, it’s a way of putting a floor (government loan price) in the market, and yes, folks can try to maximize payments through marketing. More on that at a later date. His area of Minnesota has a government loan rate for spring wheat of $4.09 (per bushel). As of this writing, in late August with September contracts set to move into delivery, the Minneapolis HRS wheat September contract is priced near $5.05. Meanwhile, the cmdty Regional Basis Index for northwest Minnesota (MNBAMN10.CM) was calculated at about 72 cents under Monday afternoon. This put the average cash price for the region near $4.33, only 24 cents above loan price. Furthermore, in its latest Crop Progress report, NASS guessed Minnesota’s HRS wheat harvest to be only 14% completed as of Sunday, August 18, meaning there is a lot more wheat to come in and more room to the downside for prices. Is sub-loan possible? Absolutely, with both futures and basis weakening as we speak. Darin Newsom President Darin Newsom Analysis Inc.