Grains Futures Prices
- CORN, COPPER, CATTLE
let's talk trend reversal point, an over bought Copper market and possible trading opportunities.
- Last Trading Day July Grains. The Corn & Ethanol Report 07/14/2020
We started the day off with NFIB Business Optimism Index (Jun) at 5:00 A.M. coming in at 1.006 versus the previous 94.4 and a forecast [...]
- Buy The Dip?
Buy the dip in the grain markets?
Futures Market News and Commentary
Soybean trading at midday on Turnaround Tuesday has futures 4 to 7 1/2 cents higher. Soymeal futures are rebounding by $1.30 to $2.20/ton. Soybean oil futures are 38 to 43 points higher so far. Private exporters reported a sale of 129k MT of new crop beans to China. NASS Bean conditions ratings were 68% good/ex, which is down 3 percentage points from last week. On the Brugler500, conditions were down 6 points to 373. The “I” states’ beans all deteriorated on the Brugler500 index (IL -9, IN -3, and IA -4). USDA’s Ag Attaché lowered their 2019/20 Brazilian bean production estimate by 500k MT to 123 MMT. Harvest had finished in June. NMY beans were marked at 130 MMT, compared to the official 131 MMT from the July WASDE. China imported 11.2 MMT of soybeans in June, that is up 1.8 MMT mo/mo and up 4.7 MMT yr/yr.
Jul 20 Soybeans are at $8.76 1/2, unch,
Aug 20 Soybeans are at $8.81 1/2, up 7 1/2 cents,
Sep 20 Soybeans are at $8.78 1/4, up 6 3/4 cen... Read more
Turnaround Tuesday trading has front month wheat futures in the green so far. SRW wheat is up the most at midday with gains of 3 3/4 to 6 1/4 cents. HRW wheat is trading UNCH to 1 1/2 higher. MPLS spring wheat futures are 1 to 3 1/2 cents higher so far. Winter wheat harvest is 68% complete nationally, but finished in AR, TX, and OK. KS wheat harvest still had 5% to go as of the 12th. Spring wheat conditions scored a 369 on the Brugler500 index, that was down 5 points wk/wk led by SD (which dropped 18 points to 351). Austrian planted area is down 0.3% yr/yr, but due to drought impacted yields crop production is estimated to drop 6% yr/yr. Specifically, USDA’s Ag Attaché estimates a 5.35 MT/HA (~79.5 bu/acre) yield for soft wheat in the EU nation. That is down 2% from the 5-yr average and 8.5% lower yr/yr with only a 0.9% cut to planted area. Egypt purchased 114k MT of Russian wheat in an international tender.
Sep 20 CBOT Wheat is at $5.31, up 6 1/4 cents,... Read more
Corn is trying to recover some of yesterday’s drops, trading fractionally to a penny higher in the front months. July futures are down by 9 1/4 cents on the last round of trading. NOAA’s 7-day accumulated precip forecast shows a band of 0.5 to 2.5” from WI through northern MO, topping out at 3” in spots. USDA’s mandatory reporting system reported the 4th largest single day corn sale announcement of all time; 1.762 MMT (>69 million bushels) to China. Delivery for the large export sale is the 2020/21 marketing year. Corn conditions were a 376 on the Brugler500 index, dropping 5 points wk/wk. USDA’s Ag Attaché left their production estimate for Brazil’s 19/20 corn production at 100 MMT (1 MMT below official) citing continued dryness afflicted yields. The Ag Attaché foresees an average yield of 5.42 MT/HA (~80.6 bu/acre) compared to USDA’s 5.49 (81.6). For 2020/21, Ag Attaché sees Brazilian corn production 4 MMT below the official at 103 MMT. South Korea issued an international tender f... Read more
If I were to tell you the more active futures contract rallied 42 cents last week, while the underlying cash commodity was halfway through its latest harvest, the assumption would be basis took a beating on its weekly chart. Well, we need to remember what Coach Buttermaker famously told the Bad News Bears about assume, for the market I’m talking about is soft red winter (SRW) wheat, and national average basis took anything but a beating last week. Friday afternoon saw the cmdty National SRW National Basis Index (SRBI, weighted national average) calculated at roughly 13 3/4 cents under September Chicago futures, up about 1/2 cent for the day and roughly 2 cents stronger (yes, 2 whole cents) for the week. Fundamentally there certainly seems to be something brewing in the SRW wheat market given the explosion in basis and the action in futures spreads. The July (in delivery)-September spread rocketed to an inverse of 1 3/4 cents while the September-December spread saw its carry trimmed to 5 cents, covering roughly 28% of calculated full commercial carry. Recall from previous discussions I consider 33% or less bullish, with an inverted spread reflecting an extremely bullish supply and demand situation. There has been a great deal of talk recently about production decreases in Russia, Ukraine, and Argentina. While USDA did not acknowledge this situation in its most recent WASDE report (released last Friday), futures spreads and the SRBI indicate the concern is real. This could work in the favor of U.S. wheat producers as they head down the homestretch of the 2020 harvest over the coming weeks. Darin Newsom President Darin Newsom Analysis Inc.
Those of you paying attention to USDA July round of Supply and Demand reports likely noticed some of the oddities in the soybean numbers. First and foremost, USDA upped its 2019-2020 ending stocks guess to 620 mb, an increase of 35 mb from June, but still well short of what my analysis of the marketing year daily average for the cmdty National Soybean Price Index (NSPI, weighted national average cash price) is indicating. Let’s just say USDA’s latest guess, combined with its estimate of old-crop demand of 3.857 bb put ending stocks-to-use at 16.1%. Using the daily average price for the NSPI through the end of June puts my calculation of ending stocks-to-use at 33.5%. Okay, so maybe my analysis hyper-bearish conclusion is way out there but consider this. Based on USDA’s own Quarterly Stocks number from June 30 (stocks on hand as of June 1) of 1.386 bb, applying average Q4 demand brings 2019-2020 ending stocks in at about 810 mb. Additionally, I had to laugh at USDA dropping its residual use demand category by 50 mb, to (-46 mb), to make its July adjustment. Never mind that exports are still projected to come up at least 100 mb short of USDA’s standing demand guess of 1.65 bb, with last Thursday’s weekly update (for the week ending July 2) showed total export shipments just short of 1.4 bb with only 8 reporting weeks remaining. That seems to be a lot to ask, particularly with national average basis not indicating demand is skyrocketing this late in the marketing year. Darin Newsom President Darin Newsom Analysis Inc.
This week I’ve had the opportunity to visit with a number of producers from across the U.S. Southern Plains and Midwest, with the most popular topic being that of corn basis. The most amusing, if one wants to use that word, were the stories (yes, more than one) of long, harvest-like lines filled with trucks moving last year’s crop ahead of this year’s harvest. Yes, this often happens in late July and early August, but everything is running ahead of schedule when it comes to corn this year. Despite the early pre-harvest rush, national average basis continues to hold firm with the cmdty National Corn Basis Index calculated at 24 3/4 cents under September futures Thursday afternoon. This was fractionally stronger than Wednesday’s calculation, and 1/4 cent stronger that the previous Thursday’s figure, indicating next week’s export inspections (Monday) and shipments (Thursday) could be firm once again. Speaking of exports, a producer from southwest Kansas told me how an ethanol plant in his area had a stronger basis bid for milo (grain sorghum) than corn, due in large part to the strength of the U.S. export program to China this marketing year. In the latest weekly government update, U.S. milo exports were 132.4 mb, almost 2.5 times greater than last year’s 54.9 mb for the same week. By percentage, this makes U.S. milo the most improved year-to-year exported grain. It will be interesting to see how long this torrid pace continues, with the 2020 harvest approaching. By percentage, milo continues to be the marketing year-to-marketing year leader in percent gain in the export shipment game. Darin Newsom President Darin Newsom Analysis Inc.