Tag Archives: corn

Summary

Markets pumped the breaks on Tuesday. Outside of the NASDAQ, which put in new highs, equities dipped through out the day. Traders are torn between the positive economic data and the possibility it will turn around as states pause or reverse their reopening plan. The good news on Tuesday was the JOLTS job report showed the US had 5.4 million job openings in May. That was up from the expected 4.9 million. There is a little value buying in the US Dollar after it sold over 0.6% on Monday. At the time of this writing the dollar is up 0.26%. Emerging currencies have little changed with the move in the dollar.

Mid week energies are holding their own. WTI crude oil futures are still in the $40/barrel range. Wednesday will be the latest energy stocks and production reports for the previous weeks. This could be a good indicator of what energy demand looks like with states pausing reopening plans. Ethanol will try to add another week to it’s streak of increasing production and dropping stocks.

Just as the outside markets pumped the breaks corn and soybeans also pumped the breaks. Kyle Bumsted may have said it best, on the Tuesday Fontanelle Final Bell, grains are being driven by technicals and weather currently.  Weather continues to be hot and dry, but afternoon GFS models started to include moisture for the Eastern corn belt at the end of July. This could come at just the right time to help pollination. Still the forecast is longer range and can change in the next 6 hours. Overall the corn and soybean crop look very strong. The latest crop progress report from NASS rated the national corn crop at 71% good to excellent. That is 2% lower than the previous report, but 14% higher than a year ago. Soybeans are the best they’ve looked in early July since 1999 at 71% good to excellent. That was unchanged week to week.

USDA flash sales started the week strong with China and Mexico buying corn and soybeans. China purchased 264,000 MT of soybeans for the 2019/2020 marketing year. China purchased 202,000 MT  for the 2020/2021 marketing year. Mexico purchased 182,880 MT of corn split between the 2020/2021 & 2021/2022 marketing year. There are no flash sales being reported on Tuesday.

The latest USDA grain export inspections were delayed until early afternoon due to technical difficulties. Overall the report held few surprises. Corn exports fell below a million metric tons. That widens the deficit corn is running with the previous marketing year. Sorghum also fell sharply to just over 50,000 MT. Year to date though sorghum is running almost 3 million metric tons more than a year ago. Soybean exports were strong over 500,000 MT.

Export business for US grains has been decent in 2019/2020. US soybean export commitments are 254.8 million bushels. That is up 180% from a year ago.  South American grain exports though continue to grow rather than shrink. Brazil exported a record 505.1 million bushels in June vs. 314.1 million bushels last year. Argentinian and Brazilian FOB corn offers are $4-$15 cheaper per metric ton than US corn at the Gulf.

Livestock futures were unable to attract follow through buyers. Cattle and hogs though didn’t sell off hard. Traders are cautious to take up to short of a position ahead of Friday and the latest WASDE report. That will help shed light on the latest protein demand trends. Cash is starting to firm and even beat last week’s action in the country. That could create follow through support later this week.   As for pork traders they are expecting to see a significant increase in Chinese export business. China suspended imports from two more Brazilian meat plants on Monday. The suspension comes over corona virus concerns. Reports indicate that recent mass testing in Brazil revealed more than 1,000 positive corona virus cases at meat plants in Mato Grosso do Sul. Stone X analysts point out that the Chinese government continues to limit the sources of meat that can be imported over fears that the corona virus will be carried into the country on the meat, even though literally tens of thousands of tests of such meat in recent weeks have failed to produce a single positive test result.

Tuesday afternoon there were just a few scattered bids floating in the country. A regional did light business in Nebraska, at $157, $3 higher than last week’s weighted average.  On Monday Kansas trade was marked at $93 to $95, Nebraska also reported just a handful of trade at $160. Show lists this week are higher in Kansas, somewhat higher in Texas and lower in Colorado and Nebraska.

Expected Slaughter numbers Tuesday

Cattle

121,000 hd today 121,000 hd wk ago 119,848 hd yr ago

 

Hogs

462,000 hd today 475,000  hd wk ago 476,681 hd yr ago

 

Midday Carcass Value Tuesday

Beef

Choice up 0.58 206.04

Select  up 0.89 197.86

C/S Spread 8.18

Loads 55

Pork

Carcass up 1.14 65.48

Bellies up 1.95 93.01

Loads 210

 

Grains Settlement

  • Corn dn 1/2 – 4 1/4
  • Soybeans dn 1 – 3 1/4
  • Chicago Wht up 1/2 – 2 3/4
  • Kansas City Wht up 1 3/4 – 3 1/4

Livestock Settlement

  • Live Cattle dn 0.70 up 0.25
  • Feeder Cattle dn 1.22 up 0.05
  • Lean Hogs dn 0.07 -0.82
  • Class III Milk dn 0.23 up 0.16

Pre-Opening Market Broker Commentary

Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today. Weather is a major driver for the grains currently.


Jerry Stowell, Country Futures,  looks at what may impact the livestock futures today. Equities are lower ahead of the open. That could put pressure on livestock futures. Cash cattle was light on Monday, but firm.


Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. Zuzolo continues to see similarities between 2020 and 2012.


John Payne, Daniels Ag Marketing, looks at the grain settlements. Noon time GFS weather forecasts are changing for the end of July. This could stop weather bulls.


Jack Fenske, York Commodities, looks at the closing market numbers.

For the first full week of July corn and soybean ratings started to drop slightly across the nation.Corn silking is the first crop condition area we see that is actually behind the five year average. Winter wheat harvest is rolling along ahead of schedule in most states.  Top soil and subsoil moisture continue to be dry and dropping across the country.

NASS estimated that 71% of the corn crop was in good-to-excellent condition as of Sunday, July 5, down 2 percentage points from 73% the previous week but still well above 57% at the same time a year ago.

For corn Iowa and Minnesota set at the top of the pile with 85% good-to-excellent condition ratings. Pennsylvania stays a close second at 82% and Nebraska it towards the top at 74% good to excellent.  On the opposite end of the scale Michigan and Colorado have the highest percentage of corn rated very poor to poor, at 14% and 16%, respectively.

Up to this point in the growing year much of the crop progress has been well ahead of the five year average. Corn silking however continues to to run behind the five year average. NASS estimated that 10% of corn was silking, 6 percentage points behind the five-year average of 16%.

Soybean development, on the other hand, was near to slightly ahead of normal last week. Soybeans blooming was estimated at 31%, 7 percentage points ahead of the five-year average of 24%, while soybeans setting pods was estimated at 2%, near the five-year average of 4%.

Looking at the state by state break down Iowa is now 37% in bloom, Minnesota 43% and Nebraska 41%. All these ratings are well ahead of their respective 5 year average.

The national soybean condition rating came in the same as the corn crop: 71% good to excellent nationwide. That was unchanged from the previous week and still well ahead of 53% at the same time last year. Iowa was 84% good to excellent, along with Minnesota 83% , Wisconsin 79% and Nebraska 76% .

Meanwhile, winter wheat harvest moved ahead 15 percentage points last week to reach 56% complete as of Sunday, 1 percentage point ahead of the five-year average of 55%.

Harvest in Kansas in 80% complete, Illinois is 81% and Missouri is at 84% finished,. Nebraska winter wheat is 16% harvested, and South Dakota has not started yet.

Winter wheat condition — for the portion of the crop still in fields — was rated 51% good to excellent, down 1 percentage point from 52% from the previous week. Sixty-one percent of North Dakota’s winter wheat crop was rated good-to-excellent.

View the full report here: https://downloads.usda.library.cornell.edu/usda-esmis/files/8336h188j/c247fd92b/1g05g1123/prog2820.pdf

Clay Patton breaks down the full report here:

  • Mother nature reminds folks of who’s in charge with the weather forecast
  • USMCA is official today
  • More perspective of yesterday’s report.
  • Shortened trade week with markets closing at noon on Thursday
  • Some heave short positions as you compare 2019->2020
  • Demand from China for corn & soybeans
  • Hog disease that has popped up on the news circuit
  • China blocking more countries from shipping meat

 

Markets turn around…a correction that wasn’t a Tuesday.  USDA report out tomorrow.  Will see a quick knee jerk reaction to the report & then the report market reaction will mellow out some.  Will June report have more weight than the September report?  Will the weather & warmth for first part of July be a market issue?  Another pressure point has been COVID-19 & its effects on the markets of soybeans.

 

Commodity markets, including grains, fell in with the risk off sentiment that developed across the entire market complex Friday. Brain Splitt with Ag Marketing.Net weighed in on how rising cases of Covid-19 may impact more than the equity markets.

Energy markets are at risk as states like Texas pause their reopening. That translate to harm for corn demand. Splitt is quick to point out though that there is one demand factor that could be improving for corn and that is feed demand. As DDGS and other feed ration ingredients became more scarce corn filled in more gaps livestock feeders.

China is back in the market for US soybeans on Friday, but their total demand picture is still fuzzy. A weather story would definitely help bean bears, but time for the story to develop is starting to dwindle in Splitt’s opinion.

Listen to the full commentary here:

Name change for INTL FC Stone.  China & the growing corn deficit, Army worms-is that a concern for China.  Where are we at for Phase One with China…a lot of opposite information.  Progression of the winter wheat harvest.  How are drought areas dealing with harvest?  Early Russian harvest is better then expected.  Bayer has a deal with Round-Up & dicamba.  Hogs & Pigs report out on Thursday.  Update on African Swine Fever