Morning Comment-Tuesday August 2, 2016

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Commodity Market Tuesday August 2, 2016

Monday’s commodity market was sharply lower for soybeans and corn, lower for wheat. Specs and commercials pushed the soybean market sharply lower after good weekend rains and a forecast for lower temperatures and rain in some of the drier areas of the Corn Belt over the next week to 10 days. The Macro Markets were negative as the DOW was lower; Oil lower and the US Dollar Index trading higher. The Dow closed at 18,405 down 27 points for the day. Crude Oil closed at $39.99, down $1.61 per barrel. The West Texas Intermediate Crude (WTI) September 16 to September 17 spread closed tonight at $6.06 carry to September 2017. August Heating Oil closed at $1.2596, down $0.0479 per gallon. The US Dollar Index closed at $95.77, up $0.25. The 10-year US Treasury bond closed up at a 1.50% yield and the 30-year bond closed at 2.25%. Monday’s CBOT closes were 6 to 8.75 cents per bushel lower for corn, 34.75 to 41.5 cents lower for soybeans and 0.75 to 2.75 cents lower for Chicago wheat. Cash bids at the river have traded at $10.40 after they reached $11.90+ for November through January for soybeans and SEP corn is trading around $3.50 after hitting a top in $4.65-4.75 area for JAN delivery corn. We are currently bidding about $0.15 to $0.20 behind those prices for the same time slots.

FC STONE released their crop estimates Monday afternoon. They were Bearish with very high estimates for both corn and soybeans. The national corn yield was estimated at 15.146 Billion bushels (175 bpa) and the national soybean yield was estimated at 4.054 Billion bushels (48.8 bpa). Both of these estimates were above current expectations. The top ten corn producing states are expected to produce 12.39 Billion bushels of corn and 3.05 Billion bushels of soybeans (roughly 81% of the nation’s corn crop and 75% of the nation’s soybeans). Iowa, Illinois, Nebraska, Minnesota and Indiana are estimated to produce 9.219 Billion bushels of corn and 2.08 Billion bushels of soybeans. These top five states are expected to average 187 to 200 bushels per acre of corn and 50 to 56 bushels of soybeans per acre.

Please mark your calendar for our annual “Cattle Call”, cattle meeting with some of our local veterinarians participating in an informative panel discussing the potential issues with the new VFD regulations that will come into effect on January 1st, 2017. The meeting is Tuesday, August 9th from 5-8:00 pm in the St. Maurus Parish Hall, 10198 State Highway B, Biehle, MO. Please contact our office at 573-547-4569 (800-622-7937) and let us know if you can attend, or you cab register online athttp://www.buchheitagri.com/cattle-call-registration/ it’s quick and easy! We will serve an excellent meal with drinks and dinner provided free of charge. We will have some great giveaways and expert talks on forage, reproduction, nutrition, vaccinations, management and markets.

USDA Crop Progress reports released Monday afternoon estimated corn Good-Excellent condition at 76% versus 76% LW, 70% LYR and 58.8% for the 5-year average. The soybean condition ratings were 72% GE, 71% LW and 62% last year with a 5-year average of 57.0%. Missouri Corn condition was reported as 76% GE, 74% LW, 51% LYR and 47.0% – 5yr. avg. Missouri Soybeans were 70% GE, 68% LW, 30% LYR and 41.6% – 5-year average. This report was bearish. Missouri corn condition is rated 26% better than last year and Missouri soybeans are 40% better than one year ago. We are still very much in a weather market! The current weather has been crop friendly and is pressuring prices.

Long Liquidation by the Specs and Commercials pushed the soybean and meal markets lower today as Specs sold 12,000 contracts of corn to finish the day at 79,000 contracts short. They sold 9,000 contracts of soybeans to close at 111,000 contracts long and they bought 0 contracts of wheat to close at 137,000 contracts short. Specs sold 5,000 contracts of SBM and are long 57,000 contracts of Soybean Meal.

CIF bids for corn and soybeans have strengthened in the Gulf, wheat CIF is softer with August wheat at (20 bid-38 asked), OND wheat (60 bid-80 ask). October soybeans were quoted (89 bid-92 ask). August corn was quoted (65 bid-70 ask), Sep was quoted (70-76) and October corn was (75 bid-80 asked).

Barge freight has been trading at remarkably low levels. Freight firmed 60-70% in the last three weeks with the nearby July quote at 250-265%. August at 300-375. Harvest barges traded today at 435-500 for SEP and 490-510 for OCT.

Fescue prices were quite strong during the 2016 Harvest. We paid prices to range from $0.48 to $0.50 per pound. A good fescue fertility program involves the addition of 40 lbs. of nitrogen per acre in late August, followed by an application of nitrogen, phosphorus and potassium in the spring. You can spray 2,4-D and Dicamba for weeds in either the spring or fall. If you have a very heavy infestation of weeds, you might consider doing both.

Check out our Daily Grain Bids (updated every 10 minutes during the trading session) by clicking on: www.buchheitagri.com/biehle-grain-bids/ or www.buchheitagri.com/morehouse-grain-bids/ or feel free to call us at 800-622-7937 (ask for Katlyn, Eric or Dave) or call 573-667-9921 or 573-768-0489 and ask for Shon.

We are providing a DP program for those producers wanting to wait for a better day in the markets. We can help develop a marketing plan and a floor price program. Call Eric or Dave at 800-622-7937, Shon at 573-667-9921 or 768-0489.

We have updated our test plot results on our website.

You can check out our 2015 corn yields and some 2014 soybean and corn yields at:

www.buchheitagri.com/tech-park-data
Be sure to check out our website at: www.buchheitagri.com and see the marketing information available. If you scroll down on the front page you will find our market info page supported by AgriCharts. If you examine the left hand side of that page you will discover the options that allow you to create price graphs or charts and also to check on historical spread information.

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Morning Comment-Tuesday August 2, 2016

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