Morning Comments – Friday August 26, 2016

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Buchheit Morning Comments from Dave Danker

Thursday’s commodity market was sharply lower for soybeans, lower for corn and wheat.  Specs and commercials pushed the soybean market lower based on weakening soybean meal demand and strong crop condition numbers.  The Macro Markets were negative as the DOW was lower; Oil lower and the US Dollar Index traded higher.  The Dow closed at 18,448 down 33 points for the day.  Crude Oil closed at $47.32, down $0.26 per barrel.  The West Texas Intermediate Crude (WTI) October 16 to October 17 spread closed tonight at $4.76 carry to October 2017.  September Heating Oil closed at $1.5092, up $0.0086 per gallon.  The US Dollar Index closed at $94.74, up $0.28.  The 10-year US Treasury bond closed down at a 1.57% yield and the 30-year bond closed at 2.26%.  Thursday’s CBOT closes were 3 to 4.25 cents per bushel lower for corn, 20.75 to 32.5 cents lower for soybeans and 1 to 2.75 cents lower for Chicago wheat.  Cash bids at the river have traded at $10.15 after they reached $11.47+ for November through January for soybeans and SEP corn is trading around $3.33 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 at our local elevators.  If you need help with marketing and logistics, we can help sell your crop arrange transportation to the terminals if necessary.

The ProFarmer Crop Tour is winding through the Corn Belt this week.  They have found lower than USDA numbers in Ohio, Indiana and Illinois on the Eastern Corn Belt Tour.  They have also found lower numbers on the Western Leg of the tour as well.  A key element to point out is that their tour only covers a small portion of each state and if there has been variability in the state they miss those positive areas.  The key is most likely the fact that they are finding quite a bit of variability which not normally a part of huge record crops.

Our I-55 Tech Park Plot tour was held on Wednesday, August 24th.  We had several tour groups that participated with our agronomists in discussions about corn hybrids, soybean varieties, crop herbicides, fungicides and plant growth hormones.  Our agronomists answered several producer questions and shared their experiences with Southern Rust, Stalk Rot, nitrogen leaching and many other topics.  If you are interested in our plot data, go to www.buchheitagri.com and search the “Tech Park” button to view the plot data for the last few years.  We had a great group and based on the feedback I received, I think everyone enjoyed themselves.

USDA Crop Progress reports released Monday afternoon estimated corn Good-Excellent condition at 75% versus 74% LW, 69% LYR and 58.0% for the 5-year average.  The soybean condition ratings were 72% GE, 72% LW and 63% last year with a 5-year average of 57.6%.  Missouri Corn condition was reported as 75% GE, 76% LW, 51% LYR and 47.0% – 5yr. avg.  Missouri Soybeans were 72% GE, 72% LW, 30% LYR and 41.8% – 5-year average.  This report was bearish.  Missouri corn condition is rated 25% better than last year and Missouri soybeans are 42% 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.      

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. 

Long Liquidation by the Specs and Commercials pushed the soybean and meal markets lower today as Specs sold 18,000 contracts of corn to finish the day at 183,000 contracts short. They sold 14,000 contracts of soybeans to close at 80,000 contracts long and they sold 3,000 contracts of wheat to close at 119,000 contracts short.  Specs sold 6,000 contracts of SBM and are long 40,000 contracts of Soybean Meal.    

CIF bids for corn and soybeans have weakened in the Gulf, wheat CIF is softer with September wheat at (45 bid-52 ask), OND wheat (55 bid-no offer) and JFM wheat at (50 bid-57 ask).  October soybeans were quoted (89 bid-91 ask).  August corn was quoted (59 bid-63 ask), Sep was quoted (61-66), October corn was (62 bid-65 asked) and DEC corn was (62 bid-63ask).

Barge freight has firmed.  Freight firmed with the nearby   August at 260-300.  Harvest barges traded today at 310-475 for SEP, 440-640 for OCT, NOV at 325-425 and DEC-JAN 275-300.  March CIF freight is quoted (225-250) and April is at (200-225). 

Live Cattle futures were lower losing $0.18 to $0.38; Feeder Cattle were lower, and Lean Hog futures were $0.60 to $1.63 lower.  August Live Cattle closed at $112.48, down $0.25 and October closed at $108.53, down $0.38.  August Feeder Cattle closed at 146.73, up $0.08 and October Feeder Cattle closed at $138.10, down $0.98.  Lean Hogs were lower in the nearby.  October closed at $58.70, down $1.63.  Cash Hogs are called steady to $1 lower on Friday and Cash Cattle are called steady to $1 lower after mid-week trades at $179-182 in the beef and $114-116 live.  The Pork Cutout finished at $76.22, up $0.61.  Beef Feedlots are asking $117-118 in the South and $186-188+ in the beef after seeing some offers mid-week trade at $179-182.  Boxed beef is stronger with Choice up $0.84 at $200.36 and Select up $0.62 at $194.15. 

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.

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:  http://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.

We are providing a DP program for those producers wanting to wait for a better day in the markets. Check out our current DP rates at http://www.buchheitagri.com/dp-rates/ We can help develop a marketing plan and a floor price program.  Call Katlyn, Chad, Eric or Dave at 800-622-7937, Shon at 573-667-9921 or 768-0489.