Morning Comments – Friday August 5, 2016

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Thursday’s commodity market was steady-higher for soybeans, lower for corn and wheat.  Specs and commercials pushed the New Crop Soybean market higher.  The Macro Markets were mixed as the DOW was lower; Oil higher and the US Dollar Index trading higher.  The Dow closed at 18,352 down 3 points for the day.  Crude Oil closed at $41.77, up $0.44 per barrel.  The West Texas Intermediate Crude (WTI) September 16 to September 17 spread closed tonight at $5.94 carry to September 2017.   August Heating Oil closed at $1.3211, up $0.0336 per gallon.  The US Dollar Index closed at $95.74, up $0.20.  The 10-year US Treasury bond closed steady at a 1.50% yield and the 30-year bond closed at 2.26%.  Thursday’s CBOT closes were 2.5 to 4.25 cents per bushel lower for corn, 0 to 2.5 cents higher for soybeans and 3 to 7 cents lower for Chicago wheat.  Cash bids at the river have traded at $10.55 after they reached $11.90+ for November through January for soybeans and SEP corn is trading around $3.54 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.  HRW wheat set a 10-year low on Tuesday and then rebounded on Wednesday.  There was some SRW export business on Wednesday in the Gulf as elevators decided to make room for corn and soybeans.

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.


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.

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 corn and wheat markets lower today as Specs sold 11,000 contracts of corn to finish the day at 90,000 contracts short. They sold 0 contracts of soybeans to close at 105,000 contracts long and they sold 5,000 contracts of wheat to close at 140,000 contracts short.  Specs sold 3,000 contracts of SBM and are long 51,000 contracts of Soybean Meal.

CIF bids for corn are mixed in the Gulf, wheat CIF is unchanged with SEP wheat (45 bid-55 ask) OND wheat (60 bid-80 ask).  October soybeans were quoted (90 bid-92 ask).  August corn was quoted (59 bid-64 ask), Sep was quoted (66-70) and October corn was (70 bid-73 asked).  Prospects of a huge new crop corn harvest are causing buyers to back away and wait for lower prices.

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.

Cattle futures were weaker and Lean Hogs were lower on Thursday.  August Feeder Cattle gained $0.10 and closed at $147.58.  August Live Cattle closed at $116.33 and December cattle closed at $114.88.  Lean Hogs traded $0.55 to $1.00 lower.  August Lean Hogs closed at $67.70, October closed at $58.50 and December Hogs closed at $54.38.  The Pork Cutout gained $3.69 and closed at $80.90.  Sale Barn auctions of fat cattle ranged between $119 and $122, but packers were still trying to bid $114 in the South and $188 in the beef in the North.  Feedlots are asking for $120-122 and $190-192.  Choice Boxed Beef was up $0.42; closing at $199.62 and Select was down $0.24, closing at $191.42.

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.  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.