Morning Comments – Friday September 2, 2016

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Thursday’s commodity market was steady-higher again for soybeans, corn and wheat.  Commercials pushed the corn and wheat markets higher after several days of across the board losses.  The Macro Markets were mixed as the DOW was higher; Oil lower and the US Dollar Index trading lower.  The Dow closed at 18,419 up 18 points for the day.  Crude Oil closed at $43.50, down $1.40 per barrel.  The West Texas Intermediate Crude (WTI) October 16 to October 17 spread closed tonight at $4.43 carry to October 2017.  October Heating Oil closed at $1.3912, down $0.0345 per gallon.  The US Dollar Index closed at $95.63, down $0.32.  The 10-year US Treasury bond closed up at a 1.57% yield and the 30-year bond closed at 2.23%, unchanged from yesterday.  The Spec Funds have flipped their Copper position from being about 5,000 contracts long to being about 1,300 contracts short.  Copper is considered a leading economic indicator and this flipping of the copper position indicates a general change in Spec sentiment.  Thursday’s CBOT closes were 6.5 to 9.5 cents per bushel higher for corn, 1 lower to 3.25 cents higher for soybeans and 5 to 7.25 cents higher for Chicago wheat.  October Soybean Meal closed at $308.90 per ton, up $0.50 per ton.  Cash bids at the river have traded at $10.21 after they reached $11.47+ for November through January for soybeans and SEP corn is trading around $3.22 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.

FC Stone and Informa Economics are out with crop estimates on Friday.  The USDA WASDE report will be released next Friday, 9-9-2016.  Both estimates are expected to confirm a large and growing US crop.  I was surprised to see one of the more Bullish analysts turn Bearish on Thursday.

USDA Crop Progress reports released Monday afternoon estimated corn Good-Excellent condition at 75% versus 75% LW, 69% LYR and 55.4% for the 5-year average.  The soybean condition ratings were 73% GE, 72% LW and 63% last year with a 5-year average of 55.6%.  Missouri Corn condition was reported as 76% GE, 75% LW, 51% LYR and 42.6% – 5yr. avg.  Missouri Soybeans were 73% GE, 72% LW, 33% LYR and 40.0% – 5-year average.  This report was bearish.  Missouri corn condition is rated 25% better than last year and Missouri soybeans are 43% 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.

Initial harvest reports from the Missouri Bootheel are a bit of a surprise as some producers are reporting 8-10% lower yields than last year.  We are also finding cob rot and sprouts in some areas of the Bootheel.

A new tech startup in the field of grain yield prediction is sending out information to a group of Beta Testers of which I am one.  The name of the program is Kernel and it is being developed by TellUSLabs.  You can check them out at:  www.telluslabs.com/kernel   Their prediction on (8-30-16) was:  Corn at 171 bpa on 86.55 million harvested acres, yielding a total US Corn Crop of 14.81 billion bushels and Soybeans at 50.4 bpa on 86.55 million harvested acres, yielding a total US Soybean Crop of 4.36 billion bushels.  Their predictions on Thursday, 9-1-2016 were Corn at 171.7 bpa, yielding a total US corn crop of 14.93 billion bushels and a Soybean crop of 50.8 bpa, yielding a total US soybean crop of 4.22 billion bushels.  This is 120 million bushels of corn higher than what was predicted on 8-30-16 and 140 million bushels less of soybeans.  This technology utilizes improved satellite imagery and soil moisture prediction technology in order to predict crop yields.

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 Accumulation by the Commercials pushed the corn and wheat markets higher today as Commercials and Specs bought 11,000 contracts of corn to finish the day at 214,000 contracts short. They sold 0 contracts of soybeans to close at 78,000 contracts long and they bought 3,000 contracts of wheat to close at 128,000 contracts short.  Specs sold 0 contracts of SBM and are long 31,000 contracts of Soybean Meal.

CIF bids for corn and soybeans have softened in the Gulf, wheat CIF is softer with September wheat at (25 bid-38 ask), OND wheat (55 bid-no offer).  October soybeans were quoted (83 bid-89 ask).  Sep corn was quoted (44-49); October corn was (57 bid-61 asked) and DEC corn was (60 bid-65ask).

Barge freight has firmed.  Freight firmed 60-70% in the last three weeks with the nearby   August at 250-300.  Harvest barges traded today at 350-500 for SEP, 460-475 for OCT and NOV at 325-425, DEC-JAN 275-300.

Live Cattle futures were sharply weaker losing $2.43 to $3.00; Feeder Cattle were lower, and Lean Hog futures were $0.25 to $0.50 higher.  Aggressive long liquidation triggered a key reversal in the cattle complex on Thursday.  Traders and cattle feeders are getting whipsawed by the large funds.  October Live Cattle closed at $103.58, down $3.00 and December closed at $105.40, down $2.98.  September Feeder Cattle closed at 137.30, down $3.23 and October Feeder Cattle closed at $134.53, down $3.83.  Lean Hogs were higher in the nearby.  October closed at $63.33, up $0.48.  Cash Hogs are called steady to $1 lower on Friday and Cash Cattle are called steady after trades at $175 in the beef and $110 live during Thursday’s light trade.  The Pork Cutout finished at $78.39, up $0.98.  Pork Bellies are firmer and the primal cuts are stronger.  Beef Feedlots are asking $112-114 in the South and $176-178+ in the beef after seeing trade at $175.  Boxed Beef was lower with Choice at $195.74, down $0.75 and Select at $188.49, down $1.22.

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.