Morning Comments – Thursday September 1, 2016

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Wednesday’s commodity market was lower again for soybeans, corn and wheat. Specs and commercials pushed the soybean market to its lowest close in four months, based on continued strong crop conditions and the continued strength in the US Dollar. The Macro Markets were negative as the DOW was lower; Oil lower and the US Dollar Index trading lower. The Dow closed at 18,401 down 53 points for the day. Crude Oil closed at $44.90, down $1.37 per barrel. The West Texas Intermediate Crude (WTI) October 16 to October 17 spread closed tonight at $4.44 carry to October 2017. October Heating Oil closed at $1.4316, up $0.0059 per gallon. The US Dollar Index closed at $95.95, down $0.18. The 10-year US Treasury bond closed up at a 1.57% yield and the 30-year bond closed at 2.23%. 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. Wednesday’s CBOT closes were 0.25 to 2.5 cents per bushel lower for corn, 6 to 9.5 cents lower for soybeans and 0.5 to 3 cents lower for Chicago wheat. October Soybean Meal closed at $308.40 per ton. Cash bids at the river have traded at $10.18 after they reached $11.47+ for November through January for soybeans and SEP corn is trading around $3.12 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.
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. 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 Liquidation by the Specs and Commercials pushed the soybean and meal markets lower today as Specs sold 0 contracts of corn to finish the day at 225,000 contracts short. They sold 5,000 contracts of soybeans to close at 78,000 contracts long and they sold 3,000 contracts of wheat to close at 131,000 contracts short. Specs sold 3,000 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 (40 bid-48 ask), OND wheat (55 bid-no offer). October soybeans were quoted (85 bid-89 ask). August corn was quoted (52 bid-56 ask), Sep was quoted (53-57); October corn was (56 bid-59 asked) and DEC corn was (60 bid-62ask).
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 weaker losing $0.65 to $0.90; Feeder Cattle were lower, and Lean Hog futures were $0.13 to $0.80 higher. Aggressive short cover triggered a key reversal in the cattle complex on Tuesday. October Live Cattle closed at $106.58, down $0.90 and December closed at $108.38, down $0.90. September Feeder Cattle closed at 140.53, down $2.00 and October Feeder Cattle closed at $138.35, down $1.18. Lean Hogs were higher in the nearby. October closed at $62.85, up $0.80. Cash Hogs are called steady to $1 lower on Thursday and Cash Cattle are called steady after trades at $175 in the beef and $111 live during Wednesday’s light trade. The Pork Cutout finished at $77.41, up $0.27. Pork Bellies are softer and the primal cuts are stronger. Beef Feedlots are asking $113-115 in the South and $176-178+ in the beef after seeing trade at $175. Boxed Beef was lower with Choice at $196.41, down $0.13 and Select at $189.71, down $1.46.
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.