Morning Comments – Tuesday August 23, 2016

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Buchheit Morning Comments from Dave Danker

Monday’s commodity market was higher for soybeans, lower for corn and wheat.  Specs and commercials pushed the soybean market higher based on continued strong export numbers.  The Macro Markets were negative as the DOW was lower; Oil lower and the US Dollar Index trading higher.  The Dow closed at 18,530 down 23 points for the day.  Crude Oil closed at $46.81, down $1.58 per barrel.  The West Texas Intermediate Crude (WTI) October 16 to October 17 spread closed tonight at $4.37 carry to October 2017.  September Heating Oil closed at $1.4874, down $0.0322 per gallon.  The US Dollar Index closed at $94.53, up $0.08.  The 10-year US Treasury bond closed up at a 1.54% yield and the 30-year bond closed at 2.23%.  Monday’s CBOT closes were 1 to 1.5 cents per bushel lower for corn, 8.25 to 11.75 cents higher for soybeans and 1 to 11.75 cents lower for Chicago wheat.  Cash bids at the river have traded at $10.55 after they reached $11.47+ for November through January for soybeans and SEP corn is trading around $3.35 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 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.      

Last Friday’s USDA WASDE report was a stunner with national corn yields estimated at 175.1 bpa and a total corn crop just shy of 15.2 billion bushels.  The soybean yields estimate was a stunner as well.  The big question is, “Have we put in the fall Low”?  Some analyst feel that we have several others think that we still have another move lower coming in the next few weeks.  One thing to consider is that as we have rallied the market higher, volume has decreased in both corn and wheat which is indicative of a Bear Market Rally and the fact that the soybean rally is being fueled by Soybean Oil is concerning as well.  Crop conditions remain strong and the weekend rains covered almost the entire Corn Belt and many areas in the South. 

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 Specs and Commercials pushed the soybean and meal markets higher today as Specs sold 2,000 contracts of corn to finish the day at 145,000 contracts short. They bought 6,000 contracts of soybeans to close at 97,000 contracts long and they sold 5,000 contracts of wheat to close at 107,000 contracts short.  Specs bought 2,000 contracts of SBM and are long 47,000 contracts of Soybean Meal.    

CIF bids for corn and soybeans have stabilized in the Gulf, wheat CIF is softer with September wheat at (45 bid-52 ask), OND wheat (55 bid-no offer).  October soybeans were quoted (90 bid-95 ask).  August corn was quoted (57 bid-61 ask), Sep was quoted (62-66), October corn was (68 bid-70 asked) and DEC corn was (64 bid-68ask).

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 lower losing $0.03 to $0.13; Feeder Cattle were higher, and Lean Hog futures were $0.03 to $0.78 lower.  August Live Cattle closed at $113.43, down $0.13 and October closed at $110.35, up $0.10.  August Feeder Cattle closed at 147.03, up $0.95 and October Feeder Cattle closed at $141.55, up $0.35.  Lean Hogs were lower in the nearby.  October closed at $61.15, down $0.78.  Cash Hogs are called steady to $2 higher on Tuesday and Cash Cattle are called steady to $2 higher after late week trades at $189-190 in the beef and $119-120 live.  The Pork Cutout finished at $75.14, up $0.88.  Beef Feedlots are asking $121-122 in the South and $192-194+ in the beef after seeing some offers late week trade at $189-190. 

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.