Morning Comments – Tuesday August 9, 2016

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Buchheit Morning Comments from Dave Danker                Tuesday August 9, 2016

Monday’s commodity market was higher for soybeans, corn and wheat.  Specs and commercials pushed the soybean market higher after additional soybean sales to China.  The Macro Markets were mixed as the DOW was lower; Oil higher and the US Dollar Index trading higher.  The Dow closed at 18,529 down 14 points for the day.  Crude Oil closed at $42.89, up $1.09 per barrel.  The West Texas Intermediate Crude (WTI) September 16 to September 17 spread closed tonight at $5.34 carry to September 2017.   August Heating Oil closed at $1.3399, up $0.0229 per gallon.  The US Dollar Index closed at $96.37, up $0.07.  The 10-year US Treasury bond closed up at a 1.59% yield and the 30-year bond closed at 2.30%.  Monday’s CBOT closes were 0.25 to 1 cents per bushel higher for corn, 10.25 to 15 cents higher for soybeans and 0.25 to 1 cents higher for Chicago wheat.  Cash bids at the river have traded at $10.40 after they reached $11.90+ for November through January for soybeans and SEP corn is trading around $3.50 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.

FC STONE released their crop estimates last 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.  Since then, Informa Economics have released a corn estimate of 168.7 bpa and a soybean estimate of 47.7 bpa.  Other analysts are estimating the national corn crop to be between 171 and 176 bpa and the soybean crop to be between 48 and 51 bpa.  Almost all estimates result in bigger ending stocks and most likely, lower 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.

USDA Crop Progress reports released Monday afternoon estimated corn Good-Excellent condition at 74% versus 76% LW, 70% LYR and 58.8% for the 5-year average.  The soybean condition ratings were 72% GE, 72% LW and 63% last year with a 5-year average of 57.0%.  Missouri Corn condition was reported as 75% GE, 76% LW, 53% LYR and 47.8% – 5yr. avg.  Missouri Soybeans were 70% GE, 70% LW, 33% LYR and 41.9% – 5-year average.  This report was bearish.  Missouri corn condition is rated 22% better than last year and Missouri soybeans are 37% 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 Accumulation by the Specs and Commercials pushed the soybean and meal markets higher today as Specs bought 2,000 contracts of corn to finish the day at 105,000 contracts short. They bought 8,000 contracts of soybeans to close at 111,000 contracts long and they bought 1,000 contracts of wheat to close at 116,000 contracts short.  Specs bought 2,000 contracts of SBM and are long 59,000 contracts of Soybean Meal.

CIF bids for corn and soybeans have weakened in the Gulf, wheat CIF is softer with August wheat at (20 bid-no offer), OND wheat (60 bid-no offer).  October soybeans were quoted (91 bid-93 ask).  August corn was quoted (no bid-68 ask), Sep was quoted (67-75) and October corn was (72 bid-77 asked).

Barge freight has firmed.  Freight firmed 60-70% in the last three weeks with the nearby   August at 240-375.  Harvest barges traded today at 375-500 for SEP and 490-510 for OCT.

Live Cattle futures were lower losing $0.25 to $0.88; Feeder Cattle were mixed-higher, and Lean Hog futures were $0.55 to $0.85 higher.  August Live Cattle closed at $116.93, down $0.75 and October closed at $114.65, down $0.88.  August Feeder Cattle closed at 149.13, down $0.53 and October Feeder Cattle closed at $144.30, up $0.43.  Lean Hogs were higher in the majority of the options in the Lean Hog market.  August closed at $67.10, down $0.35.  Cash Hogs are called steady to $1 lower on Tuesday and Cash Cattle are called steady to $2 higher after late week trades at $189-192 in the beef and $115-117 live.  The Pork Cutout finished at $76.99, up $0.14.  Beef Feedlots are asking $119-120 in the South and $189-190+ in the beef after seeing some offers late week trade at $187-188.  Choice Beef closed at $198.73, down $0.27 and Select Beef at $191.45, up $1.25. Feeder Cattle traders and producers may benefit from the prospect of more than adequate feed grain supplies for the remainder of this year and well into next year.  The biggest risk to Feeder Cattle prices is the possibility of a summer drought that dramatically increases feed costs is rapidly fading away with every rain shower and additional day without extreme heat in the Corn Belt.

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.