Tag Archives: corn

Summary

Mid week and the markets are still shaky for the bulls. Still weighing heavy on the macro or broad market picture is the possibility of another round of US stimulus may be on hold as the death of a Supreme Court Justice and their potential replacement weighs heavy on Congress and the President. Across the pond reports  of fraud and money laundering are still stinging some of the worlds largest banks including HSBC, Barclays and Deutsche .

Tuesday though was met with some positive economic data. Before the opening bell the weekly Redbook showed year on year retail sales up 1.5% for last week. That was better than the previous week’s -1.2%. It was also the first positive retail sales growth since late July/early August. One week doesn’t mean a lot in the big picture, but it could be a start to some retail resurgence.

Wednesday saw more positive housing data with MBA Mortgage applications rising 6.8% on the week ending September 18, after falling 2.5% on the week prior; new home purchases rose 3.4% after falling 0.5% in the previous week, while refinancing’s increased by a sharp 8.8% on the week to last Friday, after declining by 3.7% in the week prior. These were strong numbers despite a rebound in the average 30-year mortgage rate to the highest level since mid-August (though that’s still only 3.10%); mortgage applications are up 25% year-over-year despite rising prices, with some economists pointing to a massive overall pandemic shift to the “home office” going forward – U.S. workers are investing more in their homes with the new norm.

Existing home sales rose to an annualized rate of 6.000 million in August, up 2.4% from the 5.860 million unit pace in July and slightly above analyst expectations of 5.965 million. The August increase follows a robust 24.7% increase in July as people rushed to take advantage of record low mortgage rates. The pace of August existing home sales was up 10.5% year-on-year, up from an 8.7% year-on-year pace in July. The housing market continues to be one of the hottest sectors of the economy, due to those low interest rates.

Energy production data on Wednesday showed US crude oil stocks down 1.6 million barrels. Which was better than what many expected. Unfortunately US gasoline and other distillates actually increased. As a result energy futures were mixed.

For the week ending September 18 US ethanol production decreased 2.2%, or 21,000 barrels per day (b/d), to 906,000 b/d. US ethanol stocks in the same time frame increased 1.0%, 20,000 barrels to 20.0 million barrels, which was 11.1% below year-ago volumes. Inventories increased across all regions except the Midwest (PADD 2) and Rocky Mountains (PADD 4). The volume of gasoline supplied to the U.S. market, a measure of implied demand, ticked up 0.4% to 8.52 million b/d (130.53 bg annualized). Gasoline demand remained 8.9% lower than a year ago.

Grain bulls are losing steam and some analyst are starting to suspect nearby highs have been established. Wheat broke to the technical down side on Wednesday. Closing below several key area’s of support. The positive news is Egypt’s latest tender shows them buying higher priced Russian wheat and that could mean business will eventually move back to the US. Wheat bulls are also closely watching a weather story develop in the Southern Pacific. Ocean temperatures are suggesting that late 2020 could be in a La Nina weather pattern. That means cold dry conditions for much of the US southern plains and poor conditions for hard red winter wheat. As for corn a rising dollar is putting the breaks on energy futures. That is hurting ethanol margins and in turn corn demand. The latest crop progress report also shows harvest is starting around the country for most row crops and outside of Iowa most yields aren’t horrible. Soybeans have had an impressive run to the upside. The move appears to have attracted quite a bit of fund money as well. Monday’s soybean open interest surged to 974,373 contracts, which was just below the record open interest posted in early 2017. However record open interest and managed money sitting in a long position is a recipe for fund liquidation at some point and it appears that bulls are running out of steam. The morning announcements of sales to China are not catching the attention they use to. There is also the concern of what happens when USDA doesn’t announce a sale to China.

However the question hasn’t been asked yet so an answer is unknown. So far this week China has been in the market everyday. On Monday the USDA announced sales of 171,000 MT of soybeans to unknown destinations, 132,000 MT of soybeans to China and 132,000 MT of soybeans to Pakistan.  Tuesday USDA announced 4 flash sales. Two to China; 266,000 MT of soybeans and 140,000 MT of corn. Two to unknown destinations; 264,000 MT of soybeans and 320,000 MT of corn. Wednesday China purchased 132,000 MT of soybeans. Unknown destinations purchased 126,000 MT of soybeans.

Livestock end mixed again on Wednesday. Cattle were able to pull some of their losses from Tuesday back. While lean hogs gave back partial gains. Chris Swift with Swift Trading may have described the current livestock market the best and that is boring. Cattle seem somewhat range bound and marking time until the cattle on  feed Friday. Lean hogs are waiting for export numbers and the quarterly hog numbers on Thursday. Cold storage seemed to have little impact on the market, but highlights that there is demand, but maybe not as much as some had anticipated.

Tuesday the cold storage report showed a monthly build in frozen red meat, but still well below year ago levels. Total red meat supplies in freezers were up 3% from the previous month but down 13% from last year. Total pounds of beef in freezers were up 5% from the previous month but down 2% from last year. Frozen pork supplies were up 2% from the previous month but down 23% from last year. Stocks of pork bellies were down 28% from last month and down 33% from last year.

Thursday traders will know more about the latest supply of hogs in the US with quarterly hogs and pigs report. Friday the cattle supply will be known with the latest cattle on feed report.

In the country Wednesday it was quiet as has been the rest of the week. There was rumor of $105 live in Western Nebraska, but that has not been confirmed. On Tuesday there was a light trade in the North with Iowa and Nebraska letting a few go at $164 dressed. Monday saw a light trade in Texas at $103 live. Either day hasn’t had enough trade to establish a full market trend. Asking prices appear to be $106 in the South and $167 in the North.

The Fed Cattle Exchange Auction today listed a total of 683 head (two lots each in Kansas and Texas), of which 219 actually sold, 195 head were listed as unsold, and 269 head were listed as PO (Passed Offer). The state by state breakdown looks like this: TX 417 total head, with 148 head sold at $104.25, 0 head unsold, 269 head listed as PO ($104.25); KS 266 total head, with 71 head sold at $104.00, 195 head unsold, and 0 head listed as PO. The delivery date/price range breakdown is as listed: 1-9 day delivery: 464 head total, of which none sold; 1-17 day delivery 219 head total, all sold, with a price range of $104.00 to $104.25.

For the week ending September 12, 2020, Imported Beef Passed for Entry in the U.S. totaled 36,388, 84.37% of the previous week and 81.60% of the 4-week average.

Expected Slaughter numbers Thursday

Cattle

120,000 hd today 117,000 hd wk ago 118,382 hd yr ago

Hogs

485,000 hd today 484,000 wk ago 484,697 hd yr ago

 

Midday Carcass Value Wednesday

Beef

Choice up 0.96 216.40

Select up 1.63 207.93

C/S Spread 8.47

Loads  111

Pork

Carcass up 2.09 90.75

Bellies up 4.03 154.34

Loads 160

Grain Settlements

  • Corn dn 3/4 – 1 1/2
  • Soybeans dn 1/2 – 5 3/4
  • Chicago Wht dn 7 – 9
  • Kansas City Wht dn 7 – 7 3/4

Livestock Settlements

  • Live Cattle up 0.10 – 1.02
  • Feeder Cattle up 0.25 – 0.90
  • Lean Hogs dn 0.22 up 1.17
  • Class III Milk up 0.01 – 0.13

Pre-Opening Market Broker Commentary

Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today. USDA did not announce a flash sale on Thursday morning.


Jerry Stowell, Country Futures,  looks at what may impact the livestock futures today. Pork export sales were .


Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. Wheat is seeing the strongest signs of a technical selloff.


John Payne, Daniel’s Ag Marketing, takes a closer look at today’s grain close. Grains are lower, but there are fundamentals that could help turn things around on Thursday.


Jack Fenske, York Commodities, looks at the closing market numbers. Soybeans appear to have put their nearby high in place.

  • Change in the tone of the soybean trade…what does that mean for producers
  • Dollar trade
  • Equity indices what should we be looking for?
  • Volatility could set in as we get closer to the election
  • Where are the funds in soybeans?
  • The macro economics & how it will have an effect on grains
  • Double tops…how will that effect the cattle?

While the markets took a wild ride on Monday the NASS crop progress report looks fairly uneventful. Row crop harvest is getting started somewhat ahead of the five year average. That has been expected by many though given the early and swift planting that occurred. After big double digit increases in the soil moisture profile last week dry conditions have set back in and are slowly taking the soil moisture down.

In a full breakdown of the report we start with corn in the dent stage. It’s essientially complete across the country this week at 95%. That is up 6% from last week and still 5% ahead of the five year average. 97% of Nebraska corn is in the dent stage, 96% of Kansas corn is in the dent stage and 94% of Iowa corn is in the dent stage. All just a few points ahead of the five year average.

Corn maturity is also moving along swiftly with a nationwide rating of 59%. That is an 18% increase in the mature corn from a week ago. It’s also perfectly 10% ahead of the five year average. In the Midwest; 93% of the Nebraska corn crop is mature, 81% of the Kansas corn crop is mature and 66% of the Iowa corn crop is mature. All of these are ahead of their respective five year average, except Kansas which is 1% behind the five year average.

Corn harvest slowly moves along in the country up 3% nationwide from last week to 8% complete. Unlike the rest of the corn stages harvest is actually behind the five year average of 10%. Texas is by far the farthest along in corn harvest with 69% of the crop out of the field. Nebraska has 10% of the corn harvested. Iowa has 4% of the corn harvested. All these states are still ahead of their five year average. Kansas on the other hand has harvested 16% of their corn crop is 6% behind the five year average.

Finally with corn the overall condition of the crop remains little changed from last week. Nationwide the crop ticked up 1% to 61% good to excellent. Nebraska corn increased 3% to 63% good to excellent. Kansas corn remains unchanged week to week at 54% good to excellent. Iowa corn also remains unchanged week to week at 42% good to excellent.  Illinois corn follows the Nebraska plan with corn conditions rising 3% to 73% good to excellent.

Staying with row crops soybean dropping leaves is now considered 59% complete across the country. That helps it stay 9% ahead of the five year average. 82% of the Nebraska soybean crop has dropped leaves, 48% of the Kansas soybean crop has dropped leaves and 66% of the Iowa soybean crop has dropped leaves. All of these are well ahead of their five year average.

Soybean harvest is also now far enough along to be recognized by crop progress. Nationwide 6% of the soybean crop has been harvested. That is fully steady with the 5 year average. In Nebraska 10% of the soybean crop has been harvested. Iowa, 7% of the soybean crop has been harvested and in Kansas 2% of the soybean crop has been harvested. All of these are well ahead of the five year average of Kansas takes the cake doubling their five year average for soybean harvest.

Just as corn soybean condition rating is relatively unchanged week to week. Nationally the soybean crop is rated 63% good to excellent, unchanged week to week. Also remaining unchanged week to week is Illinois soybeans at 71% good to excellent and Iowa soybeans at 48% good to excellent.  Nebraska soybeans actually increased 2% week to week at 66% good to excellent. Kansas was one of the few states to see an actual decrease in soybean conditions with a drop of 6% to 45% good to excellent.

Now to sorghum. Sorghum maturity continues to be ahead of the  five year average with a national rating of 51% mature, 3% ahead of the five year average. Nebraska sorghum has reached 49% maturity. A solid 13% ahead of the five year average.

Sorghum harvest is starting to get underway. Nationwide 27% of the sorghum crop is out of the field. That is 2% behind the five year average. In Nebraska 2% of the sorghum crop is harvested. 1% behind the five year average.

Nationwide the sorghum crop is rated 51% good to excellent, down 1% from last week. In Nebraska the sorghum crop is rated 66% good to excellent. A sharp 6% decline from last week.

Winter wheat continues to go into the ground with 20% of the national crop planted. Just 1% ahead of five year average. Nebraska is well ahead of the Kansas at 40% planted. Kansas is 14% planted.

Winter wheat is also starting to emerge with 3% of the national crop above ground. 1% of the Kansas crop has emerged and 0% of the Nebraska crop has emerged.

After big gains last week pasture and range conditions fall this week. Kansas range condition fell 4% to 37% good to excellent. Nebraska pasture condition fell 1% to 40% good to excellent.

Soil moisture was also tightened this week due to dry conditions re-emerging. In Nebraska the topsoil rating dropped 6% to 48% adequate to surplus and the subsoil rating dropped 3% to 44% adequate to surplus. In Kansas topsoil moisture was unchanged week to week at 63% adequate to surplus, subsoil moisture actually increased 2% to 62% good to excellent.

You can see the USDA report here: https://downloads.usda.library.cornell.edu/usda-esmis/files/8336h188j/2227nd802/h415q0669/prog3920.pdf 

Clay Patton recaps the report here:

 

MANHATTAN, Kan. — EPA announced the interim decision for atrazine, marking the end of the registration review process and clearing the way for continued use of a key herbicide for Kansas farmers. The Kansas Corn Growers Association (KCGA) is a founding member of the Triazine Network, a coalition of organizations from a variety of crops across the nation that advocates for science-based regulatory decisions for the triazine herbicides. KCGA CEO Greg Krissek said today’s announcement is a positive step forward for atrazine, a product that provides needed weed control and is a valued tool in conservation tillage practices like no-till farming. Krissek and Missouri Corn CEO Gary Marshall, who are co-chairs of the Triazine Network, participated in a round table with EPA Administrator Andrew Wheeler today near Springfield, MO.

“We were pleased with the announcement at today’s round table discussion with Administrator Wheeler which affirmed the continued use of atrazine as well as simazine and propazine. This is a culmination of years of work,” Krissek said. “The next step for atrazine is the Endangered Species Act review, and we will continue to work with EPA as the agency prepares its biological evaluation for the ESA review that is expected to be published with a comment period this fall. Our organizations will remain closely involved in these regulatory actions surrounding atrazine and the triazine herbicides.”

The registration review has been underway since 2013, and this decision is a positive outcome for growers.

“Today’s news provides much needed regulatory certainty for farmers during a time when few things are certain,” said Triazine Network Co-Chair Gary Marshall. “We appreciate today’s announcement from EPA Administrator Wheeler. We thank the agency on behalf of the farmers who rely on atrazine to fight problematic weeds and employ conservation tillage methods to reduce soil erosion and improve water and wildlife habitat. “

Atrazine ranks second in widely used herbicides that help farmers control weeds that rob crops of water and nutrients. Utilized for over 60 years, atrazine is the most researched herbicide in history and has a proven safety record. Today’s announcement concludes the registration review process where EPA is required to periodically re-evaluate existing pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). The next step for the triazines is a draft biological evaluation required under the Endangered Species Act (ESA), which is expected to be published in October.

“This isn’t the last review of atrazine. In fact, the Endangered Species Act review will be key to the future of atrazine as well as other crop protection tools. Moving forward, we remain vigilant in ensuring the agencies involved utilize high-quality, scientific studies,” stated Marshall. “The EPA has said they will utilize the best available research, first in a letter the Triazine Network in 2019 and again today. Our stance has always been sound, credible science must win. We appreciate these commitments, and EPA must hold true to them in the ESA evaluation.”

Approved for use 1958, atrazine has been extensively reviewed by EPA and others over the decades and across administrations. The final ESA assessment is slated to be released in 2021.

Thursday brought about another strong day of gains in the grain market. Soybeans continue to hold well over the $10 mark. Looking at a continuous chart that puts soybeans back towards highs not seen since early 2018 before the US China trade war kicked off. Kyle Bumsted with Allendale Inc. believes this now give farmers a unique opportunity to go back and visit their marketing strategy. 2019 has been a year that farmers have seen plenty of government payments, but now the market seems to be giving opportunity to market at a profitable level.

Bumsted also gives strong insight into why the feeder cattle corn spread may be nearing it’s useful end. Rather feeders are looking at the cash difference between the fats getting on the truck and the lightweights coming off the truck. Finally there is the lean hog market that really caught fire on Thursday. Could it be starting to get top heavy or is there more room to go higher?

You can hear all of Bumstead’s comments here:

  • Soybeans and what the potential is for this crop
  • Situation in China includes building hogs & expanding poultry
  • South America planting is underway
  • One in six restaurants failing nationally…the next 6 months do not look good

 

Mike Zuzolo, Global Commodity Analytics, joins the Fontanelle Final Bell on a turn around Tuesday in the ag commodity markets. Zuzolo highlights that today’s pullback was bound to happen sooner rather than later. Still in the soybean complex it’s good to see the July contract holding the strong physiological level of ten dollars. Now the question becomes can the current run of Chinese demand and South American production workout to allow the rally to continue. Zuzolo also breaks down the current buys being made by China and how they compare in the big picture of the Phase One Trade Deal.

In the second half of the program Zuzolo talks funds in the ag commodities and livestock. Cattle may be starting to hit overbought levels despite the fact cattle seasonally are in a slump after the Labor Day holiday. The conversation ends on the importance African Swine Fever still has on the markets.

Catch the full show here:

  • Did you see any surprises out of the crop report last Friday?
  • How did you feel about the corn and soybean yields that NASS report?
  • What do you think the yields will go show in the October report?
  • How does the demand for corn look at this time?
  • What does the soybean demand look like?
  • RFS denial announcement today
  • President Trump makes comments E15 using E10 infrastructure
  • South American weather with planting underway