Morning Comments-Friday July 22, 2016

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Commodity Market Friday July 22, 2016

Thursday’s commodity market was lower for corn and wheat, soybeans were higher. The Macro Markets were negative as the DOW was lower; Oil lower and the US Dollar Index trading lower. The Dow closed at 18,522 down 73 points for the day. Crude Oil closed at $44.59, down $1.16 per barrel. The West Texas Intermediate Crude (WTI) September 16 to September 17 spread closed tonight at $6.71 carry to September 2017. July Heating Oil closed at $1.37, down $0.0354 per gallon. The US Dollar Index closed at $96.94, down $0.28. The 10-year US Treasury bond closed down slightly at a 1.57% yield and the 30-year bond closed at 2.31%. Thursday’s CBOT closes were 2.5 to 3.5 cents per bushel lower for corn, 2.5 to 5.5 cents higher for soybeans and 2.5 to 5.5 cents higher for Chicago wheat. Cash bids at the river are roughly $10.40 after they reached $11.90+ for November through January for soybeans and SEP corn is trading around $3.52 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. The next 10-15 days are predicted to be hotter than normal, but with near adequate moisture levels in most areas. Corn pollination is almost complete in the majority of the Corn Belt with good pollination reports in almost all areas. This will leave most export buyers and industrial users very confident of sourcing whatever corn bushels they need at a low price. The weather over the next 2-3 weeks will be the primary determinate of just how large the 2016 Corn Crop will be, but the current weather forecasts indicate the likelihood of a large crop. Two Friday’s ago the close left the corn: soybean ration at 3.31 to 1 (one of six times that the ratio has exceeded 3.2 to 1 since 1980). Typically, these spikes create a situation where soybeans decline 15-20%, while corn increases in value by 2-5%. The ratio closed on Thursday at 2.97 to 1. Both corn and soybeans have declined in value over the last two weeks, but soybeans have declined the most.

THE USDA CROP PRODUCTION ESTIMATES THAT WERE RELEASED AT 11:00 AM CDT, July 12th. WERE AS FOLLOWS: CORN – 14.540 BILLION BUSHELS AND SOYBEAN – 3.88 BILLION BUSHELS. The yield estimates were as follows: Corn – 168.0 bushels per acre and Soybeans – 46.7 bushels per acre. Most traders are now starting to pencil in a corn yield above 168 bpa, with some estimating yields as high as 171 bpa. The heat will still have some impact, but as you view the 15 day forecasts across the major corn growing areas, you see high heat for only another day or two and fairly good chances of rain as well.

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 76% versus 76% LW, 69% LYR and 61.6% for the 5-year average. The soybean condition ratings were 73% GE, 71% LW and 52% last year with a 5-year average of 52.2%. Crop Progress reports released Monday afternoon estimated Missouri Corn GE condition at 73% versus 71% LW, 52% LYR and 52.2% for the 5-year average. The Missouri Soybean condition ratings were 67% GE, 65% LW and 32% last year with a 5-year average of 46.6%. This report was 21% better than last year for corn and 35% better than last year for soybeans. There are 25-35% improvements in crop conditions in Illinois, Indiana and Ohio as well. This is the main story that has trader’s attention!

Long Accumulation by the Specs and Commercials pushed the soybean and meal markets higher today as Specs sold 3,000 contracts of corn to finish the day at 40,000 contracts short. They bought 4,000 contracts of soybeans to close at 92,000 contracts long and they bought 2,000 contracts of wheat to close at 129,000 contracts short. Specs bought 2,000 contracts of SBM and are long 51,000 contracts of Soybean Meal.

CIF bids have strengthened in the Gulf with SEP wheat at (45 bid-55 asked), OND wheat (55 bid). October soybeans were quoted (84 bid-87 ask). August corn was quoted (70 bid-74 ask), Sep was 75 bid and October corn was (78 bid-81 asked).

Barge freight had been trading at remarkably low levels. Freight firmed 60-70% in the last four weeks with the nearby July quote at 240-255%. August at 260-375. Harvest barges traded today at 400-500 for SEP and 490-510 for OCT.

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 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 Eric or Dave at 800-622-7937, Shon at 573-667-9921 or 768-0489.

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:

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.

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Morning Comments-Friday July 22, 2016

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