USDA Report

August 14, 2015 Leave a comment


USDA raised its average corn yield forecast to 168.8 bushels per acre from its previous projection of 166.8 bushels.  The average soybean yield increased 46.9 bushels from USDA’s previous of 46 bushels.  No changes seen in corn acres planted/harvested, however there was a reduction in beans planted acres of -800,000 and harvested of -900,000.

Corn ending stocks for 2015-16 came in at 1.7 BB, up 114 million bushels from last month’s estimate.  Soybean ending stocks for 2015-16, at 470 mb, were up 45 mb from last month.  USDA estimated ending stocks for 2014-15 at 240 mb

 

Market reaction was incredibly negative, New crop beans nearly hitting limit down, all in just a few minutes.

 

Currently the markets are (12:12pm)

Dec Corn -21 @ $3.66 ½

Nov Beans -62 ½ @ $9.09

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Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

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Market Report

August 11, 2015 Leave a comment


Sept Corn +16 ½ @ $3.89 ¼ 

Dec Corn +16 ¼ @ $4.00

Aug Beans +29 ¼ @$10.38 ¼ 

Nov Beans +23 ¾ @ $9.87

 

Today’s report will be to the point, as I plan to release more information following the USDA report this Weds.  I will also add you can watch for my blog entry tomorrow on CVA’s blog page.  You can read mine along with weekly entries from our very own grain and agronomy teams.  Found here:http://www.cvacoop.com/blog/

 

USDA Report: Report is Weds at 11am.  Corn is currently estimated at 166 bushel yield estimate for corn, and 46 for beans.  The trade is expecting to see a bit of a reduction around -1.0 to -1.5 bushels for both corn and beans.  A reduction more than 1.5 bushels would likely provide a bullish response.  Keep in mind the funds continue to remain long despite the downturn in the market.

 

Corn/Beans Strategy – Consider placing offers pre-report to capitalize on any report volatility.  Something like a $4.25 Dec ’15 Corn, or $4.35 Dec ’16 Corn.  Look at limit up type orders for beans $10.50-$10.60 for Nov ’15 Beans.

 

Basis – Be looking at basis opportunities, if the board continues to rally, basis may weaken (go down).

 

For Fun – Everyone that has had lunch with me will hear me order a Diet Pepsi….and when the waitress says “Diet Coke okay?”  I quickly say no thank you, Ice tea please.  I think my manager chuckles each time.  To me they are so different, and this coming from a guy that eats everything……

 

Pepsico Inc recently announced it is going to change its recipe for Diet Pepsi, to exclude aspartame.  Pointing out public concern over this specific type of artificial sweetener.  They are looking to go to more diet friendly sweeteners such as sucralose and acesulfame potassium.  The new Diet Pepsi will be out next week.  So go stock up on the original if you like it.

 

You have to listen to your customers, and you have to try it, but….but remember in 1985 when Coca-Cola rolled out New Coke….I remember how bad it was, and switching to Pepsi.  After receiving thousands of complaints Coca-Cola switched back to the classic on just  79 days!  So I guess we will all await “New Diet Pepsi” and see how it goes……

 

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

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Market Report

August 4, 2015 Leave a comment


Markets

Dow -70.92
S&P -2.72
NASDAQ -3.92

 

The U.S Stock market opens fairly flat this morning, slipping into the morning.  July has been a rough month for commodities which continue their negative streak this morning.  Copper and Aluminum fall to 6 year lows.

 

Oil opened deep in the red, slipping to levels not seen since March.  Crude’s supply and demand picture looking bearish with China being the second largest oil consumer.  Concerns about the condition of the Chinese economy continues to leave a bearish tone for many investors.

 

Greek share prices plunged today after trading resumed in Athens following a five-week halt.  The Athex Composite earlier today traded as low as about 615, its lowest level in about three years.

 

Grain Markets 9:56am

Corn -2 ¼ @ $3.68 ¼
Dec Corn -2 ½ @ $3.78 ¾
Beans -3/4 @ $9.80
Nov Beans -3 @ $9.37 ¼

 

Weather

Weather this week looks good for crops in the field with temps in the 80’s and a chance of rain each day.

Corn/Beans

It seems the negative direction continues this week.  Primarily concerns of Chinese demand due to economic uncertainty, the continued strength in the U.S Dollar makes South American corn look cheap and potentially hurting U.S Exports, there just doesn’t seem to be a reason to be bullish. In addition, the USDA crop report is coming August 12th.

Weather news could be a factor, however, the weather across the Midwest continues to be a non-event.

 

Strategy:  For those of you currently holding a corn hedge/HTA we are consistently an opportunity to roll from December to March for about 10-11 cents.  If you are planning to carry some of your corn into January or later, now may be the time to lock in the carry.  (Example $4.50 Dec Hedge, roll to March adds .11 = $4.61)

 

Basis:  As the market pushes down, we may see basis opportunities, with harvest approaching, it is going to be time to start watching basis levels, and setting those pre-harvest.

For Fun:

It’s been a year since our trip to Universal Studios, when we had the opportunity to go to “Springfield” and stop by Duff’s Tavern for a “Duff” beer.  No chance of buying one to go, Orlando and Los Angeles are currently the only place you can go get yourself a bottle of the fictitious beer.  Until now…. there was no discussion of making it commercially available, until recently Fox has decided to begin the venture starting internationally!

Quoted below from The Wall Street Journal

“For decades, real beer sellers from Australia to Germany to Colombia have been trying to capitalize on all this fake marketing by putting real versions of Duff Beer into the market—only to be shut down after hearing from lawyers for “Simpsons” owner 21st Century Fox.

But this week, the media giant is entering the Duff Beer business itself—beginning in Chile, with plans to roll out to more of South America and Europe by early next year.

The company has been consulting with a brewmaster to get the flavor just right, and plans subtle packaging with no obvious nods to the TV show—just an exact replica of the cartoon brew that will play like an inside joke for Simpsons superfans.

As for the domestic market, outside of the “Simpsons” section of Universal’s theme parks in Orlando and Los Angeles, no Duff is available in the U.S., but Fox isn’t ruling it out.

“I think there’s potential to have Duff everywhere in the world,” said Jeffrey Godsick, president of the media company’s consumer products division. (21st Century Fox and Wall Street Journal-owner News Corp were part of the same company until mid-2013.)

The global thirst for Duff is understandable. “The Simpsons” is the longest-running scripted series in television history, and so widely distributed that Fox executives say an episode is airing somewhere in the world, at all times, day or night, 365 days a year.”

You can read the rest here http://www.wsj.com/articles/duff-beer-tries-to-tap-markets-outside-springfield-1436553842

 

 

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | C: (402) 380-9855 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

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Market Report

July 28, 2015 Leave a comment


Markets

The big news on Monday was the substantial dip in the Chinese stock market, that trend continued and the 3 day sell of knocks 11% off the Shanghai Composite.  Despite government efforts to reverse the trend, the Chinese stock market continues to decline since peaking on June 12th.

Commodities had a significant sell of yesterday pulling down gold, silver, copper, cotton, soybeans, corn, cattle, and Crude oil futures have continued to slide to a new 4 month low near $47 a barrel, but headed back in to positive territory midday today.

U.S Dollar strengthens again today, as many investors look for the fed to increase interest as early as September.

Ford reported a 46% increase in net income for Q2, logging its largest quarterly profit ever for North America.

 

Grain Markets 12:39pm

Corn -2 @ 3.71
Dec Corn -2 $3.81 ½
Beans +10 ¼ @ $9.71 1/2
Nov Beans +5 ¾ @ $9.39

 

Crop condition was raised from 69% to 70% good to Excellent on corn as compared to last years 75%, and soybeans were left alone at 62% good to excellent as compared to last years 71%

 

Corn

December Corn has lost .73 cents in the last 10 trading days, interestingly enough earlier this month, we went from the current trading level to the contract high in just 13 days.  We have literally went from $3.81 all the way up to $4.54 and back to $3.81 in 23 days.  Talk about a roller coaster ride.  There seems to be a lot of noise and no one is exactly sure what to hear, from a weather scare and flooding, to key fundamentals influencing world carry, Political, and of course the macro markets.  It seems they are all competing for attention.

A new gap was created yesterday.  We now have 2 gaps in the Dec ’15 corn contract, from a technical perspective we may see corn continue to trend down into contract lows prior to retracing those gaps.  Keep in mind the gap retracement could be post-harvest.

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Strategy:  As the market dips, and affordable way to participate in upside potential on sold bushels is a simple “buy back strategy” utilizing options.  Which keeps capital risk low.

 

Beans:  Uncertainty in China w no doubt caused a lot of pain for the bean market yesterday seeing a 30 cent drop on Monday in Nov beans.   A bit of a turnaround Tuesday feel today though as beans gained at the open, but only up 5 cents at noon.  Beans are feeling a lot of pressure from the macro markets, fear of Chinese demand and the US Dollar making South America more appealing to international buyers.

 

Strategy: Beans may be a painful ride down, lock in a sale at a profitable level either cash or utilizing an HTA.  Bonus premium offers may be used to bring the value of the sale up.

 

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | C: (402) 380-9855 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

Filed under News Tagged with , ,

Market Report and South Dakota Sights

July 21, 2015 Leave a comment


Markets @10:50am

Dow +27
S&P +2.26
Nasdaq +9.90

 

U.S. stocks were little changed early Monday following a batch of better-than-expected earnings from companies such as google (jumping 16.3%) and Hasbro (jumping 5.8%).  Investors turned their attention to a stream of corporate earnings reports from several large companies this week.  The Nasdaq ended at a record level on Friday, Gaining 46.96 points, or .9%, to 5210.14.  Googles surge is to blame posting their 3rd largest daily gain ever.

 

The U.S. Dollar rose to its highest level as compared to the Euro in nearly 3 months on Friday, likely due to the continued discussion of the feds interests rate hikes later this year.

 

Gold Hits 5 Year Low

Gold tumbles, hitting 5 year low at the open today after 23 days of steady decline.  Gold likely weighed down by the U.S Dollars continued gains and the continued concern of the first U.S interest rate increase in more than 9 years.  While some analysts believe the down trend is the market taking advantage of low liquidity as opposed to actual fundamentals.

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Grain Markets @ 10:51am

Sept Corn -7 ½ @ $4.12 ¾
Dec Corn – 7 ½ @ $4.23 ¾
Aug Beans -6 @ $10.08 ¾
Nov Beans -6 ½ @ $10.00 ¼ 

 

A weaker start to the open this week due to favorable weather through the Midwest.  Fridays CFTC report showed spec funds long 130k corn, and just over 80k beans, the funds are liquidating some of these positions today causing some market negativity.  Also expecting crop ratings report out this afternoon, not looking to see much of an adjustment.

 

Corn – With today’s low landing right at the 20 day moving average we are likely to see some support in the $4.21 area for Dec Corn.  The next support line would fall at $4.10.  I will also mention there was a “Gap” at the open, many technical analysts believe there is almost always a gap retracement.  If that holds true we should see ourselves back to at least $4.29 ¼ in the short term.

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Beans opened very weak this morning below $10, but have gain back most of what was lost on the overnight by mid-morning.  The story in beans may not play out until August when USDA resurveys Arkansas, Missouri, and Kansas.  The trade believes we may see USDA reduce yield estimates by a few bushels.  Until then it seems Nov Beans will continue to see support at $9.80 and resistance at $10.30 giving us a wide trading range, until we get some news sending us one way or another.

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For Fun: Just returning from a vacation in South Dakota, I took the family to see some of the most impressive marvels of nature starting with the Badlands, the Needles, Sylvan Lake, Custer Park and even crystal cave.  Then of course Mt. Rushmore, something that many of us have seen but forget how truly amazing the process of making it was.  All done through private funding, this is not likely ever seem something of this magnitude in our lifetime being built.  Mt. Rushmore cost $989,992.32 to build, taking 14 years to complete, with over 400 workers to complete, there was not one single death.  Despite the fact that I have been there many times, it was the first with my boys.  It was a fun and affordable trip.

 

That said, there are so many things to do in the midwest over a long weekend, things we easily forget about, its easy to get caught up in the hustle and bustle of everyday life, or fixate only on glamourous trips.  When there are some great things our children have never seen right here in our back yard!  I will add the liesure trip and lack of internet…gives a lot of time to learn about your family, and hold a lot of conversations you may not ave had otherwise.

 

Top 10 places to go in the Black Hills
http://www.midwestliving.com/blog/travel/top-10-things-to-do-with-kids-the-black-hills/

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Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | C: (402) 380-9855 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

 

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Market Report

July 14, 2015 Leave a comment


Sept Corn +2 ½ @ 4.37 ¼

Dec Corn+3 ¼ @ 4.48 ¼

Aug Beans +3 ½ @ 10.35 ½

Nov Beans _4 @ 10.26 ¼

 

Grain Markets:

It feels like there is so much to talk about with the 180 degree shift in fundamentals on June 30th after the release the USDA stocks report.  before the dust settled, anticipation of yet another report caused new buyers to enter the market giving us a nice rally starting Thursday last week.  The trade felt the July 10th USDA Supply and Demand report would provide a reduction in yield expectations.  However the USDA left yields unchanged.  This would be seen as negative, but the buyers still came, posting new highs in December corn reaching the contract high of $4.49 and November Soybeans reaching $10.36.  It seems buyers really want to buy, despite somewhat negative news.  This is quite a shift from just a few weeks ago when there was record selling.  Looking forward, many traders are still confident we will see a yield estimate reduction in the USDA August report.

 

To summarize Friday’s report charts provided below:

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*Yield was left unchanged, but will be updated in the August S&D report
**Acres were pulled from the June 30th Planted Acreage report 

 

It always feels better when we are in a bull market……when buyers keep grain supported.  We are still seeing some weather still remains our primary focus as well which continue to add premium to grain prices.  Hopefully this will continue to push the bullish excitement and provide more selling opportunities moving forward.

 

Strategy: It seems a shame not to reward such a nice rally with a sale.  With the strength in the market, and question of what is yet to be seen as far as market potential, it may be wise for producers to look at using some sort of floor strategy to protect the bottom, yet participate in upside potential.

 

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | C: (402) 380-9855 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

Filed under News Tagged with , ,

USDA Report

July 13, 2015 Leave a comment


image001

image002

*Yield was left unchanged, but will be updated in the August S&D report

**Acres were pulled from the June 30th Planted Acreage report

 

CORN

The friendly June 30th Stocks report allowed the USDA to raise old crop feed demand 50 mbu this month. Combined with increases in ethanol (+25 mbu) and exports (+25 mbu), improved demand shrunk the 14/15 carryout by 97 mbu. The new crop balance sheet saw the USDA leave yield estimates unchanged, noting that updates would be available in their August 12th report. Acreage numbers were pulled from the June 30th acreage report, so the reduction in harvested acres allowed production estimates to decline 100 mbu for new crop corn. New crop demand projections saw feed (-25 mbu) and exports (-25 mbu) reduced, while ethanol added 25 mbu. The net effect was a reduction to the new crop carryout of 172 mbu – the market was looking for a little bit more. Our Take: The market is trading its own yield ideas right now, so the USDA leaving their number unchanged had little impact to the trade. It will be difficult to get an accurate feel on the national yield until we see the USDA’s thoughts on August 12th. Until then, crop ratings and the weather forecast through pollination will dictate whether we go higher or lower. The funds are supporting the market right now, which continues to push corn higher.

 

SOYBEANS

The old crop soybean balance sheet saw demand continue to work higher with crush and exports each adding 15 mbu on Friday. The June 30th stocks report confirmed a tighter soybean situation that some suspected, which resulted in a 44 mbu increase to residual demand. This essentially means that the USDA overestimated the size of last year’s crop and they are accounting for it here. The result was a 75 mbu reduction to the old crop carryout. New crop saw acreage ideas come straight across from the acreage report in June, while yield was left untouched and will await August revisions. The higher acres from June bumped production higher (+35 mbu), but a smaller carry-in and an increase to crush demand (+10 mbu) led to a net reduction in the carryout by 50 mbu. However, at 425 mbu, the estimate was higher than pre-report thoughts. Our Take: The soybean market has acreage and yield questions right now, even after the updated acreage numbers in June. Until the USDA updates their thoughts on both of these categories, the market should stay supported. There seem to be too many question marks with soybeans right now to push them aggressively lower. 

 

At the close of trading today:

CORN:   +6’0                       $4.34’4

SOYBEANS: +4’0               $10.30’2

WHEAT: -8’0                       $5.71’2

 

 

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | C: (402) 380-9855 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

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Market Report

July 6, 2015 Leave a comment


Markets 10:11am

Dow -36.54
S&P -3.83

Nasdaq -5.25

 

U.S. stocks fell today after Greeks resoundingly rejected creditors conditions for further financial aid, pushing their country closer to bankruptcy and a potential exit from the Eurozone.

 

Grain Markets @ 10:02am

Sept corn -6 @ $4.22

Dec Corn -6 @ $4.31 ¼

Aug Beans -15 ¾ @ $10.22 ½

Nov Beans -15 ¼ @ $10.15

 

June 30th report last week proved the market had been trading higher stock levels, once the USDA showed a reduction in the stock number the market reacted in a VERY positive fashion seeing levels in both corn and beans that we haven’t seen since late Dec ’14.  This rally on top of the strength we were seeing a week and a half prior due to weather concerns, and planting condition.  With the strength we saw, one might think there was a bit of an overreaction and that we may see some pull back, at least in the short term.

 

The post report rally filled many offers, including the “High Price Offer” strategy I mentioned last Monday making offers just under market limits (New crop corn had a $4.32 limit, and New crop beans at $10.40 limit) both corn and beans hitting those levels the following day.  No one could predict the outcome, but you can definitely prepare for it with offers.

 

Strategy: I am sure many folks rewarded the rally/gift and made some sort sale.  While the market is up in some fashion, another strategy would be a minimum price contract or floor strategy, this is a less expensive way to protect your downside risk, but keep upside potential.  Look at it as insurance.

 

Weather: still remains a significant factor, and continues to add upside potential to the grain market.  However, weather is unpredictable and it could just as easily give us some sunshine and a break in the rain.   In this case the market will quickly remove the weather premium, and take back some of the strength we have been able to capitalize on.  As long as the rain keeps coming we are likely to continue to see weather premium.

 

Last ProEdge meeting is tomorrow at Hooper Fire Hall @ 9am if you are interested in attending

 

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | C: (402) 380-9855 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

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Market Report

June 30, 2015 Leave a comment


At market close

Sept Corn – ½ @3.92

Sept Beans -3 ¼ @ 9.94 ½

 

Morning markets opened strong and remained strong for most of the morning, but finishes in negative territory.  This afternoon  we saw Crop Ratings Good to Excellent fall 3% in corn and fall 2% in beans,  which was in line with expectations.

 

Likely to see some positioning or a two sided trade as we approach tomorrow morning ‘s 11 AM USDA Crop Report.  More info to come via email tomorrow post report.

 

The trade continues to focus on weather as the primary story.

 

Strategy: If you need to make a sale, reward the rally, in addition, make a high priced offer to cash in on potential report volatility.  Example of a high price offer is $4.30 for Dec corn ($4.32 is limit up)

 

Invitation:

ProEdge Grain Marketing meetings are available post report, I will be discussing the current market info along with Russ and Dave at these events below.  “Coffee with the ProEdge team”

East Hub July 1st 9am

West Point July 2nd 9am

Hooper Fire Hall July 7th 9am

 

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | C: (402) 380-9855 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

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Market Report

June 22, 2015 Leave a comment


Markets 11:59am

Dow +104.76
S&P +13.98
Nasdaq +34.48

U.S. stocks advanced into positive territory today, lifted by gains in health-care and financial shares as well as optimism that Greece will eventually reach a bailout deal with its creditors.

 

Grain Markets 11:59am

July Corn +5 @ 3.58 ¼ 
Dec Corn +3 ¾ @ 3.72 ½ 
July Beans +16 ¾ @ 9.88 ¼ 
Nov Beans +17 @ 9.56 ¾ 

 

Very refreshed after seeing some good strength in grains last week, Friday provided a bit of negativity as people took some profits for the weekend.  This morning we opened a bit weak for corn this morning but eventually joined the beans in positive territory after 10am.  Most impressive is the 17 cent rally we are seeing yet again today in beans, giving farmers more opportunity to make a sale if need be.  Funds are currently net sellers in corn, and covering shorts in the beans.

 

Corn – USDA report today, last week crop condition dropped 74% good to excellent down 1% to 73%.  We may see this yet again.  Might give us a bit more strength in corn for the near term.

 

Beans – USDA report today, look to see 90% planted, with some planting delay, talks once again of Argentine Strikes, and political uncertainty in Argentina, we may continue to see some strength for a bit as short covering continues.  Resistance lines may still be difficult to break to get major movement. 

 

 

Greg Mockenhaupt

ProEdge Risk Management Consultant 

P: (402) 685-5613 | C: (402) 380-9855 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

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