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October 27, 2014 Leave a comment
Grains opened weaker this am with additional strength found this afternoon markets closing with beans up 26 3/4 at 10.04, and corn up 10 at 3.63.
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
October 20, 2014 Leave a comment
Producers working steadily in the fields on harvest, with possible rain in the area for Weds. Still some elevators/processors paying additional basis $ for early delivery on corn. Most producers are too busy with beans to deliver corn, so there is a bit of a premium. However this premium will likely disappear once corn harvest begins and corn bushels start rolling in.
Some strength in the market last week was attributed to new buyers in the grain, which could be some re-allocation from the stock market which seems to be suffering some from the politics and the Ebola scare. We lost some of this strength overnight, but seem to remain pretty steady this morning.
Markets @ 9:14am 10/20/14
Corn -5 @ 3.43
Beans -12 ½ @ 9.39 ¼
Marketing idea: On over run bushels/bushels you cannot store on farm. Many producers either sell these extra bushels, or pay monthly storage. A producer can sell the grain and buy it back on the board to remain in the market without paying storage. This strategy mimics storage and saves fees. For more information simply contact CVA.
Risk Disclosure – The risk of loss in trading commodities can be substantial and past performance is not necessarily indicative of future results. Therefore, you should carefully consider whether such trading is suitable for you or your organization in light of your financial condition. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples. Neither the information, nor the opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts.
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
October 13, 2014 Leave a comment
Markets opened mixed this morning after digesting Friday’s USDA report. But finding strength by the close. The trade is wondering where this is coming from. It seems to be more than just the fact that this is a US holiday, with light volume expected, we have actually seen volume pick up a little with the rally building.
Stock markets have come off their highs and might have some asset managers moving some money into other sectors for now, possibly even these much cheaper grain markets? Also with the US dollar losing some strength we may see more foreign buyers.
Markets at close
Corn +12 @ 3.46
Beans +22 ¾ @ 9.45 ¼
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
October 6, 2014 Leave a comment
Markets as of 10/6/14 @ 8:48am
Corn +4 ¾ @ 3.28
Beans +16 @ 9.28 ¼
Plenty of cool weather over the weekend, and freezing temps over a large portion of North Dakota and some of South Dakota leaves us anxious to hear of any crop damage reports. Most of the Midwest received some rain over night, which could slow down harvest a bit for those anxious to get started.
Corn saw a bit of a rally overnight, this ride to the downside has been pretty steady, and the bears continue to ride this train. But where is the bottom? There is a point when any hedger/investor pauses for a moment to reflect. They may also decide they are not so sure where the market is headed. This uncertainty is perceived as higher risk, and can cause these folks to thin that risk, or even sit out for a while. In short, if the bears decide to hibernate for a while and cover their shorts, we may see some strength come back into the market and find a bottom. I would not necessarily saying it’s time to go long or to buy anything. After all, we have a huge crop on the horizon. It just seems like it’s time to become a bit more conservative.
Beans also saw a rally overnight, and the story is similar to corn. However the weather concerns for harvest delays are looming. In South America, factors are the elections in Brazil, and concerns of weather delays.
Keep in mind the USDA report coming this Friday.
Risk Disclosure – The risk of loss in trading commodities can be substantial and past performance is not necessarily indicative of future results. Therefore, you should carefully consider whether such trading is suitable for you or your organization in light of your financial condition. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples. Neither the information, nor the opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts.
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
September 29, 2014 1 Comment
Markets 9/29/14 @ 8:40am
Corn +1 ½ @ 3.24 ½
Beans +6 @ 9.16 ¼
Tomorrow the USDA will release it’s Sept Quarterly Stocks Report. Average trade estimates for the report are 1,185 mln bu corn, 126 mln bu beans, and 1,880 mln bu wheat. In light of the focus on the huge US crop being harvested, many are considering this report to be a non-event.
There are reports circulating that the US Dollar Index has risen for 11 weeks in a row. This does not help the price of commodities as other countries lose buying power.
Large yield reports continue to come in, we will likely see some light positioning ahead of tomorrow’s USDA Quarterly Stocks report. It may present a selling opportunity for some.
Risk Disclosure – The risk of loss in trading commodities can be substantial and past performance is not necessarily indicative of future results. Therefore, you should carefully consider whether such trading is suitable for you or your organization in light of your financial condition. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples. Neither the information, nor the opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts.
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
September 22, 2014 Leave a comment
Markets as of 9/22/14 10:48am
Corn -4 @ 3.72
Beans -21@ 9.35 ½
A bearish morning for grains, significantly down on the overnight and the trend continues through today, making new contract lows. Technically, with the new lows, we are closing in on the June , 2010 lows of 324 ½ in corn and 926 in beans.
Pro-Farmer revises their U.S. corn yield up 2.7 bu from previous estimates to 172 bu per acre, and their soybean yield up 1.65 bu to 47 bu per acre.
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
September 15, 2014 Leave a comment
Markets 9/15/14 10:00am
Corn +2 ¼ at 3.40 ¾
Beans +2 ½ at 9.87 ¾
The market has been testing the upside all morning, finally going into the “green” and staying there. Interesting, given the bearish news in Thursday’s USDA report and the lack of frost damage over the weekend, the primary support appears to be demand related.
The bulls hoping to wake up this morning with frost threat Friday/Sat have been disappointed. Most of significant freeze was limited to western North Dakota and far northern Minnesota. IT appears most areas saw more of a soft frost with limited damage to yield potential.
China continues to purchase new crop beans. Thus creating demand to keep prices supported at current levels.
Next week appears to warmer and dry in most areas, moving harvest that much closer.
Risk Disclosure – The risk of loss in trading commodities can be substantial and past performance is not necessarily indicative of future results. Therefore, you should carefully consider whether such trading is suitable for you or your organization in light of your financial condition. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples. Neither the information, nor the opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts.
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
September 11, 2014 Leave a comment
Special Report
This morning the USDA issued their September Supply and Demand estimates for principle crops including corn, soybeans, and wheat. The following tables show a breakdown of the numbers:
Corn:
The USDA left the old crop carryout unchanged leaving all adjustments in the new crop category. Production was up over 300 mbu from the August numbers on a yield increase of 4.3 bpa. These numbers are slightly higher than what many thought the USDA would throw at us for the September report. Fortunately, new crop demand categories increased in the Feed (+75), Ethanol (+50), and Export (+25) categories, resulting in a 14/15 carryout increase of nearly 200 mbu.
Market Reaction: Negative. Regardless of what the USDA was going to say today, many are convinced that the highest production estimates are yet to come. Harvest numbers will confirm the USDA’s thoughts. We would expect our negative trend to continue.
Soybeans:
Old crop soybean carryout levels fell by 10 mbu with higher production expected in new crop. Yield numbers increased by 1.2 bpa resulting in production increases of nearly 100 mbu. Demand categories of Crush (+15) and Exports (+25) increased to partially offset the supply increases. The net result was an increase to the 14/15 carryout by 45 mbu.
Market Reaction: Negative. Similar to corn, the market is anticipating harvest results in the coming month that will confirm the size of the crop. Absent of any freezing weather in the next few weeks, the size of the bean crop looks to grow.
World Stocks:
14/15 World carryout continues to climb, which continues to drive the market into negative territory. World Beans up 4.6, Corn up 2.1 (million Tonnes).
Risk Disclosure – The risk of loss in trading commodities can be substantial and past performance is not necessarily indicative of future results. Therefore, you should carefully consider whether such trading is suitable for you or your organization in light of your financial condition. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples. Neither the information, nor the opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts.
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
September 8, 2014 Leave a comment
Markets as of 9/8/14 8:55am
Dec Corn -9 @ 3.47
Nov Beans -14 ¼ @ 10.07 ¼
Weather
Weather is expected to turn cooler this week. A cold front pushing down from Canada into the Northern Plains for Tuesday and Wednesday bringing our first chance of frost for the season for North Dakota and parts of Minnesota. Many locations will see temperatures 20 to 30 degrees below normal, however the crop threat seems limited, unless the frost pushes further south than expected. With the change in weather comes the threat of thunderstorms thought the upper Midwest as well.
USDA
The USDA report is expected Thursday this week. Many are expecting the USDA to increase yield expectations based on the many analyst reports. Historically USDA tends to make smaller incremental adjustments through the September report, and move the estimates aggressively in the October and November once they have better proof of the yields. We will see on Thursday how aggressive the USDA is with their report.
Corn
Bears await the USDA report this week looking for a significant bump in yield estimates of up to 5 to 7 BPA, which seems pretty hefty, regardless of the size, I think we would all be surprised if there was not some sort of increase from the USDA.
From a technical perspective, if the funds see the projected yields to be a money making opportunity, and the funds choose make sales, it is likely to see the price continue to head downwards.
It may be wise to develop a strategy for new crop bushels that must be delivered out of the field (overage). Once producers bins are full, and crop is delivered out of the field, we may see basis weaken as elevators fill up.
Beans
The story is similar to corn, many await the USDA report to get a feel for where we are headed. And again, analysts believe an increase in yield estimates is likely. The concerns of early frost could cause a bit of a shift in the market. Producers should look to capitalize on any up swings in the market caused by a weather scare.
Risk Disclosure – The risk of loss in trading commodities can be substantial and past performance is not necessarily indicative of future results. Therefore, you should carefully consider whether such trading is suitable for you or your organization in light of your financial condition. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples. Neither the information, nor the opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts.
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
September 2, 2014 Leave a comment
Markets 9/2/14 @10:55am
Dec Corn -3/4 @ 3.64
Nov Beans +11 ¾ @ 10.36
Corn story continues to look the same with estimates talking significant supply. The bears continue to talk about a humongous US crop that is receiving almost perfect weather conditions. Many analysts are still pushing their yield estimates even higher, and many US producers are reporting “better than expected” yields, placing even more downward pressure on prices.
Beans continue to focus on old crop, however bears focus on the longer term picture and that’s the record yield estimates in the US and the anticipated 5-6% additional acres in South America. Which doesn’t paint a pretty picture for new crop prices. I don’t want to sound so pessimistic but we need a technical rally, or some bullish news to change the direction of the market.
Idea – for producers with a current hedge in place, a great way to add some additional dollars to your bottom line is to take advantage of the “carry in the market”
FOR EXAMPLE if the producer can store CORN until June, they can roll from Dec to July and pick up 27-28 cents
What about basis?
The biggest news seems to be current basis levels, as it seems like commercials are having a time sourcing the bushels they need at the current price levels. Pre-harvest bushels have been bid at a premium. However…. come harvest time, old crop bushels and new crop bushels are one of the same and the biggest risk to producers could be the upcoming harvest basis.
Idea – If producers have old crop corn or beans it seems like the perfect opportunity to liquidate some of that stored old crop while basis levels are so strong. The bean basis appears to be the strongest, come harvest times basis levels may slip rather quickly.
For more information contact:
Greg Mockenhaupt
Risk Management Consultant
Central Valley Ag – ProEdge
1007 County Road O
Oakland, NE 68045
Office: 402-685-5613
Cell: 402-380-9855
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