Market Report

March 5, 2016 Leave a comment


Dow +37.63
S&P +4.64
Nasdaq +17.34
U.S. stocks rose today, keeping them on pace to finish February higher after steep declines in January. The Dow Jones Industrial Average gained 72 points, or 0.4%, the S&P 500 climbed 0.5%. The Nasdaq Composite was up 0.6%. The Dow was on track for a 1.5% gain in February after losing 5.5% in January, putting its year-to-date loss at around 4%.

Oil prices rose today on signs that U.S. drilling activity is hitting new lows.

Despite plummeting oil prices in the past year and a half, global crude output has increased as production in the U.S. remained high and the Organization of the Petroleum Exporting Countries has opted keep pumping at a fast clip. The global crude-oil market is expected to remain oversupplied through the rest of the year. Interesting to note that the nation’s stockpiles have risen to the highest in more than 8 decades!

Grain Markets 12:14pm
Corn-1’0 @ 3.53’4
Beans-1’4 @ 8.53’4

Choppy grain markets to start the week out. After attempting to close positive for the month, at midday we’re stuck in negative territory.

USDA Outlook Forum last week stuck a negative tone with lower 2016 price forecasts on heels of slowing global growth, a strong dollar, weakening Chinese import growth and adequate stocks.

Export inspections out this morning were lackluster and as expected. Corn at 29 mbu (26-31 exp); Beans at 38.5 ( 37-59 exp) and wheat at 13.7 (10-15 exp).

1,000 bushels

U.S. stocks rose today, keeping them on pace to finish February higher after steep declines in January.  The Dow Jones Industrial Average gained 72 points, or 0.4%, the S&P 500 climbed 0.5%. The Nasdaq Composite was up 0.6%.  The Dow was on track for a 1.5% gain in February after losing 5.5% in January, putting its year-to-date loss at around 4%.

Oil prices rose today on signs that U.S. drilling activity is hitting new lows.

Despite plummeting oil prices in the past year and a half, global crude output has increased as production in the U.S. remained high and the Organization of the Petroleum Exporting Countries has opted keep pumping at a fast clip. The global crude-oil market is expected to remain oversupplied through the rest of the year.  Interesting to note that the nation’s stockpiles have risen to the highest in more than 8 decades!

Grain Markets 12:14pm

Corn-1’0 @ 3.53’4

Beans-1’4 @ 8.53’4

 

Choppy grain markets to start the week out.  After attempting to close positive for the month, at midday we’re stuck in negative territory.

 

USDA Outlook Forum last week stuck a negative tone with lower 2016 price forecasts on heels of slowing global growth, a strong dollar, weakening Chinese import growth and adequate stocks.

 

Export inspections out this morning were lackluster and as expected.  Corn at 29 mbu (26-31 exp); Beans at 38.5 ( 37-59 exp) and wheat at 13.7 (10-15 exp).

 

1,000 bushels       CURRENT MARKET YEAR PREVIOUS MARKET YEAR
     ———– WEEK ENDING ———-
GRAIN 2/25/2016 2/18/2016 2/26/2015 TO DATE TO DATE
   
BARLEY             –             –           151        1,364        6,918
CORN      29,038      35,778      50,454     581,087     731,718
FLAXSEED              1              1             –           162           239
MIXED             –             –             –             –             –
OATS             –             –             –           117             13
RYE             –             –             –             –             –
SORGHUM        4,279        8,547        8,063     203,022     187,531
SOYBEANS      38,538      56,887      23,908  1,413,634  1,540,392
SUNFLOWER             –             –             –              1             –
WHEAT      13,666        9,910      17,665     543,594     624,569
Total      85,522     111,123     100,241  2,742,979  3,091,379

 

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

February 23, 2016 Leave a comment


Markets
Stocks rekindled their rally this morning, spurred by rising commodities prices and upbeat data from China. Twenty-eight of the 30 components in the Dow industrials rose, from battered financial and technology stocks to better-performing consumer companies, pushing the index into positive territory for the month. The Dow gained 221 points, or 1.4%, to 16612. The S&P 500 rose 1.3%, while the Nasdaq Composite gained 1.5%.

Oil prices surged this morning on expectations of an accelerated decline in U.S. oil production. Booming U.S. oil output due to new shale oil drilling technologies helped push the global crude market into oversupply in mid-2014 and sent prices plunging. Since then, domestic output has remained more resilient than many investors and traders expected. U.S. companies sharply cut spending on new drilling, but they also got more efficient and lowered their costs.

Gasoline futures recently rose 4.2% to $1/gallon. Diesel futures rose 3.3% to $1.0596 a gallon.

Grain Markets @ 12:10pm
Mar Corn +2’0 @ 3.67’4
Mar Beans +4’4 @ 8.82’6

Seeing some overnight strength in grain, led by the Beans, to the surprise in option expiration that was seen, where 200+ SH 8.80 calls that were out of the money were assigned and over 8,000 SH 8.80 puts that were in the money by almost 2 cents, were NOT exercised or abandoned, which caught those short puts off guard and forced then to step in to buy Beans overnight and today. Which could be partially to blame for today’s strength.

Also important, as mentioned above, the strength in Crude Oil and World equity markets, notably the US Stock market now up 200 points, we potentially have a tailwind in grains.

USDA 2016 Ag Outlook Forum this Thursday and Friday is the first detailed estimate of new crop acreage and production. You can head over to USDA’s Website to get additional details and subscribe to real time updates. http://www.usda.gov/oce/forum/

USDA released the “Farms and Land in Farms report recently. You may find it interesting. The link is below. I have attached a chart from the report showing the average farms size is getting larger, while the number of farms is dropping.
There are state specific numbers, but saw this information as interesting.

Click to access FarmLandIn-02-18-2016.pdf

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Exports

EXPORTERS SELL 100,000 METRIC TONS OF CORN FOR DELIVERY TO COLOMBIA DURING THE 2015/2016 MARKETING YEAR – USDA

Last Week

 

Friday 2/19

EXPORTERS SELL 101,600 METRIC TONS OF CORN FOR DELIVERY TO JAPAN DURING THE 2015/2016 MARKETING YEAR – USDA

Thursday 2/18

EXPORTERS SELL 106,162 METRIC TONS OF CORN FOR DELIVERY TO COSTA RICA DURING THE 2015/2016 MARKETING YEAR – USDA

Tuesday 2/16

EXPORTERS SELL 190,000 METRIC TONS OF CORN FOR DELIVERY TO COLOMBIA DURING THE 2015/2016 MARKETING YEAR – USDA

 

Weather

Plains are wetter in west central areas in the 6-10 day period. Showers in southern areas early this week will improve moisture for wheat.  Temperatures should cool a bit this week, but should still be above normal in most areas. The 6-10 day outlook is wetter in west central areas. A chance of snow on Weds evening here in Nebraska.  While the Eastern Corn Belt is expecting heavy snow.

 

Weather continues to be a non-event as soil moisture levels are seen as nearly full throughout the growing region.  With the latest imagery showing drought completely absent from the Corn Belt, with hardly any dry patches to speak of.

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Insurance:  As we approach the crop insurance sign up deadline, I wanted to share with you a couple of things to consider discussing with your agent.

  1. Yield Exclusion, this is the opportunity to exclude 2012 from your APH.  This only makes sense if 2012 is dragging down your APH and reducing your insured levels.  If you happened to have decent performance in 2012 it may not make sense to exclude it.  However in most cases, exclusion is very beneficial.  (RMA determines which crop year yields are eligible for exclusion by county.)  Discuss this with your agent to see what makes sense for your operation.
  2. Common Land Unit Reporting (CLU), beginning ’17 CLU reporting will be a requirement to obtain insurance.  This consists of reporting by farm number, tract number, and field number.  This new requirement for ’17 will require additional paperwork.  It may be wise to discuss this with your agent so you can begin preparing ahead of this time next year.

Insurance Seminars:  ProEdge in cooperation with The Home Agency has been offering educational seminars on crop insurance options, and marketing.  That said, we will be wrapping these up with one final opportunity this Friday Morning at the East Hub in Oakland, holding one at 8:30am and another at 10:00am RSVP required.  Friday afternoon we will be holding the same seminars in Hinton, IA.  Please contact me for more details or to RSVP.

 

For Fun:

In The Wall Street Journal last week there was an article about the U.S. Government is looking to eliminate the $100 bill, and even considering the $50 bill. While Benjamin Franklin wouldn’t immediately lose his place on the face of American money, no new $100 bills would be issued under Mr. Summers’s plan.

 

The last time the U.S. clamped down on large-denomination bank notes was 1969, when the Fed and Treasury discontinued issuance of $500, $1,000, $5,000 and $10,000 bills.

 

All of this in an effort to reduce “illegal activity”.  Much of the illegal activity facilitated by cash might have less to do with drugs or prostitution than with mundane tax avoidance. This type of activity has been dubbed the “gray economy” or “shadow economy.” The activities themselves aren’t illegal at all—painting a house, receiving tips at a restaurant—but conducting the transaction in cash makes it easy to avoid paying taxes on it.  I think this is really what it comes down to.

The Internal Revenue Service has published periodic estimates of how much income it thinks goes unreported: Its most recent estimate, for the year 2006, estimated that $385 billion in taxes should have been collected but went unpaid. The government’s deficit that year was only $250 billion, meaning that the so-called tax gap is so large it could make the difference between deficit and surplus in some years.

Article found here http://www.wsj.com/articles/the-plot-to-kill-the-100-bill-1455667926?mod=e2tw&cb=logged0.6661449681590577

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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

 

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Market Report

February 11, 2016 Leave a comment


Markets 10:25am 2/8/16

Dow -371.49
S&P -43.72
Nasdaq -125.83

Wall Street is having another rough day as the Dow is down more than 300 points in early trading amid a fresh slide in oil prices below the key $30 per barrel mark and continued fears about slowing global growth.

The rocky start to 2016 for stocks looks set to continue as investors contend with well-known yet persistent headwinds ranging from continued price declines in oil, concerns about the impact of China’s slowing growth on the U.S. and other world economies, and questions surrounding the timing of interest rate hikes from the U.S. Federal Reserve.  A Sunday meeting between Saudi Arabia and Venezuela ended without any plans for production cuts, damaging hopes that the world’s major exporters will cooperate on output cuts.

In the ethanol, we have RBOB gasoline trading -45 cents cheaper than ethanol futures, which is not promising for ethanol.

image001

Grain Markets 10:28am 2/8/16

Mar Corn -1’4 @ 3.64’2
Mar Beans -3’0 @ 8.64’4

 

USDA Report on Tuesday 2/9/16 at 11:00am

 

Funds:  An interesting topic is the funds short position.  I mentioned 1/11 the funds were record short, and I also mentioned my concerns on 1/18 seen below:

 

“shorts will have to cover at some point and we may have a shot at a bear market rally.  Manage your risk and be prepared for the unknown.  Spec funds have added 150,000 new shorts since Dec 16th.  With everyone suggesting we “Sell the rally’s” the farmer is likely to hold pricing down as they sell these bounces.  With farmers long the physical, and funds short the board a chance at a significant rally will be difficult without a major story.  I am not saying we cannot have a rally in a bear market, just that it will probably be short lived as farmers look for opportunities to move grain.  This makes short covering an easy proposition for the funds, versus making the funds over pay and driving up price.”

 

On Jan 26th the net fund position on corn dropped from -160,153 to -91,929.  The short position continued to decrease until just a couple of days ago.  Currently estimated at -84,788 as of Friday.  Looking at the charts below the orange line represents manage money/funds.  Note that historically the funds are still very short.  This represents an opportunity in the event of a scare causing a rapid short covering.  Notice in the charts below, when funds cover, they historically do it in a big way.  Keeping in mind my comments from 1/18, a slow short covering may not be as supportive to the grain market.

image003 image002

Recommendations:  After the USDA report, ProEdge will be releasing official client recommendations.  Expect to see this information late next week via email.

 

Weather:image004

It looks to remain cold through President’s Day then trending warmers in the 11 to 15 day.

image005

For Fun:

The Denver Bronco were victorious defeating the Carolina Panthers 24 to 10 in the 50th Super Bowl.  Highlight video seen here:https://youtu.be/DR0qOk_pcyg

 

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

January 27, 2016 Leave a comment


1/25/16 @ 9:35am
Dow -62.29
S&P -10.98
Nasdaq -13.12

 

Grain Markets

 

1/25/16 @ 9:37am
Mar Corn +0’4 @ 3.70’6
Mar Beans-0’6 @ 8.75’6

 

A special treat for you this morning, Luke Beckman ProEdge Grain Sales Manager commenting on current markets below on Market Journal.  Luke covers the current climate in detail, and I have nothing to add.

https://www.youtube.com/watch?v=18ozZcG_TSE&feature=youtu.be

 

Weather

Massive Blizzard blankets east coast, hitting as much as 30 inches in some states, 60 million people under storm warning, 250,000 without power, at least 30 dead, 12,000 flights cancelled, travel ban in NY, 11 stated declared State of emergency.

image001

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

January 20, 2016 Leave a comment


Market corn +1 @ 3.69
Market beans -7 @ 8.66

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Market Report

January 12, 2016 Leave a comment


Markets 1/11/16 11:57am

Dow -13.28
S&P -7.73
Nasdaq -33.54

 

Oil dropping aggressively this am.  Oil prices dropped another 10% last week, sitting at 12 year lows.  Current low 31.55, looks as if oil in the 20’s is reachable.  Especially since oil companies have been producing about 1 million barrels per day more than is used.  Total US inventory is 25% more than last year this time.  Laws of supply and demand rule, and with a glut of oil like this, crude will be hard pressed to do much of anything but move down, and reduce profitability for ethanol and crush processors.  I wonder if government “bail outs” are in the future for U.S oil companies.

 

Grain Markets 1/11/16 11:58am

March Corn -7’2 @ 3.49’6
March Beans-5’0 @ 8.60’2

 

USDA report around the corner, much of what I tell you will soon be tested as of tomorrow.  I will add funds are very short, so a friendly surprise could cause short covering.  At some point funds will have to cover, hopefully this gives us a selling opportunity.

 

USDA announced some sales this morning – 120 T of beans to China and 248 T sold to unknown in 15/16 and; 152 T of corn sold to unknown in 15/16.  This helped the beans rally after the morning break but they are currently struggling.

 

Corn – The fact that $3.50 has held on nearby corn is a good thing.  Though it broke, it never held.   We are making a run at $3.50 again this am, and the continued pressure makes it appear less and less likely to hold.  Oil prices continue to pressure ethanol producer margins, exports are behind pace.  As the market trickles down, basis values firm up.  Giving producers an opportunity to get some basis levels set on old crop hedges, or basis contracts for future deliveries.

 

Beans – Exports behind pace and the USDA is likely to adjust.  Current record yield could be pushed higher thus increasing ending stocks.  Economic uncertainty in China certainly doesn’t help the export picture, nor does the strong US Dollar.  In general the trade expects a bearish report, so the questions is, is the news already built in?

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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

January 5, 2016 Leave a comment


Markets

1/4/16@10:33am
Dow -432.62
S&P -48.21
Nasdaq -145.65

Global stocks started 2016 with a sharp selloff as fresh signs of economic slowdown in China deepened fears about global growth and lowered hopes for a better year.

The Dow Jones Industrial Average declined 351 points, or 2%, to 17074 shortly after the market opened, while the S&P 500 dropped 1.8% and the Nasdaq Composite fell 2.2%.

Weaker-than-expected manufacturing data and a falling currency triggered a 7% fall in mainland Chinese stocks that led authorities to halt trading there before the end of the session.

Meanwhile, rising tensions in the Middle East added to bearish sentiment across markets and sparked volatile trading in oil, offering a further glimpse of the themes investors say are likely to influence markets this year.

Grain Market

1/4/16@10:30am
Mar Corn -6’4 @ $3.52’2
Mar Beans -8’0 @ $8.56’2

The above political stories are causing negativity in the markets this morning.  The question of the day is will $3.50 hold on March Corn?  That will be the thing to watch today.

Corn

Brazil exported 27.1 million metric tons of corn this year as of the third week of December, setting a new record according to Cepea. Surpassing the previous (2013) record by ½ a million metric tons.

Corn basis levels firming as producer has gone quiet with corn making new lows almost every day last week and making new contract lows this morning pushing down to $3.50 on March Corn by 10:00am.   We continue to have strong support at the 3.50 level.  Producers like to move grain/core bins in Jan, so we may see some grain movement.  But will it be a sale, or price later?  Since we have seen basis improvement as the market declined, I see some real potential here for additional basis improvement in the short term as the market continues to make new lows.  Especially if the market breaks $3.50, processors are going to have to pay up, or growers won’t crack the bins.

 

Beans

China’s struggling economy hits soybeans this morning as concerns for Chinese demand continue to be a concern, Bean basis steady to a touch firmer but processors are reluctant to add to ownership with margins suffering.  Meal weighing on crush values with margins not seen since 2013.  So as we may see some basis improvements, I don’t see as much opportunity short term as we do for corn.

 

EXPORTERS CHANGE DESTINATION OF SALES OF 217,000 TONS OF SOYBEANS FROM UNKNOWN DESTINATIONS TO THE NETHERLANDS FOR 2015/16 DELIVERY – USDA

Weather

Winter storms in the Midwest have sent excess amounts of water in rivers causing flooding in Illinois, Missouri and Arkansas and cities down steam.  It is forecasted to compare to the 1993 floods which caused $15 billion in damage and many deaths.

image001

Greg Mockenhaupt

ProEdge Risk Management Consultant

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

1007 County Road O

Oakland, NE 68045

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Market Report

December 29, 2015 Leave a comment


Markets 11:56am 12/28/15

Dow -86.91

S&P -11.93

Nasdaq -31.41

 

Macro – After a pre-holiday jump, crude prices are down over $1 to sub $37/barrel. The dollar is unchanged to start the week.

 

Grain markets 11:55am 12/28/15

March Corn -3’4 @ 3.60’0
Jan Beans -9’4 @ 8.65’6

Mar Beans -11’0 @ 8.62’0

 

Grain had low volume overnight and lower to start the day on improving rain in dry areas of N Brazil, and less rain in the wettest areas of southern brazil.

 

Basis improvements have been posted around the area this week, I suspect we will see basis improvements if the board continues to remain low.

 

Export inspections out this morning has corn at 22.5 mbu (22-27 exp); beans at 51.5 (48-59 exp) and wheat at 11.2 (10-15 exp).

 

March 2016 corn futures closed at $3.64 ½ on Thursday, the lowest settlement price for the life of the contract.

 

First notice day on Jan beans is Thursday. 

 

 

Weather

Weather problems across the US to start the week out.  Southern tornadoes, flooding in much of the corn belt, and snow in the rest.

image002

Greg Mockenhaupt

ProEdge Risk Management Consultant

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

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

Filed under News Tagged with , ,

Today’s Market Report

December 21, 2015 Leave a comment


Markets 12/21/15 10:00am
Dow +82.95
S&P +11.97
Nasdaq +32.90

 

Crude recently hit 11 year lows on this morning as oil companies continue to aggressively stock pile supplies.

 

Grain Markets 12/21/15 9:58am
Mar Corn -3’4 @ $3.71’0
Jan Beans -3’2 @ $8.89’0

 

Commodities in general are negative, and the time of year does exactly help us.  But there is definitely some good news.  Gas prices are now at a 6 year lows averaging 1.955 per gallon nationwide.  This is the first time in six years that the national average has fallen below $2 per gallon.  So the silver lining is the opportunity to hedge your fuel either by using brokerage, or by filling your on farm fuel storage.  By doing so you potentially lock in a savings on a portion of your fuel expenses.

 

Corn/Beans nothing new to add for this partial week.  With Christmas upon us I would expect to see heavily reduced trade volume this week.  Not likely to see any opportunities present themselves until after the first of the year.  We continue in the tight range bound range I seem to mention every week.  Negativity does not seem to shake the markets, however positive news sure could.  So lets wait for the headline.

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For Fun – According to a Gallup poll, Americans plan to spend $830 on Christmas gifts this year on average, up from $720 last year.  Although the average amount all Americans expect to spend is $830, the figure rises to $908 when excluding those who won’t spend anything.   In other words eliminating the people who do not shop for Christmas.

Christmas spending intentions vary greatly by household income. Americans living in households earning $75,000 or more per year plan to spend an average of $1,227 on Christmas gifts this season. This drops to $786 among middle-income earners and to $460 among those earning less than $30,000.

http://www.gallup.com/poll/186620/americans-plan-spending-lot-christmas.aspx

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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

 

Filed under News Tagged with , ,

Today’s Market Report

December 14, 2015 Leave a comment


Markets 12/14/15 @ 9:55am
Dow -45.03
S&P -6.19
Nasdaq -21.56

 

Outside markets – Oil dipped below $35 a barrel overnight, but slightly up this am.  The US Dollar remains strong, and is slightly up this am as well.

 

Oil prices tumbled 4 percent on Monday, coming close to their 11-year low, on growing fears that the global oil glut would worsen in the months to come in a pricing war between leading OPEC and non-OPEC producers.

 

Grain Markets 12/4/15 @ 9:53am
Mar Corn +2’6 @ $3.78’0
Jan Beans +3’0 @ $8.73’6

 

Significant news, this morning an announcement by President Macri of Argentina regarding the elimination of export taxes on grains etc / meats along with the reduction  of 5% in the bean tax this year and further 5% reductions until the tax is eliminated.

 

Important Info

  1. December corn contracts expire today.
  2. Grain Adviser is part of my recommendedmarketing plan, sign up ends 12/15/15

Weather

Most growing areas in Argentina and Brazil saw rain, with the exception of Mato Grasso.  Argentina will see rain today and on Thursday.  Brazil is slated to see rains through most of the growing areas this week.  The 6-10 day to see more rain throughout the major growing areas.  So it doesn’t appear there will be a weather story in the near future.

image001

Greg Mockenhaupt

ProEdge Risk Management Consultant

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

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

Filed under News Tagged with , ,

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