USDA Report


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Greg Mockenhaupt

ProEdge Risk Management Consultant

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

Greg Mockenhaupt

Greg Mockenhaupt

 

 

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

USDA Report


July Corn +10 ½ @ 3.79 ½

July Beans +51 @ 10.77 ½

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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

USDA Report Results


May Corn +3’0 @ 3.59’6
May Beans +1’6 @ 9.30’0

 

USDA Grain, Oilseed Carryout

  14/15 

Carryout

March 15/16

Carryout

Average of Analysts’ Estimates Range of Analysts’ Estimates April 15/16 Carryout
Soybeans 0.191 0.460 0.456 0.415-0.486 0.445
Corn 1.731 1.837 1.849 1.787-1.947 1.862
Wheat 0.752 0.966 0.978 0.959-1.007 0.976
Sorghum 0.018 0.065 NA NA 0.065
Cotton 3.70 3.60 3.54 3.50-3.60 3.50

USDA China Production, Exports, Imports

  March 14/15 Est April 14/15 Est March 15/16 Est April 15/16 Est
Corn Production 215.7 215.7 224.6 224.6
Corn Imports 5.5 5.5 2.5 2.5
Corn Stocks 100.5 100.5 111.5 109.5
Bean Imports 78.4 78.4 82.0 83.0

 

USDA World Production, Stocks

  March 14/15 Est April 14/15 Est March 15/16 Est April 15/16 Est
World Coarse Grain Prod 1298.5 1303.4 1263.6 1261.3
World Coarse Grain Stocks 241.2 243.7 243.1 245.1
FSU Coarse Grain Prod 91.5 91.6 82.3 82.5
World Corn Prod 1009.7 1012.8 969.9 972.1
World Corn Stocks 205.1 207.6 207.0 208.9
Argentina Corn 27.0 28.7 27.0 28.0
Brazil Corn 85.0 85.0 84.0 84.0
FSU-12 Corn 43.8 43.8 39.9 40.2
Mexico Corn 25.5 25.5 23.5 24.0
World Wheat Prod 725.5 725.4 732.3 733.1
World Wheat Stocks 214.7 214.8 237.6 239.3
European Union Wheat 156.7 156.8 158.5 160.0
FSU-12 Wheat 112.8 112.7 117.5 117.6
Australia Wheat 23.1 23.1 24.5 24.5
Canada Wheat 29.4 29.4 27.6 27.6
Argentina Wheat 12.5 12.5 11.0 11.3
India Wheat 95.9 95.9 86.5 86.5
World Soybean Prod 318.6 319.6 320.2 320.2
World Soybean Stocks 77.1 77.7 78.9 79.0
Brazil Soybeans 96.2 97.2 100.0 100.0
Argentina Soybeans 61.4 61.4 58.5 59.0

 

Greg Mockenhaupt

ProEdge Risk Management Consultant

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

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

Monday’s Market Report


Markets 4/4/16 11:36am:

Dow -8.89
S&P -1.47
Nasdaq -4.77

U.S. Stock markets has been on the way up for six weeks now.  This morning drifting lower, holding near their 2016 highs after a recent rally spurred by a weakening dollar and stabilizing oil prices. Major U.S. indexes have rallied for six of the last seven weeks and many investors took comfort in Friday’s solid readings on U.S. manufacturing activity and the March jobs report, which further eased concerns about the strength of the economy.

Oil prices have back tracked reversing all of this year’s gains.  We are now back to levels below where we started early January.

 

May Oil/Crude Futures image001

Grain Markets 4/4/16 11:31am:

Corn+0’2@3.54’2
Beans-4’6@9.13’4

 

As you know last week’s USDA report was released and the special report addressed all USDA data.  In summary:

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As far as planting goes, Producers in NE Nebraska are patiently waiting to start planting corn.  Crop Insurance start date for our area is April 10th.   Moisture is more than adequate with 2-3” of total moisture over the last 2 weeks. Temps have been sporadic with daytime highs ranging from 40-75 deg. night time lows range from 24-35 deg. with current 4” ground temp at 47 deg vs. 43 deg same day last yr.  Bottom line our soil profile is pretty full and we do have some standing water, ideally we would like a warmer and dryer forecast through April… this week cool mid 50’s and dry.

With regard to acres, there is talk of many producers switching back to beans.  At least those that were considering corn on corn.  Things have changed and the corn to bean ratio is now back to where we like to see it at 2.5.

 

Corn:  The big weight on Corn is the Planting Intentions, which, even if we do see some switches out of corn and into beans, either due to wetness or better returns for Beans given the rally in the SX/CZ ratio, still means we need a rather sizable crop yield loss to turn this market around, given the current stocks at 1.9 bln bu and the fact that it might take a national yield under 160 bu/acre to drop stocks enough to matter.

 

Strategy: Call strategies are cheap right now.  This will allow you to move the corn now, have a floor, and a shot at upside.

 

Beans: started overnight a little firmer but have turned into negative territory during the day session, as we saw Soymeal break to losses of $2-3, which is likely due to the fact that the non-Commercial or Spec Fund had covered some of this short, but the cash markets are not following meal values higher, as demand is lethargic and totally hand-to-mouth, as corn’s long term bearish outlook does not bide for meal staying too high in value.

 

Strategy:  8.00/9.60 Triplex contracts are right in the money.  If you don’t have in an offer, this may be an opportunity.

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Retirement: Saving for retirement?  The rules are about to change.  New rules aimed at stockbrokers will have enormous impacts on the way Americans save for retirement.

The rules aren’t coming from the government’s financial regulatory apparatus but from the Labor Department. This week, it is expected to release final regulations that will require brokers getting paid to provide investment guidance on a retirement account to act solely in the best interest of the investor.  It will affect IRA’s, and 401K’s as well.

Read more here:  http://www.wsj.com/articles/new-government-rule-rewrites-retirement-savings-1459762202

For Fun: Last week this was going around, I received it by email, text, and of course Facebook.  But if you haven’t seen it, it is good for a chuckle……or a tear or two.

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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

Market Report


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.

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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.

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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.

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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

 

USDA Report Results


US Carry Out and World Ending stocks come in slightly higher in both Corn and Beans.  This was expected by the trade and seen as neutral, causing no real movement in the market.

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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

USDA Report


Prices are higher. USDA lowered US 2015 corn and soybean crop. USDA also dropped US 2015/16

soybean carryout

 

SH is up 14 cents and near 8.75

CH is up 5 cents and near 3.57

WH is up 6 cents and near 4.76

 

 

2015 US crop production (Million Bushels, Except Cotton in Thousand Bales)

2014       2015                   Ave Trade         Trade

Crop               Final       USDA      USDA   Estimate           Range

Corn             14,216    13,654    13,601    13,646    13,525 – 13,770

Soybeans       3,927       3,981     3,930       3,981      3,926 – 4,043

All Cotton    16,319     13,031    12,940        NA             NA – NA

2016 US winter wheat seedings (Thousand Acres)

Ave Trade         Trade

Class                 2015       USDA        Estimate           Range

HRW               28,978     26.50         28,810    27,576 – 29,592

SRW                  7,087        6.70           7,144      6,400 – 8,539

White                3,396        3.40           3,366      3,250 – 3,500

All Winter       39,461      36.60       39,320    38,250 – 40,796

Dec. 1, 2015 grain and soybean stocks (Million Bushels)

Ave Trade         Trade

Crop        Dec. 1, 2014  USDA      Estimate         Range

Corn              11,211    11,216       11,237  11,073 – 11,440

Soybeans        2,528      2,715         2,720     2,590 – 2,850

Wheat             1,530      1,738         1,698      1,670 – 1,732

US 2015/16 ending stocks (Million Bushels, Except Cotton in Million Bales)

USDA      USDA       Ave Trade         Trade

Crop          December January      Estimate           Range

Corn               1,785     1,802           1,785        1,642 – 1,860

Soybeans          465        440              468            430 – 492

Wheat               911        941              919           891 – 941

Cotton              3.00       3.10               NA             NA – NA

 

 

Greg Mockenhaupt

ProEdge Risk Management Consultant

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

1007 County Road O

Oakland, NE 68045

www.cvacoop.com

Market Report


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

 

USDA Report


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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

 

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

USDA Report


USDA Report released today at 11am and the reaction was quite the show.

 

Beans

Beans traveled from -12 back to +12 in less than 5 seconds.  The amount of volatility was neat to see.  The day started with beans down anticipating an acreage increase.  Turned out the opposite sending beans up to 9.81.  Bean stocks up 34% from March last year, beans acres up but still a new high.

 

Corn

Corn started this morning in the green anticipating unchanged acreage or a slight reduction in acres, but the report showed an increase in corn acres sending corn all the way down to a low of $3.79 ½.  Corn stocks up 11% from March last year/corn acres higher than expected.

 

USDA Numbers

                                USDA                    Avg Est                 Last Year

Corn                      89.199                   88.731                   90.597

Soybeans            84.615                   85.919                   83.701

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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