Closing Comments

Lynn A. Miller

May 19, 2015

Corn:

Export inspections released this morning continue to be strong at 44 million bushels vs. 42 last year.  Other than that, there was a lot of not so supportive news and thoughts on the horizon today that helped the rising dollar bring corn down.  The July contract rejected a double top at 3.71 and ended the day lower instead.  Factors all parties are watching: 

Planting Pace – 85% complete vs 75 average.  Estimates are done by Memorial Day.

Weather – good moisture, normal temps, early planting is a recipe for big crops.

Crop Rating – some expect the entire US crop to be rated a record 81% good-excellent

Basis Levels – improved farmer selling is pressuring basis.

Ethanol – Yields are improving.  Margins at $0.25-0.30 per gallon

Closing Comments

Craig Haugaard

May 18, 2015

Corn:

All of the grain markets found support today with the forecast for cool, wet weather leading to speculators and funds buying back some of their short positions.  While it can’t be denied that we face bearish fundamentals in both the USA and world markets the shorts in the market were heading for the sidelines today on the fear that the USA crop size could be reduced if the weather patterns we have been seeing continue into early summer.  Of more immediate concern is the cold air that is going to hit the Dakotas and Minnesota tonight.  Traders fear that emerging corn is vulnerable so with that in mind I would not be surprised to see additional upside in tomorrow’s session.

Speaking of emerging corn, we had the planting progress and crop condition reports out this afternoon.  The corn crop is reported as 85% planted, up 10% from last week as well as being 10% ahead of the five year average.  Emergence is also running ahead of normal with 56% of the crop emerged.  Last week 29% was out of the ground and the five year average for this point in the year is emergence of 40%.

Closing Comments

Craig Haugaard

May 15, 2015

I hadn’t run the dollar chart for a while but with the recent break in that market I thought it was time to do so.  As you probably know we tend to see an inverse relationship between the dollar and grain prices so if the dollar continues to trade lower it should be good for export sales and ultimately result of a firming up of commodity prices.

 

Closing Comments

Craig Haugaard

May 13, 2015

We had a very light news day in the grain markets today.  The USA dollar was sharply lower which helped offer support to grains.  The weather is still very good with an active pattern will produce above average precipitation in the Corn Belt during the next 7 days.  The 6-10 forecast calls for below average temperatures in the western Corn Belt, and above average temperatures in the eastern Corn Belt.  The past couple of days we have seen an increase in articles talking about the developing El Nino weather pattern.  It kind of feels like we may add back some risk premium with much of the growing season yet to come.  Translating that last sentence to English, it feels like it may work higher in the near term.

 

Closing Comments

Craig Haugaard

May 12, 2015

The USDA report was out today and frankly after looking at this report I don’t think there is enough lipstick in the world to make this pig look pretty.

Corn:

The domestic corn numbers were not too bad today.  The trade was expecting the 2014/15 carry-out to be projected at 1.864 billion bushels so the actual number of 1.851 was pretty much on the money.  Last month they had it pegged at 1.827.  Turning to 2015/16 the average trade guess coming into today’s report was 1.752 so again, the actual number of 1.746 billion bushels.  Certainly nothing real bearish in those numbers, but then certainly nothing real bullish either.  When looking at the world carry-out numbers is where the bears would seem to gather some courage.  For 2014/15 the world carry-out was pegged at 192.5 MMT, up from last month’s 188.46 and the average trade guess of 190.01 MMT.  Looking forward, the USDA is pegging the 2015/16 world carry-out at 191.94 which is sharply higher than the 182.69 MMT carry-out that the trade was expecting.  In light of the world numbers the market did a good job to close higher today.

Closing Comments

Craig Haugaard

May 11, 2015

Corn:

We had very sold weekly export inspections once again this week.  The trade was looking for a number in the 35 to 45 million bushels range so today’s announced number of 44.7 million bushels came in right at the top of the range.  Other than that we had very little news in the market today.  We did have some traders try to make the case that we have now had too much rain but the general consensus seems to be that the benefits from this rain will more than offset any drowned out areas.

Closing Comments

Craig Haugaard

May 8, 2015

 

Corn:

The corn market was about like running on a tread mill all week.  After a lot of emotional ups and downs from the market we ended the week with July corn futures unchanged while the December futures were down a couple of cents.

Closing Comments

Craig Haugaard

May 7, 2015

In keeping with what I have done the past few weeks I am once again running the latest drought monitor map.  This was released today and is as of May 5^th so certainly the rains we have had the past 24 hours or so may give us a map that looks a little different when the new version is released next week.

 

 

Closing Comments

Craig Haugaard

May 6, 2015

Corn:

The corn market is pretty interesting right now.  It kind of reminds me of the line from The Rime of the Ancient Mariner - Water, water, everywhere, Nor any drop to drink.  In the world of corn it seems to be bins and bins of corn everywhere but not a kernel to grind.  We are hearing that end users in some parts of the Corn Belt are struggling to originate bushels.  Even though supplies are plentiful the pipeline seems to be a little tight and this has led to improving basis.  At the end of the day the basis can only do so much before the futures have to take the lead and there is a school of thought that this may be about to happen in the corn market.  Kind of hand in hand with that I heard that an informal survey was taken of corn traders in the USA and the general consensus is that you guys are not going to sell your corn until late summer.  It is probably not wise to put much stock in informal surveys but the fact that folks are talking would seem to indicate that folks are nervous and may have to pay up to get the bushels they need.  I would caution you to not be too late leaving the party.  You don’t want to be like the guy that cornered the pumpkin market and could have sold for a fortune on October 31^st but decided to wait and see if he could get more on November 1st.  In the words of that renowned marketing genius, Kenny Rogers;

 

You've got to know when to hold 'em

Know when to fold 'em

Know when to walk away

Know when to run

 

Closing Comments

Craig Haugaard

May 5, 2015

If this doesn’t sum up the way these markets have made me feel the past few weeks I don’t know what does.