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01-16-2014 07:56 AM - edited 01-16-2014 01:59 PM
At the close:
The March corn futures contract closed 2 1/4 cents higher at $4.28. The March soybean futures contract finished 3 cents lower at $13.15. March wheat futures ended 5 cents higher at $5.72 per bushel. The March soymeal futures contract ended $2.50 per short ton lower at $432.00. The March soyoil futures closed $0.06 higher at $38.05.
In the outside markets, the NYMEX crude oil is $0.08 per barrel lower, the dollar is lower and the Dow Jones Industrials are 65 points lower.
The March corn futures contract is trading unchanged at $4.25. The March soybean futures contract is trading unchanged at $13.18. March wheat futures are unchanged at $5.67 per bushel. The March soymeal futures contract is trading $0.90 per short ton higher at $435.40. The March soyoil futures are trading $0.28 lower at $37.71.
In the outside markets, the NYMEX crude oil is $0.18 per barrel lower, the dollar is higher and the Dow Jones Industrials are 81 points lower.
Where's this market going? One marketwatcher shared his thoughts for all of you, this morning. He says, "Since December 12th, we have seen soybeans drop 50¢. The acreage shift to soybeans were traded in that period. So, the acreage shift is baked in. With new crop beans at the near $11 level, farmers know they can lose more money raising soybeans vs. corn. Using current corn, soybean new-crop prices, a farmer can make $810 per acre raising corn vs. $550 on soybeans.
Regarding the soybean market, nearby demand and little farmer-selling is helping the bull spreads work for now.
For corn, the $4.06 may be a nearby low, but $4.40 will be tough to reach. For the next couple of months, the corn market could be stuck in a 20-30¢ trading range."
At the open:
The March corn futures contract is trading 2 1/2 cents higher at $4.28. The March soybean futures contract is trading 11 cents higer at $13.29. March wheat futures are 2 cents higher at $5.70 per bushel. The March soymeal futures contract is trading $5.50 per short ton higher at $440.00. The March soyoil futures are trading $0.10 lower at $37.89.
In the outside markets, the Brent crude oil is $0.29 per barrel lower, the dollar is lower and the Dow Jones Industrials are 53 points lower.
The USDA's Weekly Export Sales were released. They are friendly:
Wheat= 401,900 metric tons vs. the trade expectations of 200,000-600,000 metric tons,
Corn=821,000 vs. the trade's expectations of 200,000-600,000 metric tons,
Soybeans=1.226 million metric tons vs. the trade's expectations of 600,000-1,100,000 metric tons and
Soybean meal= 234,700 metric tons 50,000-150,000 metric tons.
In addition, the USDA released fresh export sales Thursday:
--China bought 465,500 tons of U.S. soybeans.
--'Unknown' buyer canceled 126,000 tons of U.S. corn for 2013-2014.
At 7:54am (sorry running late)
Early calls: Corn is seen 2-4 cents higher, soybeans 9-10 cents higher, and wheat 1-2 cents higher.
Overnight grain, soybean markets=Trading higher.
Brent Crude Oil=$0.30 per barrel lower.
Wall Street=Seen lower, as Best Buy misses and gets hammered. JCPenney closes 33 stores, Citigroup misses, and Goldman beat.
World Markets=Asia/Pacific stocks were lower, Europe stocks lower.
More in a minute,
01-16-2014 08:33 AM - edited 01-16-2014 09:17 AM
As they harvest their 2014 crop, more Brazilian farmers are going to be selling cash soybeans today and maybe for the rest of the week, because they are behind on new crop sales. In fact, my Brazilian market analyst contact is telling me, this morning, by the end of December, Brazil had sold 43% of the new crop, according to our latest estimate. It's above the 5-year average (38%), but way behind last year's 61%.
Oh, by the way, U.S. farmers are selling into this rally too. Check your local basis, it's probably weakening.
01-16-2014 09:44 AM
Our local bean basis had been running about 15 cents under cbot since harvest. Jumped up to 10 cents over about a week ago and is staying there. Guessing it is due to Illinois river Ice upstream at Marseilles.
01-16-2014 11:56 AM
Mike, cash soybean basis seems to be mostly positive around here. With that said, I don't know any farmers still holding soybeans. Plenty of corn waiting in bins for a possible spring rally. At current levels, soybeans still look attractive in 2014. The $810 number you mention for corn will quickly be eaten up by fertilizer and drying cost.
01-16-2014 01:19 PM - edited 01-16-2014 01:20 PM
Cash basis is getting outrageous here...
at Bunge crush: 14.50/bu (like 1.50 over cbot) and 13.95 at the elevator. This is the CDN dollar kicking in here.. thats like 13 in USD.
NC beans into Bunge/JRI is 12.05
01-16-2014 02:45 PM - edited 01-16-2014 02:46 PM
MARKET COMMENTARY January 16, 2013
By Raymond Jenkins
Export sales were deemed bullish for wheat and soybeans, neutral for corn. The corn sales number for the 13/14 year was 32.3 million bushels, soybeans at 25.8 million, and wheat at 11.8.
Those numbers were enough to get futures off to a decent start, but it is the finish that counts. Nearby corn closed one cent higher while March beans closed down three, and that was after being 12 higher at one time in the day session.
There seems to be growing concern about the amount of soybeans being purchased out of the US, especially in light of the fact that the South American crop looks huge. Perhaps last year’s logistical issues down there are having an effect. The importers may be choosing to let the logistical snafus settle down before choosing to go full throttle on loading SA beans this year. All I know is that we will all know a lot more about this situation in a few months, but right now it looks like the US could be both bean exporter AND importer between now and our new crop harvest.
Keep checking the bins---there is some evidence this may not be one of our better storing corn crops. A lot of folks are taking the “freeze it for now” approach, but for that to work you really need to have a plan in place to move the corn before spring planting season takes precedence
01-16-2014 03:09 PM
Corn planting uncertainty is pushing up corn in Brazil. Luis Vieira, AgroSouth.com purveyor of South American ag news reports:
"Local reports from Mato Grosso say that several farmers from the Brazilian state are not really sure of how big their second corn crop will be or whether they will even plant the cereal. According to the Mato Grosso Institute of Agricultural Economics, this indecisiveness have pushed the corn prices up in the last few days. The current projection for the safrinha corn crop in Mato Grosso is 17.07 million tons, says the Institute, through an area of 8 million acres. Last year, the state harvested 22.5 million tons.
While the talks about the 2014 corn crop is still slow, the last year crop has been in the market. The sales reached 90 percent of the amount produced in last December, when the price hit the highest value since August (R$ 13.64/bag)."
01-16-2014 04:39 PM
World Stocks of Corn and Beans Becoming Burdensome
Still, another giant corn crop is a very real possibility this fall.
Soybean supplies remain tight in the United States, but world supplies of both corn and soybeans are nearing the burdensome level, according to USDA’s latest World Agricultural Supply and Demand Estimates, released Jan. 10.
Looking at corn first, USDA lowered its estimate for world ending stocks of corn by more than 2 million metric tons in January compared with December’s projections, but year-over-year ending stocks have grown rapidly. USDA projects world ending stocks at 160.23 million metric tons, up nearly 21% from last year’s carryout.
The China Factor
"The world’s storehouse is China," says Chad Hart, agricultural economist with Iowa State University. China currently holds 71.5 million metric tons of corn, nearly 45% of the world’s total, and its stocks are growing. In the 2010-11 crop year, China had about 50 million metric tons in carryout. That grew to close to 60 million in 2011-12, and then to roughly 65 million in 2012-13.
"China has been importing a sizeable amount of corn even with a record crop and larger stocks," says Hart. "That tells me China’s demand side is high enough and that it wants to keep enough product on hand to meet that demand."
According to USDA, China’s demand for corn has indeed grown, from 188 million metric tons in 2011 to 216 million metric tons this year.
Even so, world corn stocks are nearing the point where they could soon become burdensome. According to Hart, the world stocks-to-use ratio for corn is 17%, up from 15% last year. At 20%, the ratio indicates a burdensome supply. The U.S. stocks-to-use ratio is now nearing 14%, compared with last year’s 8%. At 15%, Hart says, U.S. stocks become troublesome.
"The upshot is that not only in the United States are we longer on corn, but worldwide we are as well," he says. "We have lots of corn in storage worldwide to meet demand."
Plenty of Beans Worldwide
"Between the December and January WASDE reports, USDA found more soybeans worldwide on more production but steady demand, which contributed directly to world ending stocks of soybeans," says Hart. Most of the world’s stocks of soybeans are in South America.
The stocks-to-use ratio for beans is also growing. Last year, the world ratio of stocks to use for soybeans was 23.5% . This year, it is 26.7 percent, and a ratio between 25 and 30 percent is considered burdensome.
South America only had 10% left of last years crop? That is not much of a fudge factor.
We very likely will be importing beans to get by till the next record breaker?
Our next crop doesn't even have the seed all ordered yet. Let alone planted. I want to see a picture of the horse and cart this reporter rode in on.