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May 13, 2014

U.S. soybeans rally, lending strength to corn, but wheat weak

CHICAGO, May 13 (Reuters) – U.S. soybean futures rose on
Tuesday, rebounding from Monday’s sell-off on a round of bargain
buying and some position squaring ahead of a report that will
show how big demand from domestic crushers was in April, traders
said.
Corn futures also were firm, following soybeans higher, but
gains were capped by a pickup in the pace of planting around the
U.S. Midwest following weeks of delays.
Wheat futures sagged as funds liquidated long positions on
poor export demand for U.S. supplies. Chicago Board of Trade
soft red winter wheat has fallen for five days in a row,
shedding 4.6 percent during that time.
“The problem is, U.S. wheat is expensive on the global
scene,” said Jim Gerlach, president of A/C Trading. “We have got
to find a level that makes it competitive again.
“USDA told us Friday there’s plenty of wheat globally; it’s
just not going to be here in the U.S., necessarily, so buyers
are going to find cheaper alternatives.”
At 10:10 a.m. CDT (1510 GMT), CBOT July soft red winter
wheat was down 9-1/4 cents at $7.05-3/4 a bushel. CBOT
wheat’s losing streak was the longest since prices fell for
seven days in a row in early November.
CBOT July soybean futures were up 13-1/2 cents at
$14.78-3/4 a bushel and broke through resistance at their 30-day
moving average. The closely watched July-November spread
SN4-X4 widened by 8 cents a bushel.
The National Oilseed Processors Association will release its
monthly report on crush data and oilseed stocks on Thursday. The
last report showed that processors had remained active
throughout March, recording the heaviest crush for the month
since at least 2001.
CBOT July corn was up 1/2 cent at $5.00 a bushel. Corn
futures hit resistance at their 40-day moving average during the
overnight session.
The U.S. Agriculture Department said on Monday afternoon
that corn planting was a better-than-expected 59 percent
complete as of May 11, up from 29 percent a week earlier and 1
percentage point ahead of the average mid-May pace from 2009 to
2013, the USDA said.
Soybean planting was 20 percent complete, up 15 percentage
points from last week and 1 percentage point behind the
five-year average.
Prices at 10:11 a.m. CDT (1510 GMT)

LAST NET PCT YTD
CHG CHG CHG
CBOT corn 500.75 1.25 0.3% 18.7%
CBOT soy 1478.25 13.00 0.9% 12.6%
CBOT meal 483.30 5.20 1.1% 10.4%
CBOT soyoil 41.39 0.41 1.0% 6.6%
CBOT wheat 706.00 -9.00 -1.3% 16.6%
CBOT rice 1535.00 3.00 0.2% -1.0%

Apr 15, 2014

U.S. soy rallies on strong domestic crush; wheat firm

CHICAGO, April 15 (Reuters) – U.S. soybean futures surged
1.7 percent on Tuesday on signs that domestic processors kept
their plants running at high levels even as supplies dwindled,
traders said.
Wheat futures gained 2.3 percent, supported by concerns
escalating political tensions in Ukraine would disrupt shipments
of the grain from the key exporter.
The gains in wheat pulled corn higher after a weak start but
forecasts for warm temperatures and dry conditions across the
U.S. Midwest during the next 10 days limited the gains. The
improving weather should allow farmers to make quick work of
planting, which has been delayed across much of the region.
The soy rally erased much of the losses posted during the
last week following Chinese defaults on imports that showed
demand from the world’s biggest buyer of the oilseed was waning.
“The market last week was compressed on the China default
news,” said Dan Cekander, grains analyst with Newedge USA. “That
caused a lot of liquidation. It still doesn’t solve the tight
supply situation unless those boats end up here.”
At 11:55 a.m. CDT (1655 GMT), Chicago Board of Trade
soybeans for May delivery were up 24-3/4 cents at $15.01 a
bushel, threatening to break through last week’s high of $15.12.
That would mark the highest price for the front-month soybean
contract since July 23, 2013.
The National Oilseed Processors Association on Tuesday said
its U.S. members crushed 153.840 million bushels of soybeans in
March, up from 141.612 million in February. Analysts had
forecast a monthly crush of 146.1 million bushels, according to
a Reuters poll.
The crush was the heaviest for March since at least 2001 and
threatened to further reduce the already tight domestic
stockpile of U.S. beans.
“The crush rate is an indication that current prices and
spreads are not rationing domestic demand,” said Rich Feltes,
vice president of research for R.J. O’Brien. “The USDA in its
April crop report trimmed the U.S. soybean crush by 5 million
bushels. There is nothing in the crush reports to date to
suggest that that is a realistic estimate.”
CBOT wheat for May delivery was up 15 cents at
$6.93-3/4 a bushel, briefly breaking above the psychologically
key $7 a bushel level and hitting its highest since March 28.
Temperatures dropped well below freezing in the southern
U.S. Plains wheat belt early Tuesday and likely hurt some fields
already stressed by drought but meteorologists said the damage
was not expected to be widespread.
The U.S. Department of Agriculture on Monday afternoon rated
the winter wheat crop at 34 percent good to excellent, 1
percentage point below last week and two points below a year
ago, broadly in line with market expectations.
CBOT May corn was up just 1-1/2 cents at $5.04-1/2 a
bushel.
USDA said farmers had planted just 3 percent of the corn
crop as of April 13, below the five-year average of 6 percent
but 1 percentage point above where farmers were a year ago.
Corn planting progress inched along throughout much of April
2013 before exploding during May and many analysts expect a
similar pattern this year, which should allow plenty of time for
the crop to develop before scorching temperatures hit the
Midwest in July.
“A lot of people are ready to go,” Feltes said. “People
generally feel this is the last cold blast, the last snow. There
will be a lot of folks starting to roll next week.”

Prices at 12:00 p.m. CDT (1700 GMT)

LAST NET PCT YTD
CHG CHG CHG
CBOT corn 504.75 1.75 0.4% 19.6%
CBOT soy 1504.25 28.00 1.9% 14.6%
CBOT meal 489.10 10.00 2.1% 11.7%
CBOT soyoil 42.90 0.64 1.5% 10.5%
CBOT wheat 694.00 15.25 2.3% 14.7%
CBOT rice 1540.00 -2.00 -0.1% -0.7%
EU wheat 221.25 7.25 3.4% 5.9%

Apr 4, 2014

Wheat falls 1.7 percent on weather outlook; corn, soy drop

CHICAGO, April 4 (Reuters) – U.S. wheat futures fell 1.7
percent on Friday and were on track for their biggest weekly
loss since January on forecasts for some much needed rain in the
U.S. Plains, traders said.
Corn and soybean futures also fell, as funds exited some
long positions and technical traders booked sales.
“It just seems like a money kind of a flow today, with the
entire complex under pressure,” said Greg Grow, director of
agribusiness at Archer Financial Services. “The funds have been
extremely long in corn and beans … and it seems to be a little
bit of a technical selloff.”
Wheat notched the biggest decline as improving conditions
for growth in the U.S. Plains ensured that the world will
remained well supplied with the grain.
Forecasts called for slight rains during the weekend and a
bigger system bringing much-needed moisture at the end of next
week, said Don Keeney, meteorologist with MDA Weather Services.
The region’s wheat crop is emerging from dormancy and will need
increasing amounts of moisture as it develops over the next few
months.
At 11:47 a.m. CDT (1647 GMT), the benchmark Chicago Board of
Trade May soft red winter wheat contract was down 11-1/2
cents at $6.64-1/2 a bushel. KC hard red winter wheat futures
, which track the crop grown in the drought-stricken
Plains, was off 13-1/2 cents at $7.30-1/2 a bushel.
CBOT wheat has shed 4.5 percent this week and was on track
for its biggest weekly loss since the week ended Jan. 10. The
May contract slipped through its 30-day moving average for the
first time since Feb. 11 during Friday’s session.
CBOT May soybeans were down 5 cents at $14.70-1/4 a
bushel, with a wave of technical selling hitting the market
after prices failed to break through the high end of its 20-day
Bollinger range. New-crop contracts were close to unchanged as
traders unwound bull spreads.
May soybeans were up 2.3 percent this week, the third
straight week of gains for the front-month contract. Front-month
soybeans have risen for eight out of the last nine weeks due to
concerns about tight old-crop supplies in the United States.
CBOT May corn was down 2-3/4 cents at $4.97-1/4 a
bushel. The contract has risen 1.1 percent so far this week and
also was on track for its third straight week of gains.
Front-month corn has risen for 10 of the last 11 weeks on strong
demand from the export and ethanol sector.

Prices at 11:50 a.m. CDT (1650 GMT)

LAST NET PCT YTD
CHG CHG CHG
CBOT corn 497.50 -2.50 -0.5% 17.9%
CBOT soy 1470.50 -4.75 -0.3% 12.0%
CBOT meal 477.80 -2.30 -0.5% 9.2%
CBOT soyoil 41.55 -0.12 -0.3% 7.0%
CBOT wheat 664.25 -11.75 -1.7% 9.7%
CBOT rice 1573.00 3.00 0.2% 1.4%
EU wheat 206.50 -0.25 -0.1% -1.2%

Apr 1, 2014

Soy, corn extend rally on supply concerns, wheat falls

CHICAGO, April 1 (Reuters) – U.S. soybean futures rose 1.5
percent on Tuesday, with old-crop months hitting fresh contract
highs on follow-through buying after a government report that
confirmed that the tight domestic supply situation is likely to
persist until harvest.
“The U.S. Agriculture Department did nothing yesterday to
dispel notions that U.S. old crop supplies are tight, requiring
higher prices to discourage demand and encourage imports and
early harvest of 2014 fields,” Farm Futures analyst Bryce Knorr
said in a note to clients.
Corn futures also rose, gaining 1.3 percent and hitting
their highest since Aug. 27, due to the government’s forecast of
smaller-than-expected plantings this spring.
Strong speculative buying added support to prices, with
large investment funds jumping in after grains posted sharp
gains during the first quarter of the year.
“It is the beginning of the month, the beginning of the
quarter,” said Tom Grisafi, market adviser at Advance Trading,
“The money flow wants the grains. They are going to buy it.”
At 11:21 a.m. CST (1621 GMT), Chicago Board of Trade May
soybean futures were up 25-1/4 cents at $14.89-1/4, just
off the contract high of $14.90-1/2 hit earlier in the session.
On a continuous basis, the front-month contract was trading
at its highest since Sept. 13, 2013.
Investment bank Morgan Stanley said that despite the
market’s initial bullish reaction, it does not expect the stocks
estimate for soybeans to be able to sustain a rally in prices.
“With sales coverage in the South American crop far behind
last year’s levels and Chinese demand waning, we see the setup
into the second half of 2013/14 as quite different from the same
time a year ago.”
CBOT May corn gained 7-3/4 cents to $5.09-3/4. Prices
peaked at $5.12-1/2 a bushel.
“I think there’s more bullishness for corn going forward on
the back of both the stocks and plantings reports. I expect it
to test the resistance level of $5.20,” said Vanessa Tan, an
investment analyst at Phillip Futures.
Wheat futures fell as traders built up long corn/short wheat
spreads. Chicago Board of Trade May soft red winter wheat
was 12 cents lower at $6.85-1/4 a bushel.
Wheat prices found support at the 20-day moving average, a
key technical point the benchmark May contract has not closed
below since Feb. 27.
USDA said late on Monday afternoon that the condition of the
crop in the southwestern Plains stabilized despite drought
across much of the region. Ratings for the crop in Kansas, the
largest production state for the grain, fell for the third week
in a row.

Prices at 11:35 a.m. CDT (1634 GMT)

LAST NET PCT YTD
CHG CHG CHG
CBOT corn 509.75 7.75 1.5% 20.8%
CBOT soy 1490.00 26.00 1.8% 13.5%
CBOT meal 483.60 4.30 0.9% 10.5%
CBOT soyoil 41.48 1.06 2.6% 6.9%
CBOT wheat 685.50 -11.75 -1.7% 13.3%
CBOT rice 1568.00 8.00 0.5% 1.1%
EU wheat 207.75 0.00 0.0% -0.6%

Mar 24, 2014

Weather worries support wheat; corn, soy boosted by export data

CHICAGO, March 24 (Reuters) – U.S. grains rallied on Monday,
with wheat supported by concerns about the weather in key
growing areas while soybeans and corn rallied on strong export
data, traders said.
Wheat led the gains, rising 3 percent, on forecasts for
continued dryness in the southern U.S. Plains wheat belt for the
next 10 days.
The dry conditions will add stress to the crop as it emerges
from dormancy and farmers begin to assess how much damage was
done to wheat by cold winter temperatures.
“Hard red winter wheat country is not expected to receive
significant rain over the near term and crop conditions, which
will be reported after the close today, are expected to
deteriorate further,” said Sterling Smith, futures specialist
for Citigroup.
At 11:26 a.m. CDT (1626 GMT), the benchmark Chicago Board of
Trade May soft red winter wheat contract was up 20-1/2
cents at $7.13-3/4 a bushel. KC hard red winter wheat futures
for May delivery were 21-1/2 cents higher at $7.92-3/4 a
bushel.
CBOT May corn was 9-3/4 cents higher at $4.88-3/4 a
bushel and CBOT May soybeans were up 13-3/4 cents at
$14.22-1/2 a bushel.
Technical buyers lent support to soybean prices after an
early dip pushed the May contract below its 20-day moving
average.
“May futures rebounded after holding support at the
trendline off January and March lows, triggering short covering
and bargain hunting,” Bryce Knorr, analyst at Farm Futures, said
in a note to clients.
The U.S. Agriculture Department said on Monday that weekly
export inspections of soybeans were 732,132 tonnes compared to
forecasts for 770,000 to 925,000 tonnes. Corn export inspections
were 1.143 million tonnes, topping forecasts for 850,000 to 1
million tonnes.
The weekly data showed that soybean export shipments put the
U.S. exporters on pace to top USDA’s annual target by 270
million bushels, according to Arlan Suderman of Water Street
Solutions. Corn exports were 12 million bushels ahead of the
government’s expected pace.
The soybean market has been weighing up tight U.S. supply
and strong demand against the prospect of South American
harvests flooding the market and China easing back on imports.

Prices at 11:27 a.m. CDT (1627 GMT)

LAST NET PCT YTD
CHG CHG CHG
CBOT corn 489.00 10.00 2.1% 15.9%
CBOT soy 1422.50 13.75 1.0% 8.4%
CBOT meal 461.50 5.60 1.2% 5.4%
CBOT soyoil 40.90 -0.12 -0.3% 5.4%
CBOT wheat 713.75 20.50 3.0% 17.9%
CBOT rice 1550.00 7.50 0.5% -0.1%
EU wheat 213.50 2.75 1.3% 2.2%

Mar 14, 2014

Wheat firms on U.S. weather concerns, Ukraine

CHICAGO, March 14 (Reuters) – U.S. wheat futures rose 1.2
percent on Friday, extending a rally on worries about dry
weather limiting crop production in the U.S. Plains and ongoing
fears that supplies from Ukraine will be disrupted due to
political turmoil, traders said.
The strength in wheat bucked overall weakness in the
agricultural commodities market. Corn and soybean futures eased
due to sagging demand from China.
“You still have some people starting to get a little more
concerned about the U.S. hard red winter wheat crop as it comes
out of dormancy,” said Mike Krueger, president of The Money
Farm, a grain market advisory service. “There is not much rain
in the forecast and it has been dry.”
Wheat prices also remained technically strong after pushing
through key resistance points during the past few weeks.
At 11:08 a.m. CDT (1608 GMT), Chicago Board of Trade soft
red winter wheat for May delivery was up 6-1/4 cents at
$6.80 a bushel.
The front-month CBOT wheat contract was on track for a
7.7 percent gain for the week. During the past two weeks, wheat
futures have risen 16.2 percent, their biggest two-week rally
since July 2012.
The political crisis in Ukraine threatens to curb supplies
from one of the world’s leading exporters of wheat and corn.
Port activity has continued normally and farmers have
started spring sowing, but talk that traders are holding back
from fresh export deals and that farmers are struggling to
finance crop sowing has made grain markets nervous.
Investors are awaiting the outcome of a referendum on Sunday
in Crimea, in which the southern Ukrainian region could vote to
join Russia and prompt Western sanctions against Russia.

CBOT May soybeans were down 10 cents at $13.86-1/3 a
bushel. Front-month soybeans have shed 5.0 percent so far
this week, which would be the biggest weekly loss on a
continuous basis in nearly six months.
“We have probably seen the peak in soybean prices,” said
Paul Deane, agricultural commodity strategist at ANZ in
Melbourne. “I don’t see how prices can sustain at these levels.”
The ongoing harvest of a large soybean crop in Brazil is
pushing supplies higher even as demand from China, the top buyer
of soybeans, is weakening. The combination has hurt both the
cash as well as the futures market in the United States and
South America.
“The fear of further Chinese cancellations will likely
temper any upside ideas for their basis and/or our futures,”
Sterling Smith, Citigroup market strategist, said in a note to
clients. “Feed demand across all sectors of the country (China)
is weak, as bird flu is seen cutting into demand for poultry.”

Mar 13, 2014

Wheat sags after hitting $7, soy bounces on bargain buying

CHICAGO, March 13 (Reuters) – U.S. wheat futures fell 1.2
percent on Thursday on a profit-taking setback following a rally
to their highest level since late October, traders said.
Corn futures also sagged, with weakness in wheat prices
weighing, but soybeans edged higher due to bargain buyers
entering the market following three straight days of declines.
A wave of profit-taking hit the wheat market after prices
for the front-month Chicago Board of Trade contract hit
$7.00-3/4 a bushel, its first time higher than the
psychologically important $7.00 level since October 25.
“A lot of it has to do with the fund positioning,” said
Brian Hoops, president and senior market analyst with Midwest
Market Solutions. “Most of this rally has been based off of
technicals and fund short-covering and after the funds cover all
their shorts there is very little reason from a fundamental
standpoint for them to continue to push higher.”
At 11:21 a.m. CDT (1621 GMT), CBOT May soft red winter wheat
futures were down 8-1/4 cents at $6.75-1/2 a bushel. CBOT
May corn was 4 cents lower at $4.84-1/2 a bushel.
CBOT wheat had surged 6.7 percent during the previous two
days, rallying through key technical resistance points as
investors scrambled to unwind bearish positions built up due to
slack export demand and plentiful global supplies.
Concerns about political upheaval in Ukraine, a key exporter
of the grain, as well as uncertainty about the U.S. winter wheat
crop kept the declines in check on Thursday. Traders said the
market will assess how much damage was done to the U.S. crop
from adverse winter weather when the crop emerges from dormancy
in the next few weeks.
“You have the Black Sea situation and you have concerns in
the United States about winter wheat production with ongoing
dryness that we are seeing in the Plains,” said Luke Mathews, a
commodities strategist at Commonwealth Bank of Australia.
CBOT May soybeans were up 9 cents at $13.96 a bushel,
with the market shrugging off expected news that China had
cancelled up to 600,000 tonnes of South American soybean cargoes
for shipment between March and May.
Traders were waiting for announcements of the cancellation
of U.S. deals due to signs of a softer Chinese economy that
showed up in weak export data from the country earlier this
week.
“The trade seeing China’s South American cancellations only
ups the ante for them to cancel U.S. supplies at some point,”
Matt Zeller, direct of market information at INTL FCStone, said
in a note to clients. “Some hard evidence of that will be needed
one of these weeks.”

Prices at 11:23 a.m. CDT (1623 GMT)

LAST NET PCT YTD
CHG CHG CHG
CBOT corn 484.50 -4.00 -0.8% 14.8%
CBOT soy 1396.00 9.00 0.7% 6.4%
CBOT meal 444.10 7.60 1.7% 1.5%
CBOT soyoil 42.99 -0.43 -1.0% 10.7%
CBOT wheat 675.50 -8.25 -1.2% 11.6%
CBOT rice 1525.00 -0.50 0.0% -1.7%
EU wheat 210.25 -3.25 -1.5% 0.6%

Mar 12, 2014

Soy drops for third straight day on China demand concerns

CHICAGO, March 12 (Reuters) – U.S. soybean futures dropped
2.1 percent on Wednesday on
worries about waning demand from China, the world’s top buyer of
the oilseed.

Traders said there was talk that China had backed out of
previously agreed purchases of both U.S. and Brazilian soy
supplies, which could leave a glut of soybeans on the market.
There was no confirmation of any cancellations.

Mar 11, 2014

Wheat, corn bounce on bargain buying

CHICAGO, March 11 (Reuters) – U.S. wheat and corn futures
rose on Tuesday on a round of bargain buying following sharp
declines on Monday, traders said.
Soybean futures were mixed, with nearby contracts extending
Monday’s losses as more supplies from the South American harvest
arrive at export ports. New-crop contracts rallied as the market
sought to buy acres as U.S. farmers finalized their planting
decisions.
Worries about winter wheat development in key growing areas
of the United States as the crop begins to break dormancy added
support to wheat prices, which notched the biggest gains on
Tuesday.
“The U.S. Plains are the area of concern as dryness has
persisted,” Sterling Smith, Citigroup market strategist, said in
a note to clients. “Recent precipitation in Texas has been
beneficial, but the main production area from Oklahoma north
through Kansas remains very short of soil moisture.”
USDA’s weekly state crop reports issued late on Monday
showed wheat condition ratings improved in Kansas and Texas but
declined in Oklahoma.
At 11:07 a.m. CDT (1607 GMT), Chicago Board of Trade soft
red winter wheat for May delivery was 10 cents higher at
$6.50-3/4 a bushel.
CBOT May corn was up 3-1/2 cents at $4.81-3/4 a
bushel. Some technical buyers entered the market after prices
rose through the 200-day moving average early in the session.
CBOT May soybeans were down 5-1/4 cent at $14.13-1/2 a
bushel, consolidating near its 10-day moving average. Prices had
fluctuated between positive and negative territory during the
session.
The new-crop November soybean contract was 11-1/4
cents higher at $11.87-3/4 a bushel.
“Beans still have plenty of issues to sort out after
yesterday’s report, needing to shut off old-crop export demand
but also spur 2014 plantings,” said Matt Zeller, director of
market information at INTL FCStone.
Further support for wheat stemmed from lingering concerns
that political turmoil in Ukraine could disrupt shipments from
the Black Sea region.
“The USDA reports on Monday caused general market weakness
and with the reports behind us the market’s attention is again
moving back to the critical political situation in Ukraine,” one
European trader said.
“It is immensely difficult to forecast which way the
political events in Ukraine will move and any heightening of
tension could result in very volatile price movements if the
market sees a threat to Black Sea grain exports.”

Prices at 11:09 a.m. CDT (1609 GMT)

LAST NET PCT YTD
CHG CHG CHG
CBOT corn 481.50 3.25 0.7% 14.1%
CBOT soy 1414.00 -4.75 -0.3% 7.7%
CBOT meal 443.30 -1.40 -0.3% 1.3%
CBOT soyoil 43.95 0.09 0.2% 13.2%
CBOT wheat 651.50 10.75 1.7% 7.6%
CBOT rice 1528.00 7.00 0.5% -1.5%
EU wheat 208.25 1.25 0.6% -0.4%

Mar 4, 2014

South American crop woes boost U.S. corn, soy futures

CHICAGO, March 4 (Reuters) – U.S. soybean and corn futures
rose on Tuesday due to South American crop production woes that
boosted prospects for U.S. supplies on the export market in the
coming weeks, traders said.

Corn received further support from the uncertainty over
unrest in Ukraine, hitting its highest on a continuous basis
since mid-September.

    • About Mark

      "I cover grain futures out of Chicago, with a focus on the wheat market. Examining the effects of world crop production on prices and the vagaries of export demand for U.S. supplies takes up most of my time. Previously, I was a reporter on the equities desk in New York and I got my start as a news assistant in the Washington Bureau."
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