August 12, 2015

Corn

CBOT Prices Two Rivers Cash Bid Prices
Sep ‘15 357’2 -19’2 Aug ‘15 327’0 -19’0
Dec ‘15 368’0 -19’4 FH Sep ‘15 327’0 -19’0
Mar ‘16 379’6 -19’0      
May ‘16 386’2 -18’4 NC ‘15 323’0 -20’0

 

The USDA released their supply and demand update today and the report was a shocker and caught a market leaning the wrong way.  Old crop corn carryout stocks were about as expected at 1.772 billion bushels.  The biggest shocks came in the form of increased yield projections.  They put corn yields at 168.8 bu/ac, up 2 bushels from July and 4.3 bushels above average trade estimates.  Harvested acres were left unchanged.  Corn imports were increased 5 million bushels (likely due to weak Brazilian and Argentine currencies that will pencil out for importing in the Southeast region), feed was increased 25 million, exports were reduced 25 million, ethanol was increased 25 million, and seed and residual increased 15 million.  New crop ending stocks were pegged at 1.713 billion with a 12.4% carryout/use ratio.  This also led to a dime decrease in farm price.  Brazilian production was increased 2 million tonnes and Argentina’s was increased 1.5 million.  World carryout was up just over 5 million tonnes.

 

Soybeans

CBOT Prices Two Rivers Cash Bid Prices
Aug ‘15 951’0 -63’0 Aug ‘15 931’0 -62’0
Sep ‘15 918’4 -62’4      
Nov ‘15 910’0 -61’4      
Jan ‘16 915’2 -60’6 NC ‘15 841’0 -62’0

Old crop soy stocks were a little lower than expected at 240 million bushels.  This was overshadowed by the jump in yield by 0.9 bu/ac, which was 2.2 bu/ac above average estimates at 46.9 bu/ac.  In the resurveyed acres they lowered acres by 900,000 acres, but the trade expected around 1 million.  Crush demand was increased 20 million bushels, exports were down 50 million, and residual was increased 2 million bushels.  This resulted in a 45 million bushel increased carryout to 470 million.  Farm price was lowered a dime for beans as well.  Brazilian production was left unchanged while Argentina’s was increased 0.8 million tonnes.  Total world carryout was decreased 4.92 million.  Do you think that the rally in the equity market happened about the same time the selloff in grains started was a coincidence?  Looks like funds put money to work today in stocks rather than grains.

 

If you have any questions or would like to further discuss grain marketing call Justin Huebner at 641-628-4167.

August 12, 2015