Tag Archives: soybeans

Summary

Market Recap Thursday 7-2

Commodity markets close early on Thursday. No trade on Friday.

We are now on the down hill slide of 2020. The good news it is starting with an petite for risk.  After one of the worst quarters equities rallied through the 2nd quarter for one of their best performances since Black Monday in 1987. Economic reports continue to show the US economy reopening strong. The labor market is coming around with the latest non farm payroll data grew by 4.8 million. Beating analyst estimates of 3.7 million. That dropped unemployment to 11.1%. That is a drop from 13.3% in May. The US trade deficit also grew to $54.6 billion. Up from May’s $49.8 billion.  The pending home sales index 44.3% beat May’s -21.8%. Consumer sentiment is up to 90.8 vs. last months 86.6. The case schiller home index ticked up 0.1% to 4.7%.

The US Dollar index finally broke through nearby support levels on Wednesday. The latest production numbers showed that product demand is returning in the US. That seemed to shift investors from wanting to hold the dollar as a safe haven to selling it and re-investing in production assets. Just ahead of the long weekend emerging currencies like the Russian Ruble and Brazilian Real are moving higher against the US Dollar.

Grains found a small rally Tuesday after the stocks and acreage report. USDA dropped corn acreage from nearly 97 million acres to 92.006 million acres. Soybean acres according to USDA are 10% higher than 2019 at 83.825 million acres. Mike Zuzolo, Global Commodity Analytics, pointed out in his midday commentary that USDA left 12 million soybean acres un-planted. Corn stocks were up almost 1% from 2019 to 5.22 billion bushels. Soybeans stocks were 22% lower than 2019 at 1.39 billion bushels. Old crop wheat stocks were 1.04 billion bushels down 3%. Weather will likely now move back to center stage. Forecasts look to be hot and dry to start July.

The support from the acreage report appears to have slowed by Thursday. Grains closed lower across the board. Partially in a profit taking move ahead of the extended holiday weekend. A looming WASDE report next week is also keeping some longs from entering the market. The main concern that the world outlook board will keep the US corn carryout for the next marketing year near 3 billion bushels.

Thursday’s export data was mixed for all grains. China was a less notable buyer, but was still the top destination for sorghum. Corn exports were also a marketing year high at 1,439,900 MT. Mexico and South Korea were the top destinations. Egypt was the top destination for US soybeans taking in over 146,000 MT. Net sales of soybeans were at a marketing year low at 241,000.

Wednesday’s ethanol production data was also a bullish factor for corn. EIA data showed for the week ending June 26, ethanol production increased 0.8%, or about 7,000 barrels per day (b/d), to 900,000 b/d. That is nearly 70% higher than it was 9 weeks ago, but is still 16.6% behind a year ago. Ethanol stocks continue to shrink for the tenth consecutive week. Ethanol stocks were down 4.1% to 20.2 million barrels and 11.7% below year-ago volumes. Inventories tightened across all regions and are at their lowest level since the first week of 2017.

The first of July is also the starting day for the new USMCA trade agreement. This could help boost North American demand for ag commodities. There are still a few tensions between the three trade partners like Mexican labor standards or Canadian protection of dairy.

USDA announced to flash sales on Thursday. For the 20/21 marketing year China bought 202,000 MT of corn and 126,000 MT of soybeans.

Weather is also still a lurking bull market maker. With most of the fall crops getting planted earlier than usual this year, a hot and dry July would not be good. Analyst believe though the crop is still looking fairly strong as farmer buying to cover forward contracts doesn’t seem to be happening yet. If the crop starts to burn up and farmers believe they can’t fulfill forward contracts that could bring farmer buying. Overall that scenario would create major momentum to the upside.

On Monday the weekly export inspections report from USDA showed corn, wheat and sorghum all making the needed number to meet USDA export expectations.

Livestock were broadly moving higher until the stocks and acreage report. That is when corn cattle spreads starting unwinding. Wednesday the selling hit cattle again, but midday profit started being taken and that helped cattle close in the green. Cattle found follow through on Thursday and actually reversed the positive basis to the cash. This could cause there to be weakness in the complex going into next week. Lean hogs on the July contract continue to trade under the $45 mark. This could set up bear spreading against the August contract as July goes off the board. There is also continued news reports from China that another virus may be emerging that impacts the hog herd. This comes as African Swine Fever is still active in China and impacting hog numbers. Lean hogs saw limited buying throughout the day. Grilling looks to be a go for many this Independence day.  Going into next week though carcass prices could weaken as demand typically drops slightly after the fourth of July.

A light scattered trade was reported in a couple of areas on Thursday. Prices were generally steady with the bulk of deals earlier. Southern live business this week has had a full range of $91 to $96, mostly $94 to $95, while Northern dressed deals have had a full range of $148 to $155, mostly $153 to $155.  For the cattle left on show lists Thursday afternoon asking prices were around $96 plus in the South, and $158 in the North.

The Fed Cattle Exchange Auction today listed a total of 1,814 head, with 144 actually sold, 1,352 head listed as unsold, and 318 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 1,155 total head, with 144 head sold at $95.00, 693 head unsold, 318 head listed as PO ($93.00); NE 194 total head, with no cattle sold; TX 465 total head, with no cattle sold. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 768 head total, 144 head sold, with a weighted average price of $95.00; 1-17 day delivery 1,046 head total, with no sales.

Expected Slaughter numbers Thursday

Cattle

121,000 hd today 120,000 hd wk ago 2,000 hd yr ago

 

Hogs

461,000 hd today 472,000  hd wk ago 23,000 hd yr ago

 

 

Midday Carcass Value Thursday

Beef

Choice up 0.16 205.54

Select  dn 0.13 198.30

C/S Spread 7.24

Loads 79

Pork

Carcass up 3.86 67.48

Bellies up 2.95 92.42

Loads  227

 

Grains Settlement

  • Corn dn 3 1/2 – 7
  • Soybeans dn 1/4 -2 1/4
  • Chicago Wht dn 4 1/2 – 8 3/4
  • Kansas City Wht dn 7 1/2 – 15 1/4

Livestock Settlement

  • Live Cattle up 0.32 – 2.10
  • Feeder Cattle up 1.47 – 2.55
  • Lean Hogs dn 0.07 up 0.82
  • Class III Milk up 0.12 – 0.54

Pre-Opening Market Broker Commentary

Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today. There could be profit taking ahead of the long weekend.


Jerry Stowell, Country Futures,  looks at what may impact the livestock futures today.


Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. Grain selling ahead of the long weekend is somewhat expected.


John Payne, Daniels Ag Marketing, looks at the grain settlements. Weather is still being watched closely Grains found follow through support to start the new month. It may be time to consider sales.


Jack Fenske, York Commodities, looks at the closing market numbers.

Commodity markets, including grains, fell in with the risk off sentiment that developed across the entire market complex Friday. Brain Splitt with Ag Marketing.Net weighed in on how rising cases of Covid-19 may impact more than the equity markets.

Energy markets are at risk as states like Texas pause their reopening. That translate to harm for corn demand. Splitt is quick to point out though that there is one demand factor that could be improving for corn and that is feed demand. As DDGS and other feed ration ingredients became more scarce corn filled in more gaps livestock feeders.

China is back in the market for US soybeans on Friday, but their total demand picture is still fuzzy. A weather story would definitely help bean bears, but time for the story to develop is starting to dwindle in Splitt’s opinion.

Listen to the full commentary here:

Following hot and dry conditions mixed rain showers were welcomed by farmers across the Midwest this past weekend. That helped to bring around the corn and soybean conditions from the previous week. Winter wheat harvest was able to keep pace with the 5 year average. Topsoil moisture was also able to increase in several states that were starting to become pretty dry.

Corn planting and emergence is considered complete across the country. That means that corn is now in or nearly in the silking stage. According to NASS 2% of the national corn crop is silking. That is on pace with the five year average. Kansas has 3% silking. Which is about 3% from the five year average. Nebraska has yet to see any corn enter the silking stage. Texas has the most corn silking at 55%. That is 5% ahead of the five year average.

As for the national corn condition it improved 1% week to week to 72% good to excellent. Nebraska corn improved 3% to 74% good to excellent. Kansas corn remained unchanged to 54% good to excellent. Pennsylvania continues to have one of the best corn crops at 88% good to excellent.

Soybeans have yet to complete the planting or emergence stage. That means they are still reported by NASS. Soybean planting is considered 96% complete up 3% from last week. Just 4 states have yet to hit the 90% and above planting completion. Kansas has 95% of the soybeans planted. That is 8% ahead of the 5 year average. Nebraska completed soybean planting last week.

Soybean emergence is 4% ahead of the five year average nationally at 89%. Iowa and Nebraska are both considered 96% emerged. That is 5-6% ahead of the five year average. Kansas is 15% ahead of the five year average at 86% emerged.

5% of the soybean crop nationally is considered to have entered the blooming stage. That is on pace with the five year average. Nebraska has 16% of the soybean crop blooming, up 13% from the five year average. Kansas is right at the five year average for 1%. Louisana has the most soybeans blooming at 55%.

Nationally soybeans are considered 70% good to excellent. That is down 2% from the previous week. Iowa has one of the strongest soybean crops at 84% good to excellent, up 2% from the previous week. Kansas improved 4% to 68% good to excellent. Nebraska soybeans dropped 1% to 77% good to excellent.

Winter wheat is almost completely headed at 96% nationally. That is just 1% behind the five year average. Kansas is now officially 100% headed out.  That is even with the five year average. Nebraska saw 11% of the winter wheat crop head out since last week to 96%. That is still 2% from the five year average. Montana and Michigan are the only 2 states that have not reached 90% or better headed out for winter wheat.

Winter wheat harvest continues across the country now considered 29% complete, up 14% from the previous week and 16% from a year ago. It is also 3% ahead of the five year average. Nebraska has yet to start winter wheat harvest. Kansas has harvested 25% of the winter wheat crop. That is up 16% from last week and 1% ahead of the five year average.

Nationally the winter wheat crop continues on a roller coaster of condition. Nationally the crop improved 2% to 52% good to excellent. Kansas winter wheat dropped 1% to 44% good to excellent. Nebraska increased 19%, after dropping 23% last week, to 62% good to excellent. Colorado winter wheat dropped 2% to 29% good to excellent. 37% of the crop is considered poor to very poor.

Spring wheat decreased in condition week to week at 75% good to excellent. That is down from 81% good to excellent.

Pasture and range land also benefited from the weekend rains. Nebraska pasture improved 5% to 71% good to excellent. Kansas improved 1% to 50% good to excellent. Colorado pasture is still dry with 0% in the excellent category and 26% in the good category. Colorado has the third highest very poor to poor rating at 48%. California (55% p-vp) and New Mexico (59% p-vp) are number one and two.

Topsoil moisture was able to recharge in Kansas up 14% to 61% adequate to surplus. Nebraska remained unchanged to 62% adequate to surplus. Subsoil moisture was also able to improve in Kansas up 4% to 63% adequate to surplus. Nebraska subsoil moisture improved 1% to 75% adequate to surplus.

Find the full crop progress report here: https://downloads.usda.library.cornell.edu/usda-esmis/files/8336h188j/w9505n13w/8910kf14z/prog2620.pdf  

Clay Patton has the full report information as a podcast

 

Markets on Tuesday started with a risk on sentiment. By the close even the outside equities had faded on that sentiment. Grains ended mixed with spread action setting up between corn and wheat. Wheat is being sold on decent crop conditions, but also seasonal harvest market pressure. Shawn Hackett, Hackett Financial Advisors, joined the Fontanelle Final Bell and discussed the seasonality of the current marketing trends in the grains. Hackett is eyeing the Minneapolis spring wheat market as the signal for a turn around in the market. “Spring wheat is growing right now and very susceptible to a weather issue.” According to Hackett. During the Fontanelle Final Bell Hackett also highlights recent research his team has done about global crop insects and pests that could impact the markets later this year.

The second half of the Fonatenelle Final Bell is dedicated to livestock. Hackett starts with Class III milk futures and highlights that the recent upswing may be over done at $20. Hackett also doesn’t believe the live cattle lean hog spread can continue much higher.

Hear the full program here:

The latest crop progress report shows the hot and dry weather in the Midwest has yet to impact major crop conditions. It has though significantly dropped the top and subsoil moisture. Winter wheat harvest continues to roll on pace with it’s five year average doubling week to week.

Corn planting is considered complete by NASS across the country. Thus the crop progress report this week starts off with corn emergence, which like planting, is nearly complete. 95% of the countries corn crop has emerged – 3% ahead of the five year average. Kansas has seen 95% corn emergence – an increase of 9% from the previous week. Nebraska has 98% corn emergence – just 2% ahead of the five year average. While several states are at the 98-99% emergence rate, only one state has reached 100% emergence. That is North Carolina which only needed 2% more to emerge from last week to reach 100%.

Nationally, the corn crop did see a slight drop in condition rating going from 75% good to excellent to 71% good to excellent. Kansas corn condition fell 6% from last week to 54% good to excellent. Nebraska’s corn rating fell 12% to 71% good to excellent. Pennsylvania still runs one of the strongest corn crops in the nation at 91% good to excellent, improving 1% since last week.

The soybean planting report was still released this week, but it is quickly nearing the 100% mark. Nationally 93% of the soybean crop is planted, up 7% from last week and 5% ahead of the five year average. Nebraska inched 2% week to week to officially finish soybean planting. Kansas improved 10% week to week to 89% complete. That is 13% ahead of the five year average.

Soybean emergence continues 6% ahead of the five year average nationally at 81%. Nebraska soybean emergence is now rated at 94% – 10% ahead of the five year average. Kansas opened it’s lead on the five year average to 20% this week with 73% of the soybean crop already emerged. No state has hit the 100% emergence rating yet.

The national soybean condition is rated 72% good to excellent, equal with the rating a week ago. Nebraska soybeans dropped 4% from 82% yo 78% good to excellent. Kansas soybean rating fell 3% to 64% good to excellent. Iowa saw a large drop week to week on the soybean rating. Going from 82% good to excellent last week to 72% good to excellent this week.

Grain sorghum planting is continuing at a steady pace, up 15% from last week nationally to 79% good to excellent. Nebraska sorghum planting is 9% ahead of the five year average to 97% complete. National sorghum rating fell 7% to 48% good to excellent. Nebraska sorghum is rated 55% good to excellent.

Winter wheat is almost completely headed out. Nationally 91% of the crop is considered headed out. Nebraska is still lagging 7% from the five year average to 85%. Kansas is right on pace at 99% headed out. Montana is the furthest from being completely headed out at only 28%. That is up 23% from last week, but 19% behind the five year average.

Winter wheat harvest doubled week to week from 7% to 15% complete. Right on pace with the five year average. Kansas is 1% ahead of the five year average at 9% complete. Nebraska has yet to start winter wheat harvest. Texas is the furthest along with winter wheat harvest at 38% complete. Up 15% from last week and 16% ahead of the five year average for Texas.

The winter wheat crop is rated 50% good to excellent down 1% from a week ago and down 14% from a year ago. Kansas winter wheat is rated 45% good to excellent. That’s an increase of 3% from last week. Nebraska is rated 43% good to excellent. A drop of 23% from last week. Colorado is holding at 31% good to excellent, but 16% is still rated very poor. Oklahoma is the only other state with double digit very poor rating at 14% very poor. Oklahoma also has 46% of the winter wheat crop rated good to excellent.

Pasture and range condition is not fairing well in the heat and wind. Kansas pasture and range fell 6% to 49% good to excellent. Nebraska pasture and range also fell 6% to 66% good to excellent.

Topsoil and subsoil moisture both saw double digit drops week to week in several states. Kansas topsoil is now considered 47% adequate to surplus. Down 15% from last week. Nebraska topsoil moisture is rated 61% adequate to surplus down 16% from last week. New Mexico has the driest top soil with a 45% very short rating. Kansas subsoil moisture is rated 59% adequate to surplus down 9% from last week. Nebraska subsoil moisture is rated 74% adequate to surplus. That is down 12% from last week. Some state are still near saturated at the subsoil level. Alabama is rated 93% adequate to surplus for subsoil moisture.

See the full crop progress report here: https://downloads.usda.library.cornell.edu/usda-esmis/files/8336h188j/pk02cx87g/rx914b27v/prog2520.pdf

Clay Patton recaps the report here:

 

An emergency motion was filed late last week, asking a federal court to bring all dicamba use in the U.S. to an immediate halt. DTN says the motion also asks that the Environmental Protection Agency be held in contempt of court for its decision to permit farmers to use their existing stocks of three dicamba herbicides.

If the judge agrees, that could once again leave farmers without the dicamba herbicide options they need to use on millions of acres of dicamba-tolerant soybeans and cotton through the summer growing season. The emergency motion was filed by the same plaintiffs who brought the lawsuit against the EPA in the Ninth Circuit Court of Appeals.

The suit demanding the court bring an end to the registrations of three dicamba herbicides succeeded on June 3rd when the judge ruled in the plaintiffs’ favor. Five days after that, the EPA issued a cancellation order, ending the registrations but allowing farmers and applicators to continue to use existing stocks until July 31st.

The plaintiffs, including the Center for Food Safety and the Center for Biological Diversity, estimated that up to 16 million pounds of dicamba could be applied in the coming weeks, which they say is a direct violation of the court’s ruling.

June 12th Update:

 

According to the Friday alert from Nebraska Extension, soybean gall midge adults have emerged from multiple sites in eastern Nebraska. The June 12th update indicates soybean gall midge adults have emerged in monitoring sites in Cuming County (1 adult detected), three sites in Saunders County (1 adult at each), two sites in northern Landcaster County (1 adult at one site, 2 adults at the other site), and in Cass County (2 adults at one site, 3 total adults at a different site). Also, the alert network website shows one soybean gall midge adult has been captured at sites in Cass and Ida counties in Iowa.

See the alert web site and latest information here: www.soybeangallmidge.org.

For soybean growers that are near the site with adult activity and that have had issues with soybean gall midge, they may consider making an application in the next week if their soybean fields have reached the V2 stage. Based on last year’s data from Nebraska Extension, soybean plants prior to the V2 stage generally lack the presence of cracks or fissures at the base of the stem. Plants without fissures are not considered to be susceptible to soybean gall midge infestation. If growers have fields at VC or V1, NE Extension Cropping Systems Specialist Justin McMechon recommends waiting until V2 to make an application if they are in a high-risk area and have adult activity occurring.

In 2019, pyrethroid insecticides applied at different timings relative to adult emergence showed a significant yield response in Nebraska when applied up to 10 days after the first adult emergence was detected. McMechon says it’s important to note that none of those treatments provided complete control of soybean gall midge. In addition, the study was conducted on a field that was planted to soybean the previous year. Since soybean gall midge is a field edge infesting pest, growers may only need to treat the first 60 to 120 feet of a field edge that is directly adjacent to a field that was injured the previous year.

 

 

The Agricultural Retailers Association and the National Council of Farmer Cooperatives are asking the Environmental Protection Agency for clarification on dicamba.

Earlier this week, the EPA issued a cancellation order on the use and distribution of dicamba products. The EPA says under the order that farmers or applicators with existing stocks of dicamba may apply the herbicide until July 31st. “While the agency’s cancellation order provided some guidance to end-users as well as applicators, it failed to address several scenarios where the product is still in the pipeline at various points in the supply chain,” the groups say in the letter.

“These questions will need quick answers during this critical time of the growing season as weeds will not wait for a protracted legal analysis.” An example of one of the scenarios the groups are referring to is a producer has pre-paid or contracted for the product before June 3 but hasn’t had it delivered yet. The letter also notes that multiple states allowed the continued sale and distribution of these products after the court’s decision.

Because the EPA order is retroactive to June 3, the industry needs guidance on whether or not farmers can use any product they bought between June 3rd and June 8th.