Grain Futures Update

News & commentary on Grain Futures markets including wheat, soybeans, corn & more.

Grain Futures Update is a blog dedicated to bringing updates, news and commentary on grain futures markets including the commodities wheat, corn, soybeans and more.

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How will the Farm Journal Crop Tour Effect Trade?

Posted on 8/17/2017 6:47:32 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

As we get ready to kick off the 2017 Farm Journal crop tour the grain markets are still reeling from the surprise increase in soybean yields and higher than expected corn yields on the August USDA WASDE report.  I have to say that I am very excited to be going on the tour for the first time, and after last Thursday's report I now feel like this is something I NEED to do.  The crop tour is usually a pretty big deal for the markets, but this year might mean something different.

On the USDA's August World Agricultural Supply and Demand Estimates (WASDE) report the USDA shocked the trade by only slightly lowering the corn yield and actually raising the soybean yield.  Based on the weekly crop conditions the trade was expecting a n almost 5 bushel an acre reduction in corn yield and a small decline in soybean yield.  It seems somewhat impossible for the 60% good to excellent conditions and the USDA's projected yields to coexist.  Either way the aftermath of the report sent corn, wheat and soybeans to new lows.

So now, the trade is not exactly sure what to think.  Crop conditions and the USDA's estimates really seem to contradict each other.  For the moment the trade has to trade what the USDA has given us.  But it feels like a large portion of the trade is skeptical about the numbers the USDA has given us.  Enter the 2017 Farm Journal Crop Tour.

At least some of the trade is desperately looking for answers as to why crop conditions and the USDA have painted much different pictures of this crop.  It seems the need for something to confirm or deny the USDA's estimates has never been higher.  And there is not much in a better position to do so than the biggest crop tour of the year and one that has been consistently fairly accurate.

This year the Farm Journal Crop Tour seems to be in a position to have a big impact on the market.  Who knows what we will find, but if things seem pretty close to the USDA's projections it will help justify the USDA and the lower prices we have seen in grains.  If, on the other hand, things look much different that the state averages the USDA has for the key states the Tour will be on then that could foster even more doubt about the USDA estimates.  In other words, all eyes on #FJTour17

Give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action.  Ted Seifried - (312) 277-0113.  Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.  Follow me on twitter @thetedspread if you like. 

December Corn Daily chart:

 

November Soybeans Daily chart:

December Wheat Daily chart:

 

Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie


Is the Trade Looking for Too Much of a Yield Reduction on an August WASDE?

Posted on 8/17/2017 5:53:31 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

As we get ready for the USDA's August World Agricultural Supply and Demand Estimates (WASDE) report all eyes will be on corn and soybean yields.  Yields are a huge part of the production equation and the August report is likely going to set the tone for months to come.  With the average trade guesses looking for an almost 5 bushel an acre reduction in the national average corn yield is the trade looking for too much?

The trade guesses themselves can be a little tricky.  It seems that when the big 3 news outlets ask for estimates it is a little unclear if they are looking for what the USDA might say on this particular report or if they are looking for a final yield estimate.  We participate in the surveys and we provide our estimate for what we think the USDA will say on the report but some of the respondents might be submitting estimates for the final number.

This makes a difference for two reasons:  For one, if weather gets better our yield estimate can still go back up.  Secondly, (and partly because of #1) the USDA tends to be conservative, at least in recent years, because they do not want to overshoot the mark.  So, in the case of this year, it could be the case that some of the estimates are lower then what the expectations are for this report.

A year that we have all been making comparisons to when it comes to crop conditions and yield expectations is 2011.  Now, it is important to note that there were a lot of very different factors in 2011 compared to 2017 and that the comparison should be limited to crop conditions and yield potential.  This year, similar to 2011, crop conditions started near 70% good to excellent and dropped to 60% or below with the biggest drop coming during the key moisture sensitive time of pollination.  This makes 2011 a likely analogue year to make comparisons to, and in 2011 the USDA aggressively dropped yield on both the August and September reports only to have to reverse themselves and move yield higher again by 4.6 bushels an acre for their final number.  For this reason the USDA has been more conservative recently and this could impact the August report.

So, with the average trade guess looking for a roughly 5 bushel an acre drop to 166 for a national average yield there is a possibility that the trade is expecting too much of a decline too quickly from the USDA.  Personally I think they should have enough compelling evidence in crop conditions to do so, but they may not.  But, even if they do not do it on the August report it might be more about the direction they are going.  I would say that even a modest drop in yield in the August report (even if it is less than expected) might be a good signal for what is to come of future reports.

Give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action.  Ted Seifried - (312) 277-0113.  Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.  Follow me on twitter @thetedspread if you like. 

December Corn Daily chart:

 

November Soybeans Daily chart:

December Wheat Daily chart:

 

Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie


GOOD WEATHER BUT IS IT TOO LATE! GOVT. & FARMER'S REPORTS DON'T SEEM TO AGREE

Posted on 8/16/2017 6:31:42 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

 

Lower closes for rough rice, corn, Minneapolis, Kansas City and Chicago wheat along with soybeans, soybean meal and soybean oil. REMEMBER MY SIGNALS ARE FOR LONGER TERM TRENDS WHILE MOST OF MY TRADING RELIES ON SHORTER TERM SIGNALS WHICH YOU WILL HAVE TO CONTACT ME FOR. Weather forecasts continue to be almost perfect but is it too late for corn in many areas? So far, the government doesn't seem to think so based on the different reports that have been coming out including the crop progress and WASDE reports. Obviously very few brokers like going out on a limb these days afraid of a backlash. So it looks like we are going to just have to wait for more field checking like a couple of our brokers are going to do with the PRO FARMER TOUR next week. Hopefully, we will all get a better handle on how much damage has really been done. It looks more and more likely we will just have to wait until harvest to get the correct evaluation. Now we see the grain complex, minus rough rice, retracing quite a bit as seen below. Minneapolis made its worst low and close since the end of June, KC since late April and Chicago December of last year. Minneapolis is now is approaching its 650 support area while KC and Chicago are in their respective critical support areas. Sharply increasing open interest isn't helping the latter two but decreasing open interest in Minneapolis could help stop its retracement soon. Also, Minneapolis not holding the seven dollar area could be a cause for alarm! Oats continue to look toppy after a possible failed bull triangle on August 2nd culmination so far in five consecutive lower closes along with seven out of its last nine. Now oats are in a minor looking support area.in the process which would mean lower prices ahead. Not holding the 275 area is a problem in my opinion. Rice has been holding up better than the rest of the grains but now could be in an M formation. It looks critical to hold the 1222.5 price in my opinion. Until then I will keep my buy signal. Decent support remains around twelve dollars and down. Corn had its worst low and close since Sept. 2016 while giving me a reluctant SELL SIGNAL because it is still in the same area overall for around a year. Look at the corn charts (daily, weekly and monthly) and please tell me what conclusions that you draw. Just don't take any long term positions as a speculator and literally buy low and sell high based off of what you see. Call me if you have any questions. The bean complex had its lowest low and close since the end of June. The beans need to hold 607 and meal 295.0 in my opinion. Either way I am removing most of my buy signals and standing aside at this time. Oil doesn't look as bad technically but that is more likely do to spreading against the meal than anything else. BUY SIGNAL ROUGH RICE. For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.

 

 

 


GOOD WEATHER BUT IS IT TOO LATE! GOVT. & FARMER'S REPORTS DON'T SEEM TO AGREE

Posted on 8/16/2017 6:27:48 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

 

Lower closes for rough rice, corn, Minneapolis, Kansas City and Chicago wheat along with soybeans, soybean meal and soybean oil. REMEMBER MY SIGNALS ARE FOR LONGER TERM TRENDS WHILE MOST OF MY TRADING RELIES ON SHORTER TERM SIGNALS WHICH YOU WILL HAVE TO CONTACT ME FOR. Weather forecasts continue to be almost perfect but is it too late for corn in many areas? So far, the government doesn't seem to think so based on the different reports that have been coming out including the crop progress and WASDE reports. Obviously very few brokers like going out on a limb these days afraid of a backlash. So it looks like we are going to just have to wait for more field checking like a couple of our brokers are going to do with the PRO FARMER TOUR next week. Hopefully, we will all get a better handle on how much damage has really been done. It looks more and more likely we will just have to wait until harvest to get the correct evaluation. Now we see the grain complex, minus rough rice, retracing quite a bit as seen below. Minneapolis made its worst low and close since the end of June, KC since late April and Chicago December of last year. Minneapolis is now is approaching its 650 support area while KC and Chicago are in their respective critical support areas. Sharply increasing open interest isn't helping the latter two but decreasing open interest in Minneapolis could help stop its retracement soon. Also  Minneapolis not holding the seven dollar area could be a cause for alarm! Oats continue to look toppy after a possible failed bull triangle on August 2nd culmination so far in five consecutive lower closes along with seven out of its last nine. Now oats are in a minor looking support area.in the process which would mean lower prices ahead. Not holding the 275 area is a problem in my opinion. Rice has been holding up better than the rest of the grains but now could be in a M formation. It looks critical to hold the 1222.5 price in my opinion. Until then I will keep my buy signal. Decent support remains around twelve dollars and down. Corn had its worst low and close since Sept. 2016 while giving me a reluctant SELL SIGNAL because its still in the same area overall for around a year. Look at the corn charts (daily, weekly and monthly) and please tell me what conclusions that you draw. Just don't take any long term positions as a speculator and literally buy low and sell high based off of what you see. Call me if you have any questions. The bean complex had its lowest low and close since the end of June. The beans need to hold 607 and meal 295.0 in my opinion. Either way I am removing most of my buy signals and standing aside at this time. Oil doesn't look as bad technically but that is more likely do to spreading against the meal than anything else. BUY SIGNAL ROUGH RICE. For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.

 

 

 


NOT MUCH OR NO RAIN BUT COOL WEATHER PREVAILS. WASDE REPORT ON THURSDAY!

Posted on 8/9/2017 6:12:33 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

 

Higher closes for rough rice, corn and soybean oil while lower closes for Minneapolis, Kansas City and Chicago wheat along with oats along with soybeans and soybean meal. REMEMBER MY SIGNALS ARE FOR LONGER TERM TRENDS WHILE MOST OF MY TRADING RELIES ON SHORTER TERM SIGNALS WHICH YOU WILL HAVE TO CONTACT ME FOR. Weather forecasts continue to be cool with a lack of rain but still putting pressure on the grain complex overall in spite of what farmers have been saying. How much damage has really been done? It looks more and more likely we will just have to wait until harvest to get a better handle on the situation. The complex basically has just been consolidating since last my Wednesday's report making me scramble for something pertinent to say. Minneapolis did have its best high and close in a week even if still in the same trading range for the last couple of weeks. I do expect a test of July 5th's high to still happen but that's just my opinion. There is also little support down to the 560 area. With that being said I also feel Minneapolis needs to hold the seven dollar area because there really isn't much support all the way down to the 560 area I'VE ALSO NOTICED OPEN INTEREST STILL ON THE INCREASE FOR THE WHEAT COMPLEX WHICH COULD BE SIGNALING MORE LOWER PRICES TO COME IN THE NEAR FUTURE. Oats look toppy and could have had a failed bull triangle in the process which would mean lower prices ahead. Holding the 275 area remains imperative in my opinion. Rice has had a decent correction since my last report and remains in a uptrend overall after bouncing off its nearest support area on Monday. Actually rice could be in a possible up channel started in June. Decent support remains is around twelve dollars and down. corn remains in the same area its been trading around for a year and counting. Look at the corn charts (daily, weekly and monthly) and please tell me what conclusions that you draw. Just don't take any long term positions as a speculator and literally buy low and sell high based off of what you see. Call me if you have any questions.The beans and meal bounced off the upper ends of their respective support areas last week while remaining in the same price area as a year ago believe it or not! Continue to stand aside since the WASDE REPORT is coming out on Thursday. At least both the beans and meal filled their gaps getting that thorn out of the way if you are bullish. Oil, on the other hand, continues to look good making higher highs and lows since the beginning of June. BUY SIGNALS FOR MINNEAPOLIS, KANSAS CITY AND CHICAGO WHEAT ALONG WITH OATS, ROUGH RICE AND SOYBEAN OIL. For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.

 


Will the USDA Lower Yield on the July WASDE?

Posted on 8/8/2017 4:04:06 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

This growing season has had it's fair share of issues.  A wet planting season followed by periods of hot an dry has cause some crop stress, especially in the Northern Planes.  With crop conditions coming down going into the July World Agricultural Supply and Demand Estimates report the question is - Will the USDA lower yields for corn and soybeans?

As of July 9th soybeans are rated 62% good to excellent compared to 71% last year at this time.  While this is a significantly lower crop rating than last year the key development state of soybeans is not until August.  For that reason the USDA has historically been very reluctant to change soybean yields earlier in the growing season.  For the last 15 years the USDA has left the soybean yield unchanged on the July report almost every year with one notable exception - 2012 when the soybean crop was rated at a miserable 40% good to excellent (on July 9th 2012).

For corn there is a similar situation as far ac current conditions go.  As of July 9th the corn crop was rated at 65% good to excellent compared to 76% last year at this time.  Here too the USDA has been reluctant to make big changes on yield in July reports because July is the key development month for corn.  While historically there are a few more changes in yield in the July report than for soybeans the changes are mostly small with again one exception - 2012 when corn conditions were also only 40% good to excellent.  Other small changes came in 2003 when they raised yield 3 bushels an acre and in 2005 when they lowered yield 3 bushels an acre.

It seems rather unlikely that we will see much of any change in the soybean yield on the July WASDE report.  Corn is more interesting, but again the USDA prefers to play it safe and punt for the August report where we can see bigger adjustments.  While it is possible that the USDA feels the recent decline in corn conditions and the 11% lower good to excellent rating could justify lowering the yield it seems that more than a 3 bushel an acre reduction would be a big surprise.  And again, more often then not (14 of the last 17 years) they leave it unchanged.

Give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action.  Ted Seifried - (312) 277-0113.  Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.  Follow me on twitter @thetedspread if you like. 

December Corn Daily chart:

 

November Soybeans Daily chart:

December Wheat Daily chart:

 

Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie


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