Posts Tagged ‘grain complex’

Soybean Futures at Risk with the Drop of Brazilian Real

Soybean futures have been put on notice coming into the northern hemisphere harvest, but in the southern, the currency crisis in Brazil has been a boon to soybean farmers there looking to unload their crop. Soybean futures, down four out of the last five trading sessions, is holding steady (up just over a penny) currently near $8.62 per bushel at the Chicago Board of Trade.

The Brazilian Real has fallen to a record low compared to the US Dollar, but the fall of the currency is setting-up favorable conditions for farmer’s there to see record high soybean sowings, despite early dry weather conditions. This Brazilian currency crisis, which provides great support for those farmers, may be an Achilles heel to farmers elsewhere with soybeans plentiful in supplies and stocks.

Soybean futures’ trend is down with no bottom yet in sight, however, the market is approaching long-term support that goes back to late 2012/early 2013. With harvest period in sight, I expect soybean futures to remain choppy to down at best until clearer fundamental conditions are learned after harvest.

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Soybean Futures Seasonal Trend Can Change With Planting Schedule

Soybean futures usually follow corn in planting each season, but a Midwestern field agronomist is touting a change in this long held view in an effort to produce higher yields than customary. Soybean futures are up .11 cents today, currently trading just above $9.53 per bushel at the Chicago Board of Trade.

The challenges to planting soybeans earlier than normal include labor logistics and equipment modifications, however an expert says certain key factors in understanding better results for plant “canopy closure” will provide soybean farmers better yields. She says for this to happen there must be an “increase in soybean nodes and pods per plant” which brings us back to the need for farmers to better understand canopy closure in their fields.

The trend for soybean futures is down and a relief rally appears to be emerging at this time. Soybean futures 18-day moving average is about .25 cents higher, so there may be higher prices near-term.

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Rally Extended for Corn & Wheat Futures

Both corn futures and wheat futures have extended their gains from Monday’s & Tuesday’s sharp rallies on the outlook of crop conditions in the Midwest. Corn futures are making new highs currently trading at $3.8425 per bushel, and wheat futures are near their highs at $5.3325 per bushel at the Chicago Board of Trade.

The pace of the winter-wheat harvest has traders concerned because, according to the USDA, only 19% of the crop was harvested as of Sunday – 31% is the five-year average for this time of year. With corn, the USDA has down-graded its crop-rating to 71% (from 73% a week earlier) with a good to excellent condition.

Corn & wheat futures trend is technically down at this time, but more “sideways” for at least the past two months. The corn futures & wheat markets must be traded with caution until a clearer trend picture unfolds.

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Global Supply Outlook Sends Grain Futures Lower

Both corn futures and wheat futures extend their losses from late last week to reach two-week lows on a positive outlook for global supplies yesterday. Soybean futures were also down, but all grains have reversed course today (as of this writing) at the Chicago Board of Trade.

The USDA recently raised their outlook for domestic and global wheat supplies, and also stating global wheat inventories for next season are expected to rise nominally. July Corn has reached prices not seen since last June after the USDA said pretty much the same thing.

The trend for our grain futures markets are down with an exception of wheat futures – they’re in what appears to be a failed up-trend. No bottom yet in corn futures, and soybean futures could be putting in a bottom, however, a clearer picture needs to unfold.

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Wheat Futures Hit Two-Month High, Reverse Course After USDA

Wheat futures reached highs not seen since early April in its renewed uptrend, and just before the monthly USDA Crop Production was released. Wheat futures did an about-face just prior to the report and closed down almost .20 cents for the day just below $5.13 per bushel at the Chicago Board of Trade.

The trade expected the USDA to raise their estimates for both corn and wheat supplies, and lower the outlook for soybeans in this current crop season. The released estimates for these markets were indeed confirmed, but the market sold off thereafter.

The trend for both hard & soft-red winter wheat is up with soft-red stronger of the two. In my view, the wheat market’s rallied early this year due to the heavy rains in the Central Plains – prime wheat growing country and the result of these down-pours still has yet to be seen…

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Grain Futures Rise Despise Ideal Weather, Planting Progress

Grain futures are higher today on what is reportedly said to be “short covering” – traders unwinding “bets” that grain prices will fall further. Soybean futures lead the way (so far) up .15 cents for the day near their high of $5.09 per bushel at the Chicago Board of Trade.

The USDA said yesterday that most of the crops (spring & winter wheat combined), corn & soybeans have been planted, and emergence coming along greatly. Gov’t figures show corn to be the US’s biggest crop, then soybeans, and then wheat (actually behind #3 – “hay”).

As mentioned above, the trends for corn, soybeans, and CBT Wheat remain down (while KCBT Wheat is actually “up” in my work). This is the time of year when corn and soybeans rally into the fourth of July period, however, this is a different year than others with ample supply in each of these markets already a factor.

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Planting Progress Sends Soybean Futures to Seven-Month Low

Soybean futures have extended their lows today to prices not seen since October as signs of rapid soybean planting progress is taking place across the Midwest last week. Soybean futures are down .04 cents today currently trading near $9.42 per bushel at the Chicago Board of Trade.

The USDA has reported nearly 45% of the domestic crop being planted as of this past weekend, which is up a whopping 31% from the week prior. At this same time last year, coincidently nearly 31% was planted. The five-year average is “36%” so you can see we’re well above this too.

Soybean futures trend has resumed down after much sideways trading for the better part of the past two-and-a-half months. I will need some type of pull-back higher before I can enter the short side of this market…

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Soybean Futures Initially Rise With Soy Oil Demand

Soybean futures initially rallied for a third straight trading session with the strength of soybean oil demand, but both markets have since retreated and are just below unchanged as of this writing. Soybeans reached a price of $9.90 per bushel earlier in the trading session when soybean oil futures extended their three-day gain at the Chicago Board of Trade.

Soybean futures is considered the “parent” contract of both its by-products – soybean oil, made from pressed soybeans, and soymeal, the left-overs once the oil is removed used for livestock feed. The rally and demand of soybean oil was up as much as 6% twice this week.

Soybean futures have rolled over to a technical uptrend only last week with lack of follow-through. We can expect more range-bound until July Soybean futures can break through resistance at $9.95, or support at $9.60 per bushel.

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Six-Month Lows on Planting Progress for Corn Futures

Corn futures extended their lows to prices not seen since October once the USDA released the latest planting progress statistics from last week. Corn futures are currently down just over .04 per bushel at $3.57 at the Chicago Board of Trade.

Evidently the planting progress showed farmers busy at a “rapid pace” in the Midwest with 55% of the domestic corn crop planted. Compare this to nearly 28% of corn planted this time last year, and the five-year average of 38% for this time of year.

The trend for corn futures remains down with no bottom yet in sight. I suspect corn futures will be due for some type of relief rally soon…

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Grain Futures May Be Seeing Valuation Buying

Both corn futures and wheat futures may be experiencing buying demand from their recent lows at what may be considered bargain prices from the last six months. Both grain futures began the day extending their gains from the last couple of days, but have since turned lower to close down for the day at the Chicago Board of Trade.

Corn futures fell to nearly $3.62 per bushel Tuesday which is its lowest level since early March and is down about 2% this month. Wheat futures saw a contract low of $4.6375 on Tuesday with favorable forecasts in the key wheat growing regions, and this market is on track to have dropped 5% this month.

Corn futures and wheat futures are clearly down with no bottom yet in sight. Looking for a retracement higher in these grain markets before getting onboard the short side.

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