Posts Tagged ‘USDA report’

Corn Futures May Soon Have to Price in Midwest Crop Damage

Corn futures are trading within last month’s USDA crop production report’s price range for that particular day, but corn farmers in the Midwest are reporting crop damage due to first, soaking rains in late spring/early summer, followed by a hot and dry August. Corn futures are trading down .06 cents currently at $3.69 per bushel at the Chicago Board of Trade.

A farmer that says he grows corn in Illinois on 1,500 acres calls his progress “a mix of the good, the bad, and the ugly” with normal-sized ears, but just as many plants hit with disease and/or lack of nutrients, or just plain dying on the vine. There are reportedly similar results appearing across the Midwest because of the crazy weather, so this isn’t a micro-regional situation.

The trend for corn futures is down, however the $3.65 area is offering strong support since late May. Corn futures is testing this support again, but if $3.57 fails there’s no bottom in sight.

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Commodity Crop Markets a Hot Potato for Hedge Funds

Hedge funds are reportedly bailing on crop commodity markets such as the grains and cotton while the USDA reports excess supply adding to inventories. The grain markets have closed mixed today after an initial sell-off in the overnight markets, but cotton has been weak all during this trading session and is currently down 285 points to close the day near .6406 cents per pound at the Intercontinental Exchange.

For five straight weeks now the USDA has reported professional funds downsizing their bets for higher crop prices when in fact markets such as corn, soybeans, and wheat are seeing a reported combined slowing demand amid bumper global harvests. The “bullish” holdings have reportedly dropped 67% in five weeks!

All of the grain markets that are followed here are in down-trends with no bottom yet in sight. Cotton futures, however, appear to be resuming its overall downtrend just when a bullish scenario had been unfolding.

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USDA Report a Shocker, Sends Corn Futures & Soybean Futures Limit Down

Corn futures and soybean futures initially went limit down following today’s USDA Crop Production report which increased corn and soybean yield estimates significantly. Corn futures ended the trading day down .195 cents at $3.68 per bushel and soybean futures down .615 cents to end the trading session at $9.10 per bushel at the Chicago Board of Trade.

Today’s report is the first survey-based yields for corn and soybeans which obviously came in much greater than analysts had predicted. For corn, the yield is estimated at 168.8 bushels per acre – much higher than the anticipated average of 164.5; and soybeans now have a current yield estimate of 46.9 bushels per acre when experts were expecting an average 44.7 bushels per acre.

Corn futures and soybean futures trends are down with no bottom yet in sight. I expect these markets to fall further over the next two months as we get closer to the harvest period.

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Hog Futures: Bacon Demand Making Pork Belly Prices Soar

Hog futures may not reflect it now, but spot pork belly prices have been on a tear since May due to the many creative uses of bacon in restaurants which is helping demand, but also depleting supplies. Hog futures are down .65 cents (CWT) today currently trading at $62.32 per pound at the Chicago Mercantile Exchange.

Late last week, the USDA reported a one-year wholesale price high for pork bellies – nearly $1.70 per pound – with much of this price surge due to a 174% spike since making a five-year low just this past April. Pork belly prices continued to make new lows despite the overall hog surge last year after a brutal virus required producers to cull a reported eight million (plus) piglets.

The technical trend for hog futures is at a crossroads – the trend is technically “up,” however lower-low prices tomorrow could turn the trend down. In the meantime, many of us can enjoy the benefits of relatively low pork prices while it lasts.

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India Set to Become World’s Top Cotton Producer: Cotton Futures

Cotton futures is having to negotiate a top cotton producer with India – a country surpassing the US and China as they are reporting double-digit acreage reductions for the 2015/16 season. Cotton futures are down 36 points today settling at .6364 cents per pound at the Intercontinental Exchange in New York.

Combined, the USDA says both China and India produce more than one-half of the world’s cotton, but now India’s “cotton climb” since it surpassed the US in cotton production in 2006 is expected to bring forth 26.5% of world supply. China has been the worlds top cotton producer since 1982, with Brazil and Pakistan rounding out the top five.

Cotton futures trend is technically down, but more choppy for more than the past four months. I would expect some type of rally in cotton futures soon where short-selling will be least risky.

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Grain Futures Post USDA Report Re-cap

Grain futures realized an initial boost in prices after Friday’s USDA crop production report, but have since cooled-off and returned to report day prices, and in the case of wheat futures, Kansas Wheat has since retreated even lower. All grain futures are down for the day between .02 to .09 cents for the day at the Chicago Board of Trade..

The USDA revised domestic corn inventories significantly lower for the 2014-15 season – almost 100M bushels lower. US soybean stocks revised down 75M bushels, and wheat reserves at the end of the 2015-16 season revised upward by 28M bushels.

The grain markets are all in uptrends that emerged and accelerated without any significant pull-back – all based on a weather related outlook. From what I understand the weather is changing with milder temperatures and the Midwest is getting all the rain the crops need to flourish. Maybe its time to reassess the grain market’s uptrend so late in the season…

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Soybean Futures Pullback for Fifth Session on Improving Crop Prospects

Soybean futures have sold-off everyday since the June 30th spike in price reportedly due to an upbeat crop outlook in the Midwest. Soybean futures extended their lows today to just under $9.79 per bushel at the Chicago Board of Trade – soybean prices not seen since late June.

The USDA surprised analysts by reportedly stating almost 63% of the domestic soybean crop was rated in good to excellent condition as of last Sunday. Compare this to soybean emergence reported at 93% complete which is an improvement from 89% the week earlier, and 21% of the soybean crop blooming which is up from 13% in the prior week.

The trend for soybean futures is up with no top yet in sight. Despite the sell-off from the late June high, this appears to be an opportunity for those bullish this market to find a position soon.

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After USDA Acreage & Planting Report, Wheat Futures Pause

Wheat futures have stalled after reaching six-month highs following Tuesday’s major USDA crop progress report and the concern over the pace of the harvest. Wheat futures today are down one cent (as of this writing) currently trading at $5.875 per bushel – off .30 cents from Tuesday’s post-report, six-month high.

Traders rallied wheat (futures) prices into, and after, the USDA announced two key reports on acreage committed to certain grains and crops, plus quarterly stock inventory. Even before the report was released the last day in June, wheat prices had already soared 23% on the outlook that excessive rainfall in the Midwest will damage crops and delay the pace of harvesting.

The trend in wheat futures is clearly up, but at the beginning of last week this wasn’t the case. Wheat futures came out of a down-trend on this current speculation, and there is no top yet in sight…

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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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Soybean Futures Breakout to Five Week High Over Crop Conditions

Soybean futures have had a two-day breakout to the upside to prices not seen since early last month on the outlook of current crop conditions. Soybean futures are up an additional .10 cents today currently trading at $9.375 per bushel (as of this writing) at the Chicago Board of Trade.

There are weather concerns going on in the US’s soybean growing region and as of June 14th, the USDA rated the domestic soybean crop 67% good to excellent condition – down from 69% the week prior and down from 73% the preceding week before that. To make matters just a little bit more interesting, the USDA also reports only 87% of the soybean crop planted which is just shy of the 90% five year average.

Soybean futures technical trend remains down, but is at a crossroad in my work. Should soybean futures trade above today’s high in the next few sessions (without trading back down to the $9.10 area first), then the trend dynamics would change to up (again, in my study).

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