ADVERTISEMENT

ADVERTISEMENT

Gains ahead of Thanksgiving

Wheat Wheat traded higher last week. For the week ending Nov. 26, December Minneapolis gained 15.25 cents, December Chicago gained 14.75 cents and December Kansas City gained 17 cents. As of 10:30 a.m. Nov. 28, wheat trade was 13 to 16 cents higher.

Ray Grabanski
Grabanski is president of Progressive Ag, a Fargo, N.D.-based hedge brokerage firm. Reach him at 800-450-1404.

Wheat

Wheat traded higher last week. For the week ending Nov. 26, December Minneapolis gained 15.25 cents, December Chicago gained 14.75 cents and December Kansas City gained 17 cents. As of 10:30 a.m. Nov. 28, wheat trade was 13 to 16 cents higher.

Wheat struggled Nov. 24, with most months ending lower. The market tried to open with gains, but turned lower quickly with spillover pressure from weakness in the corn and soybean markets. Additional selling was tied to another disappointing weekly export inspections estimate. Even though the amount of wheat shipped the previous week was close to the level needed to keep on track to meet U.S. Department of Agriculture projections, traders were disappointed. A sharply lower oats market added pressure, while a softer U.S. dollar kept losses in check.

Wheat struggled to start the session Nov. 25, but managed to uncover some buying strength after corn and soybeans turned higher. Early selling was tied to the lackluster export pace. Support later in the session was tied to not only the higher corn and soybean markets, but also the lower U.S. dollar. The Nov. 24 crop progress report provided light support, as well, after showing a 2 percent decline in wheat conditions. This shows the cold wintery weather had an effect on wheat.

Wheat opened and traded with strong gains Nov. 26, ignoring the losses in the soybean complex and sloppy trade in corn. In fact, the strength in the wheat market spilled over to help support corn Nov. 28. Production concerns continue to provide support to wheat. USDA dropped wheat's crop condition rating in its last crop progress report for the 2014 crop year and that helped encourage traders to work in a production concern premium into wheat. The recent cold and wintery weather across the Southern Plains has not only reduced potential wheat yields, it has resulted in less winter wheat getting planted, especially in the soft red winter wheat regions of the U.S. Light support also came from a lower U.S dollar, as well as from forecasts calling for extremely cold temperatures in much of the Black Sea region (which also could result in lower yields).

ADVERTISEMENT

As of Nov. 23, winter wheat emergence was estimated at 92 percent, compared with 87 percent the previous week and 89 percent for the five-year average. Winter wheat crop condition was estimated at 58 percent good to excellent, 36 percent fair and 6 percent poor or very poor, off 2 percent from the previous week.

USDA estimated wheat export shipments pace for the week ending Nov. 21 at 16.4 million bushels. This brings wheat's export shipments pace to 436.01 million bushels, compared with 643.58 million last year. Wheat export sales pace for the week ending Nov. 21 was estimated at 15.9 million bushels. This brings wheat's export sales to 610.4 million bushels, compared with 822.2 million last year. With 27 weeks left in wheat's export marketing year, shipments need to average 18.1 million bushels and sales need to average 11.7 million to reach USDA's 925-million-bushel estimate.

Corn

The corn market was mixed last week and the net result was near unchanged. Support came from a strong ethanol report and lower-than-expected yields in the late-harvested crop. The oats market was also under pressure, and the old adage is that oats knows where corn goes. On the technical side, it appears that corn and soybeans could be forming a head and shoulders formation. As of the morning of Nov. 28, the December contract was down 2 cents for the week, while the March contract lost 1.75 cents.

Corn started and ended the week with red ink as the futures lacked any buying interest and saw some pressure from talk of demand concerns with record crop potential. Export demand has been slow, but the Nov. 24 export inspections were slightly above USDA's estimate. Harvest is also coming to an end with 94 percent complete, ahead of the five-year average of 92 percent. The weather in South America is also favorable for crop development and has nothing threatening in it for the next three weeks.

The corn market bounced back on Nov. 25 and 26. Corn harvest is near complete, but there is still 6 percent of the crop in the field and that is where the snow is. There was also talk of lower-than-expected yields in the late-harvested crop in the Northern tier states. Additional support came from a strong ethanol report that showed corn use up from the previous week and record production, while the stocks were down. The strength in the wheat market also spilled over and the basis for corn has been firming.

Ethanol production for the week ending Nov. 21 averaged 982,000 barrels per day, up 1.24 percent from the previous week. Total ethanol production for the week was 6.874 million barrels. Corn used in production is estimated at 103.11 million bushels and needs to average 99.312 million bushels per week to meet this crop year's USDA estimate of 5.15 billion bushels. Stocks were 17.072 million barrels, down 1.52 percent from the previous week.

The crop progress report has corn harvest at 94 percent complete, compared with the five-year average of 92 percent.

ADVERTISEMENT

Soybeans

As of the Nov. 26 close, January soybeans were 8 cents higher for the week. At 9 a.m. Nov. 28, January soybeans were trading 3 cents higher.

Soybeans traded lower Nov. 24, despite another round of strong export sales. Demand seems set to remain solid in the near-term. On Nov. 24, USDA announced a sale of 235,000 metric tons of soybeans to China and 174,000 metric tons of soymeal to Thailand. The Nov. 24 crop progress report was expected to show the soybean harvest effectively complete.

Soybean trade was higher Nov. 25, with the reemergence of commercial buying providing support. The Nov. 25 active buying implied that export business continues to be done. South American progress and conditions appear set to continue to improve with better rains in the near-term. The crop progress report showed the harvest in the U.S. nearly complete at 97 percent, compared with 98 percent for the five-year average. Soybeans appear to be approaching a head and shoulders, which will bear monitoring in the coming days.

Soybeans traded quietly lower ahead of the Thanksgiving holiday. Demand for soybeans remains strong, as indicated by the basis firming and an announced sale Nov. 26 of 120,000 metric tons of soybeans to China. Commercial demand for soy meal continues to provide support, while crush margins remain strong domestically, as well.

The grain markets were closed Nov. 27 before re-opening Nov. 28. Early morning trade saw small gains in the soybean market, likely tied to another strong export sales report.

As of Nov. 23, soybeans harvested were at 97 percent, compared with 94 percent the previous week and 98 percent for the five-year average.

Barley

ADVERTISEMENT

USDA reported barley export shipments pace for the week ending Nov. 21 at 11,253 bushels, all going to Korea. This brings barley export shipments pace for 2014 to 3.09 million bushels, compared with 3.29 million bushels last year. USDA estimated export sales for barley at 14,000 metric tons.

For the week ending Nov. 26, cash feed barley bids in Minnepaolis were unchanged at $2.55 per bushel, while malting bids were at $7.35.

Durum

There were no export shipments reported the week ending Nov. 21 for durum. USDA estimated export sales for durum at 2.1 million bushels.

For the week ending Nov. 26, cash bids for milling quality durum were unchanged at $14 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was unchanged at $13.75.

Canola

For the week ending Nov. 26, canola futures on the Winnipeg, Manitoba, exchange closed lower with the front month January losing $1.10 to $429.90 (Canadian). Canola traded higher Nov. 24 and 25 with support from the Chicago Board of Trade soy complex, as well as a weaker Canadian dollar. Strong demand for canola and light farmer selling provided additional support. Nov. 26 trade was lower with pressure from weakness in CBOT soybeans, as well as position squaring ahead of the Thanksgiving holiday.

For the week ending Nov. 26, cash canola bids in Velva, N.D., decreased 11 cents to $17.44 per hundredweight.

Sunflowers

As of Nov. 23, 86 percent of the nation's sunflower crop was harvested, compared with 80 percent the previous week and 90 percent for the five-year average.

USDA estimated soybean oil export sales pace for the week ending Nov. 21 at 35.6 thousand metric tons. This brings the year-to-date export sales pace for soybean oil to 322.8 thousand metric tons, compared with 266.9 thousand metric tons for last year.

For the week ending Nov. 26, soybean oil futures were 79 cents higher to $33.48. Cash sunflower bids in Fargo, N.D., were up 35 cents on the week at $18.10 per hundredweight.

Related Topics: CROPSMARKETS
What To Read Next
David Karki of SDSU underlined that planting cover crops like rye is not so much about big yield increases, but it will make the land more tolerant of fluctuations in weather.
Navigator CO2 Ventures is hoping to streamline the application process in Illinois as they add an additional pipeline to the mix.
Rod Burkard now has the opportunity to compete in August at the national event in Pennsylvania.
Benson and Turner Foods will process cattle and hogs at Waubun, Minnesota, on the White Earth Reservation with the help of a USDA grant.