Wheat, corn struggle as beans run
Wheat To start the week, wheat started higher because of spillover buying from a stronger overnight session and spillover buying from the other grains. Wheat did not have news of its own to trade, so it had to rely on the news of the other grains...
To start the week, wheat started higher because of spillover buying from a stronger overnight session and spillover buying from the other grains. Wheat did not have news of its own to trade, so it had to rely on the news of the other grains. The Aug. 30 session saw wheat struggle to hold gains. Bearish weather forecasts caused most of the damage to wheat as rain start to move into the Southern Plain states. Additional selling pressure as tied to a stronger dollar. Losses were kept in check by news of a 102,500 metric-ton export sale of wheat to an unknown destination.
Wheat started the Aug. 31 session sluggish in the winter wheat contracts and traded on the defense for most of the session. Minneapolis traded with small gains. By midsession, most of the wheat exchanges were able to push to the push side. Early selling pressure was a result of favorable weather forecasts. Chicago never was able to trade on the plus side as heavier-than-expected deliveries kept that market on the defense. The lack of deliveries and strong commercial interest in the September Minneapolis helped that month trade sharply higher.
The Sept. 1 session had wheat start lower because of profit taking and technical pressure. Additional selling was tied to a stronger U.S. dollar and from forecasts calling for rain. But in the end, it was technical selling that pushed wheat lower as sell stops were triggered once wheat traded through support lines.
As of Aug. 28, spring wheat harvest was estimated at 50 percent complete compared with 29 percent last week and 71 percent for the five-year average. Spring wheat's crop condition rating dropped 1 percent to 61 percent good/excellent, 30 percent fair and 9 percent poor/very poor. Winter wheat harvest progress is estimated at 97 percent complete compared with 94 percent last week and 99 percent for the five-year average.
To start the week, corn opened higher. December made another new high with continued talk of smaller yields. Most private estimates are coming in below 150 bushels per acre for this year's crop, and talk continues about tight stocks going into 2012. Traders are anticipating a 1 percent decline in corn's crop condition rating.
Corn opened lower Aug. 29 but recovered to end higher. The market was under pressure early from technical selling because of the market being overbought. But the rally in the soybeans and lower crop condition rating brought buying interest back into the market.
Corn opened lower Aug. 30 and traded there for the session. The corn market is overbought and profit taking pressured the trade. There also is rain in the forecast and lower temperatures for the Midwest. Private estimates continue to come in with yields below 150 bushels per acre and that does limit the downside.
Corn opened lower and struggled for the Sept. 1 session, ending sharply lower. The market traded with small losses early in the session, but the market eroded from there and into the close. Pressure came from profit taking and as the market worked lower additional sell stops were hit. Early harvest reports out of Illinois have corn yielding better than expected. The corn was early-planted corn, in April, and then rain caused most of the crop to be planted in May. Harvest should pick up, and the market will be closely watching those yield numbers.
Ethanol production for the week ending Aug. 26 averaged 888,000 barrels per day. This is down 1.77 percent vs. last week and up 3.74 percent vs. last year. Total ethanol production for the week was 6.216 million barrels. Corn used in last week's production is estimated at 94.59 million bushels. This crop year's cumulative corn used for ethanol production for this crop year is 4.88 billion bushels as compared with 5.02 billion bushels as the USDA forecast for the season. Stocks were 17.893 million barrels and down 1.92 percent vs. last week.
USDA's crop progress report estimated corn's crop conditions rating at 54 percent good/excellent, 27 percent fair and 19 percent poor/very poor, down 3 percent in good/excellent from last week. Corn in the dough stage came in at 88 percent, compared with 73 percent last week and 85 percent for the five-year. Corn that was dented was at 53 percent, compared with 33 percent last week and 54 percent for the five-year average. Corn that was mature was at 9 percent, compared with 17 percent one year ago and a five-year average of 11 percent.
For the week, November soybeans gained 11 cents. For the month of August, soybeans gains $1.
The soybean market started the week with good gains. Early support came from a weaker U.S. dollar, but most of the strength was a result of weather forecasts for hot dry conditions for the Corn Belt. This likely will lower pod filling. The funds also are seeing potential in soybeans market as they added more than 49,000 long contracts to their holdings last week, the largest increase since July 2010.
The Aug. 30 session started off steady to slightly lower. Early selling was tied to a weaker overnight session and technical selling. Additional selling came from position squaring as traders roll out of September. By midsession, soybeans started to firm with production concerns again taking center stage. Weather forecasts are calling for rain to move into parts of the Corn Belt, but not until after a few more days of heat. By the close, most contracts were posting new highs and levels not seen since 2008.
The soybean market opened the Aug. 31 session mixed but managed to trade on both sides of the fence throughout the session. Pressure was a result of weather forecasts that are calling for improving weather conditions as rain is expected to fall over much of the Corn Belt. Some traders are discontinuing the rain event as higher temperatures are expected to move into much the eastern Corn Belt the next few days. Technical pressure limited session gains.
The Sept. 1 session had soybeans on the defense with technical selling and profit taking causing most of the selling pressure. Soybeans have traded to new contracts highs without much of the setback, so seeing some sort of correction is not a bad thing and very much needed to clean the market up and to help allow for new traders to enter the market.
As of Aug. 28, pod setting is estimated at 93 percent complete compared with 83 percent last week and 94 percent for the five-year average. Soybean crop condition rating dropped 2 percent to 57 percent good/excellent, 28 percent fair and 15 percent poor/very poor.
USDA reported no barley shipments for last week. Last week, no barley export sales were reported.
As of Aug. 28, barley harvest was reported at 46 percent complete compared with 25 percent last week and 70 percent for the five-year average. Barley's crop condition rating was unchanged at 66 percent good/excellent, 26 percent fair and 8 percent poor/very poor.
USDA reported last week's durum export shipments pace at 1.235 million bushels with Germany getting 278,000 bushels and the remaining 957,000 bushels going to Italy. Last week's durum export sales pace was estimated at a negative 700,000 bushels (cancellation).
As of Aug. 28, 82 percent of North Dakota's durum crop was turning compared with 59 percent last week and 95 percent for the five-year average. North Dakota's durum crop condition rating dropped 8 percent to 63 percent good/excellent, 30 percent fair and 7 percent poor. North Dakota on average produces about 67 percent of the nation's durum.
The Sept. 1 cash bids for milling quality durum were at $12 in Berthold, N.D., while bids in Dickinson, N.D., were at $11.55.
Canola futures on the Winnipeg, Manitoba, exchange ended the week ending Sept. 1 with $6 gains. The canola market opened the week with strength as harvest results start to come in showing lower-than-expected yields. Additional support was a result of spillover strength from a sharply higher U.S. soybean complex. Gained were kept in check by hedge selling pressure as harvest activity starts to pick up in Canada.
As of Aug. 28, 30 percent of North Dakota's canola was harvested compared with 6 percent last week and 44 percent for the five-year average. North Dakota's canola crop condition rating was unchanged at 75 percent good/excellent, 20 percent fair and 5 percent poor.
The Sept. 1 cash canola bids in Velva, N.D., were at $26.04.
As of Aug. 28, the following states were reporting dry bean crop progress: ND: 24% of crop had leaves turning color compared to 8% last week and 59% for the five year average, conditions improved 5% to 56% g/e, 32% fair, 12% p/vp; MN: 24% of crop had leaves turning color compared to 11% last week, conditions declined 8% to 60% g/e, 28% fair, and 12% p/vp; NE: 24% of crop had leaves turning color compared to 0% last week and 34% for the five year average, conditions were unchanged at 64% g/e, 17% fair, and 19% p/vp; and MI: 20% of crop had leaves turning color compared to 0%, last week and 46% for the five year average, conditions improved 5% to 58% g/e, 27% fair, and 15% p/vp. Cash bids remain strong for pintos, navy, and black beans.
The Sept. 1 cash old crop sunflower bids in Fargo, N.D., were at $33.65, while new crop bids were $29.05.