Anatomy of a grain trade

anatomy of a grain trade infographic

The global grain trading business is risky. Avalanches and mudslides can stop trains in their tracks. Striking union workers can halt grain loading at port. Freezing sea spray and high swells can delay ocean vessels for days. Commodity prices and costs shift constantly.

While those situations may be beyond a grain company’s control, there are countless other factors that a team of CHS experts successfully manages 365 days a year – always focused on efficiency, safety and profitability. (more…)

Weekly Grain Update – April 18, 2018

 

4/18/18

After Weeks of Volatility, Calmer Markets Prevail

After all of the volatility and turmoil over the last few weeks, all of a sudden, a calm environment has prevailed.  The potential trade disruptions between the US and China have simmered down and Argentina has finally received much needed rain.  The extreme basis strength that we witnessed over a week ago for Brazilian beans has cooled off significantly, and now reside at levels prior to the trade rift with China.  As the Brazilian bean basis has cooled down, so has the bean premiums at the Gulf.  Despite the bombing of Syria on Friday by the US, the ag markets really did not seam to be affected.  The funds continue to be long both corn and beans, roughly 175,000 contracts of each, and the managed money folks seems to be content with their current long positions, and not wanting to add more length at this time.  Bullish markets need to be fed continuously.  Since the funds are not buying more length, futures have been drifting lower, and as a result, the charts are turning down and look weaker than they have been in weeks.

Planting progress pegs the US corn crop at 3% planted vs 5% on average.  With the recent cold and wet weather as of late, US corn planting is anticipated to remain slow and behind.  However, the 8 to 14 day forecast is calling for warmer and dryer conditions across the Corn Belt.  This has allowed corn futures to drift lower as there is no immediate threat as of yet.  Additionally, the market knows the US farmer can plant huge volumes of corn in very short windows if forced to do so.  The biggest one week gain in corn planting occurred in 2013 where we planted 43% in one week.  Most years, a 33% gain in corn planting progress is the biggest 1 week gain during planting.  One thing is for sure though, if we get to May 1st and we still don’t have any corn planted, the corn market will react and possibly violently to add risk premium to December corn futures.  Until then, the stagnant futures are causing the basis in the interior to firm, as it will be required to do more of the work to move corn and beans.  Many processors of corn and beans have firmed their basis in the last week to try to stimulate movement.  Many times, when the farmer cannot plant corn, he does not sell cash or new crop grain until he gets his crop planted and emerged.  The result is a very disengaged farmer as we have right now.

Besides the lack of US corn planting, there are other weather concerns mounting around the globe:

  • Many HRW areas in Oklahoma and Kansas remain dry, with a very substandard wheat crop
  • Brazil has many areas that are starting to dry out and their 2nd corn crop will be affected
  • With the blizzard this week, there are many acres of spring wheat in the Dakota’s that will be planted to beans as the planting window closes rapidly.
  • We could see many corn acres switched to bean acres in the northern areas of the Corn Belt due to the snow and cold temps.
  • Argentina is now receiving decent amounts of rain which is delaying their bean harvest

 

I believe there is a better than average chance that the Corn Belt will lose corn acres and gain bean acres due to the cold / wet spring conditions.  The market still has not put much of a risk premium in December Corn futures as of yet.  In fact, it has been trading lower for the last week.  But the calendar will start to get more and more attention in the coming days, especially if the weather does not improve.  This whole scenario is bullish corn and bearish beans.

 

What Are The Charts Telling Us?

Here are the support and resistance levels for cash and new crop grains.  These are all futures levels as traded at Chicago:

Cash Corn – May 18 Corn Futures – Support at $3.80, Resistance at $3.92, Place Targets at $3.88

New Corn – Dec 18 Corn Futures – Support at $4.02, Resistance at $4.16, Place Targets at $4.10

Cash Beans – May 18 Bean Futures – Support at $10.44, Resistance at $10.78, Place Targets at $10.68

New Beans – Nov 18 Bean Futures – Support at $10.34, Resistance at $10.60, Place Targets at $10.50

New Wheat – July 18 Wheat Futures – Support at $4.79, Resistance at $5.10, Place Targets at $5.00

To see where grain futures are currently trading, please click here.

Have You Sold Enough New Beans Yet?  Make Values Even Better With Cash Plus Contracts

I can build a solid case why beans will move lower in the coming weeks as more acres get planted and less corn.  In addition, the bean planting window is not nearly as tight as the optimum corn planting window.  If you still have new beans to sell, please check out our Cash Plus Contracts.  We can add a premium to your new crop bean sales price in exchange for an offer to sell more new beans if November Bean futures close above a certain level on Oct 24th.  These contracts will allow you to sell new beans today with a 27 cent premium added to the new crop cash price in exchange for an offer to sell the same quantity of new crop bean futures around $10.90 if on Oct 24th, the November bean futures close at or above this level.  If futures close below this level, you get to keep this entire premium, and you don’t have any other obligation.  So it is a win-win for you.  You get to keep the 27 cent premium paid to you on top of the current new crop bean price, and if on Oct 24th, depending on what November bean futures trade at the close on this date, you might be able to keep this entire premium free and clear.  The worst case is that you would have the same bushel commitment in another new crop sale where November futures were locked in at the $10.90 level.  Taking off the basis of 69 cents under the November futures for delivery into Readfield, which is our current posted new crop bean basis, you would have a new crop bean contract at 10.90 – 69 = $10.21  The worst case is that you would have another set of new beans sold at $10.21 for Oct / Nov ’18 delivery into Readfield or Center Valley.  This is a great price considering our posted new crop price is at $9.78 or so today.  Please check this out.  We have been writing many of these contracts as of late, and they work really well.  Please click here to see our current cash grain bids.

Targets Produce Success and Protection For Your Farm

Before long, weather markets will push the market around like a yoyo and produce unprecedented volatility.  However, volatility can be your friend if you have a solid marketing plan and know how much and at what price you feel comfortable selling when the right opportunities present themselves.  If you are not working with one of our grain originators today, please give us a call.  We will gladly sit down with you to create a plan and help you protect your farm.  For a list of our grain originators and the one closest to you, please click here.  These types of volatile markets are a grain marketer’s dream.  The volatility present selling opportunities that are very short lived.  For the disciplined marketer, who knows exactly what commodity he needs to sell and at what level, this is a perfect scenario.  You simply place target orders in our system and at 3 am in the morning next Thursday while China makes an announcement when we are all sleeping, the markets ramps up, hits your target, locks in your contract price, all automatically while you are in bed.  How fantastic is that!  I encourage all of you to start using our online target system.  Its free, easy, and will protect your farm.  Please click here for more information.

LAST CALL For New Crop Average Price Contracts – Sign Up Today

We are now enrolling bushels into our new crop Average Price Contract which is for new crop grain that will be delivered during this fall.  This is a cash contract and will use a 10 week period to average the price.  The timing of the new crop contract will be May 2nd through July 5th.  We will simply average the closing prices each Wednesday during these periods, pricing 1/10 of your contracted bushels each week during the period.  At the end of the period, we will simply average the prices together.  There is no minimum quantity and the best part of these contracts are that they are FREE.  There are no fees associated with these averaging contracts.

The dates associated with the new crop pricing period of May 2nd to July 5th is normally a very good time to sell new crop grain because the market is dealing with planting problems and then dealing with dry weather problems somewhere in the Corn Belt.  When problems surface, the market puts more risk premium in the futures, and you will be participating in the market to capture these premiums.  If there are no problems, the market usually drifts lower after the July 4th holiday, making the timing an excellent part of this new crop average contract.    These contracts are simple, easy to understand, and they work.  Every farmer should put a decent amount of grain into these contracts to help protect your farm.  For more information on these exciting new contracts, please click here.

As always, if I can help you with anything, please call me at the grain office in Readfield at 920-667-4955, ext 2 or send me an email at marcus.cordonnier@chsinc.com.

Marcus Cordonnier

Weekly Grain Update – April 11, 2018

 

4/11/18

No Major Surprises In USDA’s April Crop Report

The USDA was out with its April crop report on Tuesday, and they did not make significant changes to the grain supply and demand tables.  Their slight adjustments were viewed as neutral for corn, slightly supportive to beans, and bearish for wheat.

In corn, they made no changes to the supply numbers.  On demand, they reduced feed usage by 50 M bu down to 5.5 B bu, and they reduced corn used in the food and seed industries by 5 M bu.  When the dust settled, carryout was raised by this 55 M bu up to 2.182 B bu.

In beans, the USDA also did not make any changes to supply and left production numbers the same from last month.  They did increase the crush number by 10 M bu to 1.97 B bu and they also reduced seed and residual by another 5 M bu.  In the end, bean carryout was lowered by 5 M bu down to 550 M bu which is still a large amount of beans, but the reduction was viewed as supportive.

In wheat, the only adjustment was a reduction in wheat used for feed.  The USDA reduced feed usage by 30 M bu.  This change went straight to the bottom line and increased carryout by 30 M bu up to 1.064 B bu, which was viewed as bearish to wheat.  During a time where we have seen our grain markets being significantly pushed around by potential trade wars, a lack of new crop bean acres, and significant corn exports, this report did not shake the market much at all.

Cold Weather, Slow Planting, and Trade Disruptions

There is more and more concern developing about the slow start to US corn and bean planting.  Much of the Midwest is still covered by snow, and no where near ready to even think about planting corn yet.  Forecasts are calling for continued cold temperatures for the balance of April.  Obviously, we need more heat, and dry weather in the coming days / weeks to get the majority of the Corn Belt in position to plant corn.  Yes, this is only April 11th.  However, many parts of southern IL are usually planting corn by April 20th, and this will not happen this year, at least it does not appear to be the case.  If the situation does not change, this will likely be supportive to corn and bearish to beans as more beans will likely be planted and less corn.  However, the US farmer has proven time and time again that he has much more planting capacity as compared to previous years to plant massive amounts of corn in short amounts of time, if forced to do so.  We are not in panic mode yet, but the trade is paying attention.

Last week, the market witnessed huge volatility from the potential trade disruptions between the US and China.  Each side threw grenades at each other, but at the end of the day, there was no date on the potential tariffs being enacted.  To me, this is negotiating 101.  Hit your opponent with a big thump, make him realize you are serious and won’t back off, call his bluff, and see how he reacts.  You don’t put any time limits on the deal, but it shows the opponent what we could do if forced into a corner, and it shows him that we are very serious about this matter.  It also shows that the US is operating with a strong hand and will not be bullied into something that is not good for us.  Well, we will see how this tactic eventually works out, but we saw early indications yesterday that the Chinese might be the first to make concessions.  Chinese President Xi is looking to open up some of his markets to the outside world, starting with cars.  We will see how the ags are implicated, but one thing is for sure, they still need to buy some beans from the US.  On top of this, their 25% tariff will likely crush their internal soy users.  These internal pressures in China are probably starting to mount, and this is likely why China threw out the first olive branch.  However, we have been here before.  Let’s see what actually gets accomplished before we make assumptions on what will happen.  Stay tuned.

The bean basis in Brazil jumped massively on Thursday last week when the rhetoric between the US and China was at the high point.  If China would not buy beans from the US, that means they would only buy them from Brazil, and the soy market in Brazil proceeded to ramp up by $1 – $2 per bushel in short order.  And since Brazilian beans now became the most expensive beans in the world, everyone was coming to the US to buy beans for later in the year.  As a result, the bean basis in the Gulf started to work higher, and we saw the Gulf bean basis improve 30 to 40 cents in very short order, as a result.  Since Friday, all of these bean markets have cooled down, but this gives you a sense of how our markets react to changing demand due to politics.  The nearby bean basis has firmed a bit.  My guess is that we will continue to see bean basis remain firm on the front end.  Time will tell whether this will continue, or not.  It will largely depend on whether the US and China can work out their differences without a full-fledged trade war.

Targets Produce Success and Protection For Your Farm

These types of scenarios push the market around like a yoyo and produce unprecedented volatility.  However, volatility can be your friend if you have a solid marketing plan and know how much and at what price you feel comfortable selling when the right opportunities present themselves.  If you are not working with one of our grain originators today, please give us a call.  We will gladly sit down with you to create a plan and help you protect your farm.  For a list of our grain originators and the one closest to you, please click here.  These types of volatile markets are a grain marketer’s dream.  The volatility present selling opportunities that are very short lived.  For the disciplined marketer, who knows exactly what commodity he needs to sell and at what level, this is a perfect scenario.  You simply place target orders in our system and at 3 am in the morning next Thursday while China makes an announcement when we are all sleeping, the markets ramps up, hits your target, locks in your contract price, all automatically while you are in bed.  How fantastic is that!  I encourage all of you to start using our online target system.  Its free, easy, and will protect your farm.  Please click here for more information.

New Arrive Delayed Price Rates have Been Reduced

Effective March 20th, we have reduced our Delayed Price rates for new arrive corn and beans into Readfield and Center Valley.  These rates are for new arrive bushels only, and the rate will be in effect until Oct 1st 2018 when new crop storage rates will go into effect.  The new Delayed Price rate is now 60 days FREE, and then 3 cents flat per month thereafter.

We have also updated our web site with the grain storage options that we offer at the Co-op.  Please click here to see what storage options exist for our patrons, and to see what option is the best fit for you.  Many of you have interest in using Delayed Price as an economical way to store your grain.  However, many of our patrons have had questions regarding Delayed Price and how it is different compared to Open Storage.  We have created an information sheet that compares Delayed Price to Open Storage, and lists every advantage and disadvantage of the program.  I encourage all patrons to read this and it is very informative and will help you to understand our program.  Please click here to see this comparison of Delayed Price to Open Storage.

5,000 bu Condo Space For Sale

We have a patron who wants to sell 5,000 bu of Condo Space.  This is also known as our Long Term Storage Agreement.  We have listed this on our web site.  If you are interested, please click here.  Please call the number listed and talk to Todd.  He will inform you of all the details.  In the future, this site on our web page will be updated with buyers and sellers of Condo space for our co-op.  If you own Condo space and would like to sell, or if you would like to buy Condo space, please let us know and we can post your information for you.  We want to make this a useful site to trade Condo Space.

Deadline Approaching For New Crop Average Price Contracts – Have You Enrolled Yet?

We are now enrolling bushels into our new crop Average Price Contract which is for new crop grain that will be delivered during this fall.  This is a cash contract and will use a 10 week period to average the price.  The timing of the new crop contract will be May 2nd through July 5th.  We will simply average the closing prices each Wednesday during these periods, pricing 1/10 of your contracted bushels each week during the period.  At the end of the period, we will simply average the prices together.  There is no minimum quantity and the best part of these contracts are that they are FREE.  There are no fees associated with these averaging contracts.

The dates associated with the new crop pricing period of May 2nd to July 5th is normally a very good time to sell new crop grain because the market is dealing with planting problems and then dealing with dry weather problems somewhere in the Corn Belt.  When problems surface, the market puts more risk premium in the futures, and you will be participating in the market to capture these premiums.  If there are no problems, the market usually drifts lower after the July 4th holiday, making the timing an excellent part of this new crop average contract.    These contracts are simple, easy to understand, and they work.  Every farmer should put a decent amount of grain into these contracts to help protect your farm.  For more information on these exciting new contracts, please click here.

What Are The Charts Telling Us?

Here are the support and resistance levels for cash and new crop grains.  These are all futures levels as traded at Chicago:

Cash Corn – May 18 Corn Futures – Support at $3.80, Resistance at $3.95, Place Targets at $3.90

New Corn – Dec 18 Corn Futures – Support at $4.05, Resistance at $4.16, Place Targets at $4.12

Cash Beans – May 18 Bean Futures – Support at $10.35, Resistance at $10.82, Place Targets at $10.72

New Beans – Nov 18 Bean Futures – Support at $10.35, Resistance at $10.60, Place Targets at $10.55

New Wheat – July 18 Wheat Futures – Support at $4.89, Resistance at $5.31, Place Targets at $5.23

To see where grain futures are currently trading, please click here.

As always, if I can help you with anything, please call me at the grain office in Readfield at 920-667-4955, ext 2 or send me an email at marcus.cordonnier@chsinc.com.

Marcus Cordonnier

CHS reports a net income of $346.7 million for the first half of fiscal 2018

CHS income fiscal 2018

 

CHS Inc., the nation’s leading farmer-owned cooperative and a global energy, grains and foods company, today reported net income of $346.7 million for the first half of its 2018 fiscal year (six-month period ended Feb. 28, 2018), compared to net income of $223.7 million for the same time period a year ago.

Consolidated revenues for the first half of fiscal 2018 were $14.9 billion, down from $15.4 billion for the first half of fiscal 2017. Pretax income was $185.0 million and $249.1 million for the first half of fiscal 2018 and 2017, respectively. (more…)

Weekly Grain Update – April 5, 2018

4/5/18

USDA Reports, Tariffs, and Volatility

There has been several items that have / will push our grain markets around as of late.  These have been:

  • The USDA Prospective Plantings Report and March 1st Grain Stocks released last Thursday
  • The Retaliatory Tariffs placed on US products by the Chinese
  • The April USDA monthly grain report to be released on Tuesday next week

 

Let’s take a minute and break these all down.

Last Thursday, the USDA gave us its prediction of how many acres of corn, beans, and wheat the US farmer will plant this spring.  Last year we planted just over 90 M acres each of corn and beans and just over 46 M acres of all wheat classes.  The total of these acres planted last year add up to 226.3 M acres.  Before the report, the market had expected that we would plant 88-89 M acres of corn and 91-92 M acres of beans.  This would be the first time that the bean acres in the US would naturally be bigger than corn acres.  Well, the government shocked the market with its acreage prediction on Thursday.  It pegged corn acres at just over 88 M, beans at just under 89 M, and all wheat acres at 47.3 M.  The total of all of these is 224.3 M acres of corn, beans, and wheat.  After these numbers were released, there was a lot of “head scratching” going on as the trade could not figure out where the additional 2 M acres went to.  The trade could accept the corn acreage prediction, but it was shocked at the bean acreage number at 89 M.  In fact, many still believe that the bean number is not right, and when the dust settles after planting this spring, the bean acres will be larger than this.  Also, when hard times fall on the ag community, the farmer tends to plant fence row to fence row to maximize revenue generation.  Why would he just let 2 M acres sit idle?  Something is not adding up.  However, these are the numbers the trade is forced to deal with, and we won’t know the final acreage numbers until the June 30th numbers are included in the July 12th monthly crop report.  Stay tuned.

The other piece of information from last Thursday’s report was the March 1st grain stocks.  These numbers gives the trade and indication of what was produced last fall and also how much has been used during the first ½ of the crop year.  Last year, the March 1st corn stocks were, combining both on farm and in commercial storage, were 8.622 B bu, beans were 1.739 B bu, and wheat stocks were 1.659 B bu.  The report on Thursday pegged March 1st 2018 corn stocks at 8.888 B bu, beans at 2.107 B bu, and wheat at 1.494 B bu.  The story that nobody is talking about, and under the radar due to the acreage surprise, is the massive amount of corn and beans in the country left over from this fall’s huge harvest.  Either the final corn and bean numbers were higher than they originally thought, or usage is less.  Both the corn and bean stock number this year are a record, and they have NEVER been this big before in history.  At some point, the market will be forced to deal with this, but it is not looking at it today.

In the mean time, the market’s reaction to the lack of new crop bean and corn acres was extremely positive to grain futures at 11 am last Thursday.  As soon as the numbers were released, beans shot up 25 cents, corn traded 11 cents higher, and wheat moved 15 cents higher.  The market just could not believe the lack of bean acres and as a result, it needed to “buy” more new bean acres.  But as beans rallied, corn and wheat followed suit.  At the end of the day, beans closed 33 cents higher, corn closed 14 higher, and wheat closed 16 higher.  A tremendous amount of new crop grain was purchased on Thursday by the grain trade as targets were being fill continuously all day.  The market closed on a very firm note, and this strength carried over into Sunday night’s opening, where more and more selling occurred as the market made new highs around midnight.  December corn futures made a new high at $4.16 and November bean futures made a new high at $10.60.  Targets were being filled left and right, and the farmer was protecting his farm revenue.  We had a nice pop in futures and many were taking advantage of this opportunity like they should have.

We have been saying for weeks that trade relations with the Chinese have not been on the kindest of terms as of late.  It started with the Trump Administration’s tariffs on steel and aluminum coming from China.  All total, there was over 100 items on our list worth about $50 B in market value.  This is all due to the huge trade deficit that we have, and the administration is trying to level the playing field.  As you could have guessed, the Chinese did not like this, and the equity and grain markets have been on edge lately because we know the Chinese would fire back with some sort of retaliation.  We knew it would happen, but just not sure what and when.  Well, we got our answer at 4 am Wednesday morning.  The Chinese came out with their own list of items that would be taxed.  Included was soybeans, corn, milo, beef, pork, automobiles, planes, and many more items.  The Chinese would include a 25% tariff on these items coming from the US.  We all know how the Chinese buy our beans.  They have a huge appetite for beans and even though they have been buying the great majority of them from Brazil, they still must come to the US for 30% of their soybean needs because Brazil cannot totally satisfy their needs.  Thus, the bean basis in Brazil has skyrocketed higher, and this strength in bean basis there is starting to cause the basis at the Gulf to firm as well.  At the end of the day, if the Chinese completely take every excess bean out of Brazil, the normal customer that usually bought beans from Brazil will likely need to come to the US to get his beans now.

So, instead of selling our beans to China, we will be selling our beans to many different countries that used to buy them from Brazil.  This is an interesting development, and no one is sure what the exact end result will be.  However, once this news broke during the early morning hours Wednesday morning, as you could have guessed, our grain markets were just pounded lower.  Beans crashed 55 cents lower and corn was down 20 cents.  All of a sudden, the market is wondering if we will have a solid demand for US beans if the Chinese don’t buy them.  The first reaction was the worst, as the markets closed Wednesday much off of their lows, but there is still a huge amount of uncertainty in the market.  Stay tuned.  Once this news broke, December corn traded down to $3.96 and November beans traded down to $9.97 after making a new high at $10.60 just 2 days earlier.  This is the definition of volatility, and why we encourage all of you to use targets to take advantage of these pops in the market.  For more information on how to use our online target system, please click here.

The USDA will release its April crop report at 11 am on Tuesday next week.  In light of the recent developments, these numbers might not have a huge impact on grain futures, but it is another report that can push the markets around.  The USDA will give us an updated supply and demand table for the grains and we will get updated carryout numbers for each.  In light of the huge March 1st stocks numbers listed above, it will be interesting to see if corn or bean carryout grows from last month.

What Are The Charts Telling Us?

Looking at the charts today, all grains made a fresh high on Sunday night, and then made fresh lows on Wednesday after the Chinese tariff news broke.  We now have very wide support and resistance levels to work with.  Here are the support and resistance levels for cash and new crop grains.  These are all futures levels as traded at Chicago:

Cash Corn – May 18 Corn Futures – Support at $3.72, Resistance at $3.92, Place Targets at $3.88

New Corn – Dec 18 Corn Futures – Support at $3.96, Resistance at $4.16, Place Targets at $4.10

Cash Beans – May 18 Bean Futures – Support at $9.83, Resistance at $10.60, Place Targets at $10.40

New Beans – Nov 18 Bean Futures – Support at $9.97, Resistance at $10.60, Place Targets at $10.35

New Wheat – July 18 Wheat Futures – Support at $4.59, Resistance at $5.09, Place Targets at $4.95

To see where grain futures are currently trading, please click here.

Still Own Old CORN?  Tired Of Paying Storage?  Check Out Our Cash Plus Contracts

Do you still own old corn in the bin or on Delayed Price at the elevator?  Do you need the money now and tired of paying storage?  Please consider our Cash Plus contracts.  These contracts will allow you to sell corn today with a 13 cent premium added to the cash price in exchange for an offer to sell new crop corn futures around $4.25 if on Nov 14th, the December ’18 corn futures close at or above this level.  If futures close below this level, you get to keep this entire premium, and you don’t have any other obligation.  So it is a win-win for you.  You get to keep the 13 cent premium paid to you NOW on top of the cash price, you stop the storage charges, if hauling from the bin you get to haul them now, you create cash flow now, and if on Nov 14th, depending on what December corn futures trade, you might be able to keep this entire premium free and clear.  The worst case is that you would have the same bushel commitment in a new crop offer where December corn futures were locked in at the $4.25 level.  Taking off the basis of 40 cents under the December futures for delivery into Readfield, you would have a new crop corn contract at 4.25 – 40 = $3.85  The worst case is that you would have new corn sold at $3.85 for Oct / Nov ’18 delivery into Readfield or Center Valley.  This is a great price considering our posted new crop price is at $3.71 today.  Please check this out.  We have been writing many of these contracts as of late, and they work really well.

Have You Sold New Beans Yet?  Make Values Even Better With Cash Plus Contracts

If you still have new beans to sell, please check out our Cash Plus Contracts.  We can add a premium to your new crop bean sales price in exchange for an offer to sell more new beans if November Bean futures close above a certain level on Oct 24th.  These contracts will allow you to sell new beans today with a 29 cent premium added to the new crop cash price in exchange for an offer to sell the same quantity of new crop bean futures around $10.65 if on Oct 24th, the November bean futures close at or above this level.  If futures close below this level, you get to keep this entire premium, and you don’t have any other obligation.  So it is a win-win for you.  You get to keep the 29 cent premium paid to you on top of the current new crop bean price, and if on Oct 24th, depending on what November bean futures trade at the close on this date, you might be able to keep this entire premium free and clear.  The worst case is that you would have the same bushel commitment in another new crop sale where November futures were locked in at the $10.65 level.  Taking off the basis of 69 cents under the November futures for delivery into Readfield, which is our current posted new crop bean basis, you would have a new crop bean contract at 10.65 – 69 = $9.96  The worst case is that you would have another set of new beans sold at $9.96 for Oct / Nov ’18 delivery into Readfield or Center Valley.  This is a great price considering our posted new crop price is at $9.60 today.  Please check this out.  We have been writing many of these contracts as of late, and they work really well.  Please click here to see our current cash grain bids.

As always, if I can help you with anything, please call me at the grain office in Readfield at 920-667-4955, ext 2 or send me an email at marcus.cordonnier@chsinc.com.

 

Marcus Cordonnier

Weekly Grain Update – March 27, 2018

3/27/18

The USDA Will Release Its Prospective Plantings Report Thursday At 11 AM

The USDA will release its annual Prospective Plantings report and March 1st Grain Stocks at 11 AM on Thursday morning.  There is no other report during the year that is quite like this one.  This is a big report, with a lot of information, and it usually causes the market to move in large volumes, either higher or lower, depending on what the government puts out.  This is the first time during the crop year that the USDA gives us their prediction on new crop acres of corn and beans and it sets the starting point for the ‘18/19 supply and demand tables.  The focus now shifts from the ‘17/18 supply and demand tables to ‘18/19.  Thus, this report is a big deal, and it usually creates market gyrations that affect the trade for several days after its initial release.  Today, the market is expecting the ‘18/19 corn acres to be in the range of 89 to 90 M acres, and the bean acres to be in the range of 91 to 92 M acres.  Last year, both corn and beans were right at 90 M each.  So this is a shift away from corn to more beans.

There are several reasons for this.  First, the bean market has give all of you a great opportunity to sell new crop beans for this fall at profitable levels.  Thus, more new crop beans will be grown.  Secondly, the farming economy is struggling on many fronts.  The banker is ramping up his criteria for farm loans, and raising corn takes much more dollars per acre than beans.  The path of least resistance is more beans and less corn, especially since we had the opportunity to lock in nice profits with new crop beans already this year.  However, the American farmer loves to plant corn if he can get his crop planted on time and has a big enough window to get this done.  I have said many times that the weather during corn planting determines final corn acres.  If he gets his original allocation planted and it is still dry enough to plant corn, and we are still before May 10th, he will pound more corn in the ground and less beans.

This report has a long history of significantly moving the market once the numbers are released.  Volatility will again be the word of the day.  Due to this, this is an excellent opportunity to get target orders placed for any remaining old crop bushels that remain unpriced in the bin or in elevator storage, and get orders to sell new crop bushels.  It is simply amazing how the markets will move in fractions of seconds once the numbers are released.  I encourage all of you to put a plan together, if not already done so, and put solid target orders to sell remaining old crop bushels and try to get at least 50% of your new crop bushels locked in before the planters roll.  I like July delivery corn at $3.50 or above, new corn at $3.60, July delivery beans at $9.75, new beans at $9.60, and new wheat at $4.10 and above.  These levels are all within 15 cents from hitting, and I would have no problem putting orders out there during the report to see if they could be picked off, and take advantage of the volatility of the report.  To see where cash grain prices are today, please click here.

I encourage all of you to be much more aggressive in forward contracting your grain ahead of planting and take advantages of opportunities while they last.  This is not the time to become bullish, but the time to pounce on opportunities to protect your farm.  The farmer can and will pound a massive amount of corn and beans into the ground at ever increasing speeds, so our planting risks continue to be reduced each year.  The earlier we plant, the less likelihood of having drought problems later in the year.  New seed varieties can produce even during the driest of the years.  We still have planting and weather scares during the year, but the industry is reducing these risks continually.  We also have massive amounts of grain around the globe.  The point is that the market will give you opportunities to lock in profits ahead of the planting season.  However, time is starting to run out.  Once the planters roll, and the corn gets planted, the market will give you less and less opportunities to forward contract bushels for this summer or this fall as it will get more and more comfortable with the crops growing in the field.  Your advantage is to lock in these premiums BEFORE the crop gets planted, not after.  There is no incentive for the market to rally after the crop is planted, unless we have a weather problem, as the crop is already planted.  If a premium is given, the market will try and encourage you to plant a certain crop before the crop is actually planted, by dangling a big carrot in front of you.  The carrot vanishes once the crop is planted.  The proactive grain marketer will be the successful operation moving forward.

Last week did a huge amount of damage to our grain markets.  Many times, after a significant pullback, the market will go back and “kiss” the previous low level goodbye, before the weaker trend prevails and the markets move lower and lower.  You can call us and we can enter these targets for you, or you can do it all by yourself through our Online Target Center by clicking here.

LAST CALL To Reserve Your Seat For Next Week’s Grain Meetings

On April 2nd and 3rd, we will be hosting 3 Grain Marketing Meetings throughout our draw area.  Here is the schedule:

  • Monday April 2nd at 5:30 at the Larsen Precision Ag Building. Dinner then meeting.
  • Tuesday April 3rd at 9:30 at the Waupaca Ale House. Meeting with lunch to follow.
  • Tuesday April 3rd at 5:30 at New London Crystal Falls Banquet Hall. Dinner then meeting.

Brian Rydlund from CHS Hedging will be joining us to go over the current S&D’s and also offer his recommendations for contracting and marketing.  It will be a lively discussion on current grain topics.  You are welcome to attend.  For more information on the location, times, and how to RSVP, please click here.

What Are The Charts Telling Us?

Looking at the charts today, all grains made a fresh low on Friday, and then worked higher into the close.  Since then, the market has not done much.  Here are the support and resistance levels for cash and new crop grains.  These are all futures levels as traded at Chicago:

Cash Corn – May 18 Corn Futures – Support at $3.69, Resistance at $3.80, Place Targets at $3.77

New Corn – Dec 18 Corn Futures – Support at $3.91, Resistance at $4.02, Place Targets at $3.98

Cash Beans – May 18 Bean Futures – Support at $10.09, Resistance at $10.40, Place Targets at $10.30

New Beans – Nov 18 Bean Futures – Support at $10.12, Resistance at $10.36, Place Targets at $10.26

New Wheat – July 18 Wheat Futures – Support at $4.62, Resistance at $4.79, Place Targets at $4.74

To see where grain futures are currently trading, please click here.

New Arrive Delayed Price Rates have Been Reduced

Effective March 20th, we have reduced our Delayed Price rates again for new arrive corn and beans into Readfield and Center Valley.  These rates are for new arrive bushels only, and the rate will be in effect until Oct 1st 2018 when new crop storage rates will go into effect.  The new Delayed Price rate is now 60 days FREE, and then 3 cents flat per month thereafter.

New Crop Average Price Contracts – Have You Enrolled Yet?

We are now enrolling bushels into our new crop Average Price Contract which is for new crop grain that will be delivered during this fall.  This is a cash contract and will use a 10 week period to average the price.  The timing of the new crop contract will be May 2nd through July 5th.  We will simply average the closing prices each Wednesday during these periods, pricing 1/10 of your contracted bushels each week during the period.  At the end of the period, we will simply average the prices together.  There is no minimum quantity and the best part of these contracts are that they are FREE.  There are no fees associated with these averaging contracts.

The dates associated with the new crop pricing period of May 2nd to July 5th is normally a very good time to sell new crop grain because the market is dealing with planting problems and then dealing with dry weather problems somewhere in the Corn Belt.  When problems surface, the market puts more risk premium in the futures, and you will be participating in the market to capture these premiums.  If there are no problems, the market usually drifts lower after the July 4th holiday, making the timing an excellent part of this new crop average contract.    These contracts are simple, easy to understand, and they work.  Every farmer should put a decent amount of grain into these contracts to help protect your farm.  For more information on these exciting new contracts, please click here.

As always, if I can help you with anything, please call me at the grain office in Readfield at 920-667-4955, ext 2 or send me an email at marcus.cordonnier@chsinc.com.

Marcus Cordonnier

Demonstrating safety in the communities where we work

ResponsibleAg

CHS now has more than 100 ResponsibleAg certified facilities from its CHS Country Operations and CHS Agronomy divisions. Out of all U.S. fertilizer facilities receiving this certification, CHS represents 12 percent of the total.

ResponsibleAg was started in 2014 to assist agribusinesses as they sought to comply with federal environmental, health, safety and security rules regarding the safe handling and storage of fertilizer products. The rigorous application process includes a checklist of more than 320 questions about federal regulatory requirements. To be certified as a ResponsibleAg facility, locations must be 100 percent compliant with the entire checklist. (more…)

Weekly Grain Update – March 22, 2018

 

3/22/18

Rain Finally Breaks the Grain Markets

After eight weeks of higher grain markets, the tide has quickly turned.  And like many times, we went higher than we should have, and now unfortunately, we may go lower than we need to.  This is the definition of volatility, and many times this correlates with fund activity in our grain markets.  We have been saying for weeks that Argentina is dry and the US plains are dry.  These facts caused the funds to cover their huge short positions that they have carried since fall harvest.  The news of dryness in Argentina and in the HRW areas of Kansas and Oklahoma causes them to get spooked and they covered (bought back) their short positions.  But they not only got back to an even position, they kept buying until they had a very sizable long position in beans and corn.  In fact, if you go back to mid-January, the funds held a short corn position of 227,000 contracts and a short bean position of 104,000 contracts.  Now, as of Tuesday of last week, they had accumulated a long position of 233,000 contracts long of corn, and 208,000 contracts long of beans.  What does this mean?  This means that in the 8 week period from mid Jan to mid-March, the funds bought a total of 460,000 contracts of corn, or 2.3 B bu of corn, and 312,000 contracts of beans, or 1.56 B bu of beans, all on paper.  Now, let’s compare this to the size of our entire corn and bean crop the US raised last year.  We produced a total of 14.604 B bu of corn and 4.392 B bu of beans.  This means that in the last 8 weeks, the funds have purchased 15.7% of the entire corn crop on paper and purchased 35.5% of the entire bean crop on paper.  This shows you the magnitude of their operations and why grain futures rallied and were supported like they have been.  We hear so much about the short covering rally.  What we witnessed this week was just the opposite:  the long liquidation sell-off.

In life, good things rarely last forever, and the grain markets are no exception.  We were getting clues last week that this market was way overbought and due for a correction.  When a market is given very bullish news and does not react bullishly, then the top is in, at least for now.  Last week on Thursday, we had a corn export number that was just huge.  It was the single largest corn export number that we have seen in 23 years!  Any yet, the market did nothing.  Secondly, NOPA bean crush came out with a huge monthly bean crush number, and the market did nothing but go lower.  These were clear signals that the tide was changing.  It was time for a correction lower.

The final straw that broke the back of the camel was rain over the weekend in Argentina and in the US plains.  Both areas receive more rain than predicted and that did it.  When the grain markets opened at 7 PM Sunday night, all grains gapped lower on the open and never looked back.  When the dust settled at the close, corn was 11 cents lower, beans were 25 cents lower, and wheat was 16 cents lower.  The market was easier on Tuesday as well.  What had taken weeks to establish was gone in 2 trading sessions.  Here is a summary of why the market sold off:

  • Fund position liquidation
  • Trade war fears
  • The funds held a longer position than thought
  • 1-2” rains in Argentina and US plains
  • Much easier bean meal markets
  • Argentina’s bean crop losses now capped. Bean crop should be larger than 40 MMT.
  • Weaker markets leading up to the huge sell-off on Monday
  • Much weaker technical readings from the charts
  • Big drop in the stock market on Friday

 

The recent sell-off in the grain markets has caused the producer to become very disengaged from marketing his grain and instead, is focused on preparing to plant his corn crop.  In the coming days, this lack of participation by the farmer due to lower grain prices should help the basis to improve.  We are already starting to see this happen in the southern areas where the basis and spreads are now going to be forced to do more of the market lifting since futures have backed off.  I suspect the local basis will firm as well, but it will likely take a bit more time for the strength to reach our area.

If you have not prepared a marketing plan for any remaining unsold grain in storage or in your bin, I strongly suggest you do so now before you plant your corn crop.  Yes, the market has pulled back, but now is the time to figure out where you want to sell your old crop, and at what level you want to sell your new crop production at.  New corn is at $3.57, new beans at $9.55, and new wheat is at $4.01.  We could see another rally during May and June if we have a planting problem, and the weather will likely not be perfect everywhere.  I strongly suggest that you talk to our grain originator and get a grain marketing plan in place so when the market gives us an opportunity to forward sell new crop or cash bushels, you don’t have to think about it, but only pull the trigger.  If you have not sold any new crop bushels yet, I strongly encourage you to start here and then place targets to sell each 5 cents higher on corn and wheat, and each dime higher on beans.  You can make money at these levels, it is prudent marketing to get these levels locked in, and this will give you risk protection for your farm.  You can call us to enter a selling target and we can enter them for you, or you can do it all by yourself by entering them online through our Online Bid Center by clicking here.

New Arrive Delayed Price Rates have Been Reduced

Effective March 20th, we have reduced our Delayed Price rates again for new arrive corn and beans into Readfield and Center Valley.  These rates are for new arrive bushels only, and the rate will be in effect until Oct 1st 2018 when new crop storage rates go into effect.  The new Delayed Price rate is now 60 days FREE, and then 3 cents flat per month thereafter.

Have You Sold New Beans Yet?  Make Values Even Better With Cash Plus Contracts

If you still have new beans to sell, please check out our Cash Plus Contracts.  We can add a premium to your new crop bean sales price in exchange for an offer to sell more new beans if November Bean futures close above a certain level on Oct 24th.  These contracts will allow you to sell new beans today with a 28 cent premium added to the new crop cash price in exchange for an offer to sell the same quantity of new crop bean futures at $10.65 if on Oct 24th, the November bean futures close at or above this level.  If futures close below this level, you get to keep this entire premium, and you don’t have any other obligation.  So it is a win-win for you.  You get to keep the 28 cent premium paid to you on top of the current new crop bean price, and if on Oct 24th, depending on what November bean futures trade at the close on this date, you might be able to keep this entire premium free and clear.  The worst case is that you would have the same bushel commitment in another new crop sale where November futures were locked in at the $10.65 level.  Taking off the basis of 69 cents under the November futures for delivery into Readfield, which is our current posted new crop bean basis, you would have a new crop bean contract at 10.65 – 69 = $9.96  The worst case is that you would have another set of new beans sold at $9.96 for Oct / Nov ’18 delivery into Readfield or Center Valley.  This is a great price considering our posted new crop price is at $9.55 or so today.  Please check this out.  We have been writing many of these contracts as of late, and they work really well.  Please click here to see our current cash grain bids.

Corn Basis Contracts Create Cash Flow NOW and Stop Storage Charges

Do you still own old corn in the bin at home or on Delayed Price at the elevator?  Do you need cash flow now and want to stop the storage charges?  Please consider a corn Basis Contract.  A basis contract is where you simply lock in the basis (the difference between the cash price at our elevators and level where corn is trading on futures at Chicago.)  Today, cash corn at Readfield is trading at 37 cents under the May ’18 corn futures level.  In a basis contract, we would lock in this 37 cent basis level under the May futures, but leaving the futures portion unpriced.  You will then have a contract that will trail the May corn futures by 37 cents.  Most people will then give us a target to price the futures level to price the contract when corn futures rally 5 or 10 cents higher.  In the mean time, you can start to deliver against this contract if coming from the bin, or we will allow bushels on Delayed Price or Open Storage to be applied onto this contract with no charge.  Once the contract is filled, if you are paying storage, the storage stops immediately, and we can then advance you 70% of the contract value based on the current market.  The balance of the contract value will be paid to you once you set the final price on the contract.  This is a win-win for all parties.  You get cash flow now to pay bills, you stop the storage from accumulating, and you get to haul the bushels now when you have time.  This is a great alternative vs doing nothing.  On top of all of this, corn basis levels are stout right now.  The basis level you will be locking in is a great level compared to basis levels in the past.  It deserves your serious consideration.  Please give us a call, and we can explain to you all of the details if you have any questions.

Still Own Old CORN?  Tired Of Paying Storage?  Check Out Our Cash Plus Contracts

Do you still own old corn in the bin or on Delayed Price at the elevator?  Do you need the money now and tired of paying storage?  Please consider our Cash Plus contracts.  These contracts will allow you to sell corn today with a 10 cent premium added to the cash price in exchange for an offer to sell new crop corn futures at $4.20 if on Nov 14th, the December ’18 corn futures close at or above this level.  If futures close below this level, you get to keep this entire premium, and you don’t have any other obligation.  So it is a win-win for you.  You get to keep the 10 cent premium paid to you NOW on top of the cash price, you stop the storage charges, if hauling from the bin you get to haul them now, you create cash flow now, and if on Nov 14th, depending on what December corn futures close, you might be able to keep this entire premium free and clear.  The worst case is that you would have the same bushel commitment in a new crop offer where December corn futures were locked in at the $4.20 level.  Taking off the basis of 40 cents under the December futures for delivery into Readfield, you would have a new crop corn contract at 4.20 – 40 = $3.80  The worst case is that you would have new corn sold at $3.80 for Oct / Nov ’18 delivery into Readfield or Center Valley.  This is a great price considering our posted new crop price is at $3.57 or so today.  Please check this out.

What Are The Charts Telling Us?

Looking at the charts today, all grains made a fresh low on Monday.  Since then, the market has not done much.  Here are the support and resistance levels for cash and new crop grains.  These are all futures levels as traded at Chicago:

Cash Corn – May 18 Corn Futures – Support at $3.73, Resistance at $3.85, Place Targets at $3.80

New Corn – Dec 18 Corn Futures – Support at $3.95, Resistance at $4.03, Place Targets at $3.98

Cash Beans – May 18 Bean Futures – Support at $10.21, Resistance at $10.50, Place Targets at $10.40

New Beans – Nov 18 Bean Futures – Support at $10.21, Resistance at $10.48, Place Targets at $10.38

New Wheat – July 18 Wheat Futures – Support at $4.62, Resistance at $4.92, Place Targets at $4.82

To see where grain futures are currently trading, please click here.

CHS Larsen Co-op To Host Grain Marketing Meetings

On April 2nd and 3rd, we will be hosting 3 Grain Marketing Meetings throughout our draw area.  Meetings will be held in Larsen, Waupaca, and New London.  Brian Rydlund from CHS Hedging will be joining us to go over the current S&D’s and also offer his recommendations for contracting and marketing.  It will be a lively discussion on current grain topics.  You are welcome to attend.  For more information on the location, times, and how to RSVP, please click here.

As always, if I can help you with anything, please call me at the grain office in Readfield at 920-667-4955, ext 2 or send me an email at marcus.cordonnier@chsinc.com.

Marcus Cordonnier

Students storm the Hill with fresh perspectives and CHS support

When people ask CHS Government Affairs staff what it’s like to work as a lobbyist in Washington, D.C., they’re always curious about how the political landscape has changed in recent years. Sarah Gallo, director, CHS Government Affairs, is happy to share anecdotes, but she’d rather discuss how the conversation about agriculture has evolved. Students, farmers and the ag industry will carry that message to Capitol Hill on National Ag Day, to be celebrated March 20 in Washington, D.C., and across the country. (more…)

Weekly Grain Update – March 13, 2018

 

3/13/18

USDA Report Bullish Corn, Bearish Beans

The USDA released its March crop report last Thursday and gave some interesting numbers to the grain trade.  Changes were made to both corn and bean export numbers which took the market by surprise and made this report a game changer.  The corn numbers were rather bullish.  However, the changes made to the bean supply and demand tables were rather bearish.  Let go through the details.

The USDA made two changes to the corn supply and demand table.  First, they increased corn used in ethanol by 50 M bu to 5.575 B bu and secondly, they increased corn exports by 175 M bu to 2.225 B bu.  The net result of these changes was a reduction in corn carryout for this year of 225 M bu down to 2.127 B bu.  Usually, the USDA does not make much of a change on its March crop report.  This was not the case this month.  The above changes really surprised the market, and as expected corn closed 6 cents higher on the news on Thursday.  We have been saying for weeks that the corn demand structure is stout, and these numbers are just confirming this strength.  We have a corn market that is now the cheapest source of corn in the world, and this is expected to be the case until early summer.  We also have solid ethanol demand as $60 crude oil is allowing plants to run at full capacity.  We have excellent feed demand as the price of cattle now trade at $125.  On top of all of this, you have a corn production problem in Argentina, where their crop is expected to fall to 35 MMT or so.  We now have a world corn carryout that is now below 200 MMT for the first time since the ‘13/14 marketing year.

This strength has been shown through the basis at the Gulf, and it has been on fire as of late.  As the bean market crashed on Friday, the corn market remained calm and did not sell off like beans did.  The previous bean rally has allowed the farmer to sell new crop beans in a massive way over the last 2 months.  However, the market has not bought nearly as much new crop corn as beans.  The market needs the American farmer to plant at least 90 M acres of corn this year to keep the corn market well supplied.  Even with 90 M corn acres planted this summer in the US, the ‘18/19 corn carryout is expected to drop to 1.775 B bu or so.  Thus, the market this summer will be very sensitive to any weather or planting problem affecting the corn market.  If a problem develops, the corn market could turn bullish in a heartbeat.

The bean market could not be more opposite than corn.  Even with the problems in Argentina, beans are starting to stack up worldwide, and it will start to weigh on prices.  The USDA cut bean exports by 35 M bu down to 2.065 B bu.  They also increased crush by 10 M bu to 1.96 B bu.  The result of these two changes is an increase in bean carryout by 25 M bu to 555 M bu.  The market did not expect the reduction in exports which pushed bean carryout higher.  This change seemed to take the wind out of the sails of the bulls, and led to the steep sell off in the futures on Friday closing over 25 cents lower.  The real uncertainty now is how much more exports will be lost during this marketing year.  The administration is at odds with Canada and Mexico over NAFTA, and we could be at tremendous odds with China over the steel and aluminum tariffs put into place on Friday.  China is the largest buyer of beans in the world, and Brazil currently has the cheapest beans in the world as they begin their bean harvest.  If the Chinese decide to not buy our beans due to the steel tariffs, our beans will stack up in a huge way.  If this happens, we could have bean ending stocks next year that start with a 7 and not a 5.

Fortunately, crush margins have been just huge over the last 4 weeks as the price of bean meal ramped higher.  Stronger crush margins means more crush demand which will support the cash bean basis.  It is hard to know what the final yields will be in South America, but Brazil will likely have a bean crop close to 117 MMT once the dust settles, and Argentina will fall to 40 MMT or so.  These changes are already factored into the current bean futures prices.  The world bean carryout is still pegged at just under 95 MMT which represents a stocks to use ratio of 27.5%.  On top of all of this, the US farmer has been selling new crop beans, and looks to plant up 92 M acres this spring.  One thing is for sure, the world will not run out of beans anytime soon.  In fact, if Argentina did not have its drought this year, the price of beans could have easily been $1.50 to $2.00 lower than where we are today.

I can’t stress enough how over priced beans are today.  Any sort of problem with China, where they reduce their buying of US beans, and the beans will start stacking up in the US in a huge way.  Our carryout is already at 555 M bu.  If China stops buying our beans, we will be over 700 M bu in a heartbeat.  The banker is also putting pressure on the American farmer to plant more beans because the inputs are cheaper.  If we plant 92 M acres of beans this year, bean ending stocks will grow to levels we have not seen in decades.  November bean futures are currently trading at $10.38  At this level, I recommend that you have at least 50% of your new crop APH forward contracted for this fall.  There is significant risk of lower prices.  Let’s add a layer of protection to your farm.  Please click here to see which grain originator on our staff can help you create a unique marketing plan for your farm.

Have You Sold New Beans Yet?  Make Values Even Better With Cash Plus Contracts

If you still have new beans to sell, please check out our Cash Plus Contracts.  We can add a premium to your new crop bean sales price in exchange for an offer to sell more new beans if November Bean futures close above a certain level on Oct 24th.  These contracts will allow you to sell new beans today with a 25 cent premium added to the new crop cash price in exchange for an offer to sell the same quantity of new crop bean futures around $10.80 if on Oct 24th, the November bean futures close at or above this level.  If futures close below this level, you get to keep this entire premium, and you don’t have any other obligation.  So it is a win-win for you.  You get to keep the 25 cent premium paid to you on top of the current new crop bean price, and if on Oct 24th, depending on what November bean futures trade at the close on this date, you might be able to keep this entire premium free and clear.  The worst case is that you would have the same bushel commitment in another new crop sale where November futures were locked in at the $10.80 level.  Taking off the basis of 69 cents under the November futures for delivery into Readfield, which is our current posted new crop bean basis, you would have a new crop bean contract at 10.80 – 69 = $10.11  The worst case is that you would have another set of new beans sold at $10.11 for Oct / Nov ’18 delivery into Readfield or Center Valley.  This is a great price considering our posted new crop price is at $9.70 or so today.  Please check this out.  We have been writing many of these contracts as of late, and they work really well.  Please click here to see our current cash grain bids.

What Are The Charts Telling Us?

Looking at the charts today, all grains made a fresh high on Thursday last week.  Since then, we have been pulling back.  Here are the support and resistance levels for cash and new crop grains.  These are all futures levels as traded at Chicago:

Cash Corn – May 18 Corn Futures – Support at $3.87, Resistance at $3.94, Place Targets at $3.92

New Corn – Dec 18 Corn Futures – Support at $4.03, Resistance at $4.10, Place Targets at $4.08

Cash Beans – May 18 Bean Futures – Support at $10.32, Resistance at $10.60, Place Targets at $10.55

New Beans – Nov 18 Bean Futures – Support at $10.24, Resistance at $10.48, Place Targets at $10.43

New Wheat – July 18 Wheat Futures – Support at $5.00, Resistance at $5.32, Place Targets at $5.22

To see where grain futures are currently trading, please click here.

Take Advantage Of Short Selling Opportunities With Online Targets

Just prior or after the monthly USDA grain reports, volatility really ramps up in the grain markets.  This causes the futures levels to move around much more than during the rest of the month.  I encourage all of you who need to sell grain to use targets to take advantage of a pop in the market.  It is simply amazing what these markets can do in a very short amount of time.  There is simply no way we can communicate to all of you during a 15 minute rally that happens right during a crop report.  That is why targets work so well.  It allows you to have resting orders already in position at Chicago so when the market starts to gyrate, your orders get picked off and you can take advantage of a very nice pop in the market. Targets are a great tool to help you lock in better returns for your farming operation.  You can call us and we can enter them for you, or you can do it all by yourself by entering them online through our Online Bid Center by clicking here.

CHS Larsen Co-op To Host Grain Marketing Meetings

On April 2nd and 3rd, we will be hosting 3 Grain Marketing Meetings throughout our draw area.  Meetings will be held in Larsen, Waupaca, and New London.  Brian Rydlund from CHS Hedging will be joining us to go over the current S&D’s and also offer his recommendations for contracting and marketing.  It will be a lively discussion on current grain topics.  You are welcome to attend.  For more information on the location, times, and how to RSVP, please click here.

As always, if I can help you with anything, please call me at the grain office in Readfield at 920-667-4955, ext 2 or send me an email at marcus.cordonnier@chsinc.com.

Marcus Cordonnier

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