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BRIAN HOOPS

By Staff | Sep 25, 2015

Grain marketing

With wheat harvest complete and soybean harvest around the corner, farmers need to establish a crop marketing plan.

University of Minnesota grain marketing specialist Ed Usset said he has no rabbits to pull out of his hat when it comes to marketing grain.

He said it’s going to be a tough time for marketing grain coming out of pre-harvest pricing mode.

I’m going to put $3 corn in the bin this fall. I’m going to put $8 soybeans in the bin and I’m going to wait for a rally, Usset said. I’d be thrilled to get $.50 more out of the corn and $.50 to $1 more out of the soybeans.

Be ready to take action if and when that occurs. Usset is concerned there will be a repeat of last year.

There are some people that still have grain in their bins.

He urges farmers to be proactive and decisive on rallies.

However, farmers need to have a realistic number in mind when it comes to marketing their crop.

Titan financials

Titan Machinery reports a gross profit of $62 million in the second quarter, down 22 percent from the same period last year.

Net income was $6,000, compared to a loss of $614,000 one year ago. Farm equipment sales were down 31 percent from the second quarter last year.

Operating expenses decreased 18 percent in the second quarter.

For the first half, Titan had a net loss of $6.2 million, a slight improvement from last year.

Titan chairman and chief executive officer David Meyer said the agriculture segment continues to be impacted by ongoing industry headwinds.

Bitcoin suit

U.S. derivatives regulators brought their first case against a Bitcoin trading platform on Thursday, declaring that virtual currencies are deemed “commodities” covered under existing law.

The Commodity Futures Trading Commission said it had reached a settlement with San Francisco-based Coinflip Inc and its chief executive Francisco Riordan.

Bitcoin, a Web-based “cryptocurrency” sold through exchanges, provides a vehicle for moving money across the world quickly and anonymously without the need for third-party verifications.

The agency said Coinflip was operating an online platform known as Derivabit, which helped match up buyers and sellers with Bitcoin options. Because these Bitcoin options are deemed “commodities,” the CFTC said the business should have been properly registered and subject to the laws governing swaps.

“While there is a lot of excitement surrounding Bitcoin and other virtual currencies, innovation does not excuse those acting in this space from following the same rules applicable to all participants in the commodity derivatives markets,” said Aitan Goelman, the head of the CFTC’s Enforcement Division.

CORN ANALYSIS

Corn closed the week 9.5 cents lower.

Last week, private exporters did not report any sales.

Weekly export sales showed corn sales were 21 million bushels for new crop corn.

New crop sales are 146 mb, or 28 percent, behind last year’s sales pace.

In the weekly crop progress and conditions report, The government said U.S. corn harvest has advanced to 5 percent complete, up slightly from last week, but trailing the average pace of 9 percent.

With warm and windy conditions, fields should be experiencing rapid dry down. U.S. corn conditions were unchanged at 68 percent good-to-excellent.

Harvest has not started yet in the majority of growing areas, suggesting it is too early for a harvest low.

Looking ahead to Wednesday’s quarterly grain stocks and 2015 U.S. Small Grain Annual Report, it’s interesting to note that Sept. 1 corn stocks have exceeded the average trade guess in six of the last eight years including the 50 mb higher corn stocks update in 2014 and the 145 mb higher than expected corn carryover in 2013.

Strategy and outlook: Producers:

  • Are 100 percent sold of the 2014/15 crop.
  • Sold 50 percent of 2015 production and own December puts on balance of production.
  • Will exit puts when December hits $3.35.
  • Sold 20 percent of 2016 crop.

SOYBEANS ANALYSIS

Soybeans closed the week 6.5 cents lower.

Last week, private exporters announced sales totaling 482,500 metric tons of soybeans to China and 25,000 mt of bean oil to Egypt.

Weekly export sales of new crop soybeans were 33.5 mb. This leaves the 2015/16 marketing year at 624 mb and 312 mb behind last year’s pace.

This places the sales pace at 34 percent below a year ago.

According to Ag Resource, the export pace for U.S. soybeans is currently 1.45 billion bushels, well behind the current U.S. forecast.

The weekly crop progress reports soybean conditions were down 2 percent from last week to 61 percent g/e.

NOPA reported its members crushed 135.3 mb of soybeans in during August, right in line with average market expectations of 135 mb and sharply above last year’s August crush of 110.6 mb.

It was the second largest crush for August in history. The 22 percent year-over-year gain in crush in August marked the third consecutive month with 20 percent gains.

Soy oil stocks were pegged at 1.48 billion pounds versus 1.62 bp last month, 1.21 bp last year and 1.53 expected Sept. 1 soybean stocks have exceeded the average trade guess in five of the last eight years.

Last year, USDA’s Sept. 1 soy stocks were 35 mb below trade expectations.

Strategy and outlook: Producers:

  • Are sold 100 percent of 2014/15 production.
  • Sold 50 percent of 2015/16 production and own November puts on balance of production.
  • Will exit puts when November hits $8.35.
  • Sold 20 percent of 2016 November.

This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution’s Research Department. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.

Brian Hoops can be reached at (605) 660-1155.

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