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NOPA Crush falls below estimates; oil demand remains strong

Posted on Oct 18, 2017 in Biodiesel, Vegetable Oil, and Grain

NOPA’s crush data for September came in lighter than expected, but was the highest total in ten years for the month of September. 136.419 million bushels of soybeans were crushed during the month, which was the first month of the new crush season.  September’s crush was down 4.22% from last month but 4.75% higher than the amount crushed last September.  Analysts expected the crush to come in at 138.071 million bushels according to an average of analyst estimates in a Reuters survey. Meal exports totaled 487,397 tons, up 14.17% month over month and 10.87% more than September of 2016.

Soybean oil stocks were lower than anticipated.  Analysts had been expecting stocks to fall to 1.332 billion pounds.  However, strong demand pulled stocks down to 1.302 billion, 8.12% lower than August and 5.38% less than September of 2016.

Cumulative bushels crushed by NOPA members during the 2016/17 season are 136.42 million. The USDA is expecting to grow the crush by 2.16% to a new record of1.940 billion bushels.  The 2016/17 crush totaled 1.899 billion bushels.  Through September, NOPA crush members have crushed 4.75% more soybeans than last season.   This exceeds the USDA projection.  However, we are only one month into the current crush season.

NOPA September Crush Data

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Bean Meal Corrects as Harvest Delays Generate Volatility

Bean meal prices started to correct on Tuesday, after running up sharply in the wake of last week’s WASDE report. Bullish sentiment provided the backdrop of the recent runup, following news that bean production would be softer than expected.  The Midwest bean and corn harvest has been delayed, which is provided some indecision amongst traders, which in turn has allowed some volatility to enter the market. The most recent commitment of trader’s report shows that traders squared up positions ahead of the latest USDA-WASDE report.

A few of the mid-western soybean harvest powerhouses are seeing their soybean harvest well behind the historical normal. 45% of Minnesota’s soybeans are harvested which is 37 points behind the average pace. In addition to Minnesota, Iowa and Nebraska are seeing big delays on soybeans. Iowa soybean harvest is 32% complete, and Nebraska 33% complete both 34 points behind. The delay is creating some uncertainty which has provide the back drop for profit taking.

Hedge funds seemed to square up short positions in futures and options just in time, and appear to have avoided most of the pain that would have incurred if they were short into the WASDE number.  According to the most recent commitment of trader’s report released for the date ending October 10, 2017 two days before the WASDE data, managed money reduced short position in futures and options by 9.9K contracts, while increasing long position in futures and options by 1.9K contracts. Traders who are long futures and options outnumber traders who are short in the managed money category by 13K contracts, 49K to 36K.

The technicals show that prices are correcting following last week’s surge, and could fall back to support near the 10-day moving average at 321.7. Resistance is seen near the October highs at 331.8.  A break of this level could lead to a test of target resistance near the July highs at 349.7. Positive momentum is decelerating as the MACD histogram is printing in the black, but the trajectory is declining which reflects consolidation. The RSI (relative strength index) is dipping after failing near 70, which also reflects declining positive momentum.

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For any questions or comments in regards to Bean Meal Corrects as Harvest Delays Generate Volatility, please contact David Becker at Google+, or LinkedIn

 

Crop Progress – Crop conditions improved for soybeans but fell for cotton and peanuts, as harvest rolls on

93% of the corn crop has dented and 51% of the crop is matured. Corn maturation is 13 points behind the 5-year average and trails last season’s pace by 19 points. The corn harvest is 11% complete, up 4 points from last week and 6 points slower than the 5-year average.  Crop conditions held steady this week. 61% of the crop is rated in good to excellent condition, 26% is fair, and 13% is rated poor to very poor. Last year’s crop conditions were 74% good to excellent, 19% fair, and 7% poor to very poor. Pennsylvania and Tennessee are experiencing the best conditions, with 93%/87% in the good/ex category. South Dakota is seeing the worst. 27% of the South Dakota corn crop is rated poor to very poor and 40% good/ex. Drought conditions worsened in Iowa but improved in South Dakota. 37% of Iowa is in a moderate drought. This is up from 33% last week. 11% is experiencing severe drought and 4% is under extreme drought conditions. 72% of South Dakota remains in a moderate drought, 40% in severe, and 6% is experiencing extreme drought. Severe and extreme drought conditions improved by 4 and 1 point respectively.

63% of the soybean crop is dropping leaves, up 22 points from last week and equal to the 5-year average. The soybean harvest is currently 10% complete, a point ahead of last year’s pace but 2 points behind the 5-year average. Crop conditions improved over the past week. 60% of the crop is rated as good to excellent, 28% as fair, and 12% poor to very poor. This is a point better in the Good/Ex category.  Tennessee has the best rated soybean crop, with 82% of its fields seen in good to excellent condition. Kansas is seeing the worst conditions with only 43% of the crop in good to excellent condition and 20% as poor to very poor.

Cotton bolls are opening in 57% of the fields, up 13 points from last week and 4 points below the 5-year average. The cotton harvest is 14% complete, up 3 points from last week and 5 points ahead of the 5-year average.  The condition of the cotton crop moved lower. 60% of the fields are rated in good to excellent condition, 26% are rated fair, and 14% poor to very poor. This is down 1 point in the good to excellent category. Last season 48% of the cotton crop was rated good to excellent and 14% as poor to very poor. In California, crop conditions remain 100% good to excellent. South Carolina has 93% of its crop rated as good to excellent. Less favorable readings are seen in Georgia, where only 41% of the crop is rated good to excellent and 30% as poor to very poor.

The peanut harvest 12% complete, up 6 points from last week and equal to the 5-year average.  The condition of the peanut crop declined over the past week. 75% of the crop is rated good to excellent, 18% as fair, and 7% as poor to very poor. Conditions fell a point in the good to excellent category and worsened two points in the poor/very poor ranking. This year’s crop condition is in much better shape than last year’s, which showed 63% rated as good to excellent and 9% as poor to very poor.

Winter wheat planting is 24% complete, up 11 points from last week but 4 points behind the 5-year average as well as last season’s pace.

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CWG market was well sold for Oct / Nov

Posted on Oct 18, 2017 in Animal Fats & Oils

Four cars of packer BFT traded at $0.2600 Chicago this afternoon with an additional four offered and unsold at that price. Tech tallow was offered at $0.3200 Chicago and unsold as of press time.

CWG trading was reported steady in trucks out of the Mo. River market, $0.2400 – 0.2500 with light volume reported as low as $0.2350 and as high as $0.2550. There was a bid for Chicago CWG at $0.2500, but no sales were reported as of press time. Sources indicated that the nearby CWG market, particularly the rail market, was well sold for Oct/Nov.

Yellow grease trading was lower out of the Illinois market, bottoming out at $0.2350. Carolinas action was lower as well, $0.2650 – 0.2700. Poultry fat action was steady out of the Mid South, but reported lower into the Carolinas and Delmarva markets. Given the weaker tone to the market, sellers seem to be discounting material in order to keep it moving.

Please contact Ryan Standard at 563.223.9021 or ryan@thejacobsen.com with any questions, comments or trading.

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Sellers have reported a pick up in bids

Posted on Oct 18, 2017 in Hide & Leather

Trading was lower on dairy steers and dairy cows by $1 today. Branded steers were reported steady. Most in the market commented that selections are steady and the downside of the market, especially on premium selections, appears to be done. Sellers have reported a pick up in bids and there were suggestions that a few prices could pick up before the end of the week.


Today’s Trades

Packer Sales

BS 70 MIN @ $56.00
HBH 51 MIN @ $41.00 OR 0.6275
SHNDC 52/54 @ $40.00 OR 0.5875

Processor Sales

HNDS 60/62 @ $56.00
HBH 52/54 @ $39.00 OR 0.5750
SHNDC 52 MIN @ $36.00 OR 0.5400


Cured and Wet Blue Export Shipments by Selected Countries  —  Through October 5

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The Closing Numbers

Posted on Oct 18, 2017 in Biodiesel, Vegetable Oil, and Grain

In somewhat of a rare occurrence, heating oil and soybean oil finished the day unchanged.  Leaving the BOHO spread at 69 cents per gallon.  Opposition to Scott Pruitt seems to be growing as a group of Senators had lunch with him in an effort to back him off his opposition to the RFS. According to Senator Grassley, the meeting he is spearheading, will get Pruitt and the EPA “back on track”.  Senator Tammy Duckworth contributed to an opinion piece published by the Hill, which outlines some of the Trump administration’s efforts to undermine the biofuels industry through actions, while attempting to publically appease rural constituents.

The RINs market seemed to follow HO and SBO. Values and finished the day largely unchanged across the board.  California’s LCFS credit edged higher though, as bids moved up to 93 and offers to 95.  94 traded earlier in the day.

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Bean Oil Rallies as Bullish Sentiment Follows WASDE Report

Thursday’s WASDE report released by the USDA, generated bullish sentiment, and helped prices gain traction.  Declining yields, was described as the catalyst for the estimated drop in production which allowed prices to move higher. The most recent commitment of trader’s report showed that hedge funds were poised for a move higher ahead of the WASDA report.

Bean oil prices moved higher on Monday, following a surge higher on Friday, as bullish sentiment perpetuated in the wake of the WASDA report. U.S. oilseed production for 2017/18 is now projected at 132.3 million tons, lower by 0.5 million from last month.  Soybean production is forecast at 4,431 million bushels, flat from last month with higher harvested area offsetting lower yields. Global oilseed production for 2017/18 is projected at 577.0 million tons, down 1.6 million as reductions for soybeans. Some of the decline was offset by replacements from competing oils.

Since the latest CFTC report is released for the date ending October 10, (last Tuesday) and the WASDE report was on October 12, (last Thursday), bullish sentiment will likely be reflected in next week’s report. What we can garner from the latest report is that hedge funds were long futures and options, and although there was some profit taking, which reduced last week’s open interest in the managed money space by 2.7K contracts. Simultaneously, hedge fund increased short positions by 4.8K contracts. Total open interest shows that those that are long futures and options outnumber open interest that is short by 23K contracts, 71K to 48K.

Technicals

The technicals on the bean oil contract show that prices are attempting to form a bottom, with support near the 10-day moving average at 33.22. Prices could rumble up to resistance which is seen near the September highs at 36 cents per pound. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD index (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the index).

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For any questions or comments in regards to Bean Oil Rallies as Bullish Sentiment Follows WASDE Report, please contact David Becker at Google+, or LinkedIn

 

NOPA Crush falls below estimates; oil demand remains strong

NOPA’s crush data for September came in lighter than expected, but was the highest total in ten years for the month of September. 136.419 million bushels of soybeans were crushed during the month, which was the first month of the new crush season.  September’s crush was down 4.22% from last month but 4.75% higher than the amount crushed last September.  Analysts expected the crush to come in at 138.071 million bushels according to an average of analyst estimates in a Reuters survey. Meal exports totaled 487,397 tons, up 14.17% month over month and 10.87% more than September of 2016.

Soybean oil stocks were lower than anticipated.  Analysts had been expecting stocks to fall to 1.332 billion pounds.  However, strong demand pulled stocks down to 1.302 billion, 8.12% lower than August and 5.38% less than September of 2016.

Cumulative bushels crushed by NOPA members during the 2016/17 season are 136.42 million. The USDA is expecting to grow the crush by 2.16% to a new record of1.940 billion bushels.  The 2016/17 crush totaled 1.899 billion bushels.  Through September, NOPA crush members have crushed 4.75% more soybeans than last season.   This exceeds the USDA projection.  However, we are only one month into the current crush season.

NOPA September Crush Data

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INDUSTRY-RELATED NEWS


Oct 17 (The Hill)  A vote for Bill Wehrum is a vote against the RFS – There is a reason that the Renewable Fuel Standard (RFS), our nation’s policy governing the production and sale of biofuels, has broad bipartisan support in Congress. This policy is helping us revive rural economies, reduce our greenhouse gases, and become less dependent on foreign oil. Despite these benefits, in the ten months that Donald Trump has been president, his administration has launched unprecedented attacks on the program – attacks that fly in the face of promises Trump made as a candidate to our nation’s farmers that he would champion the RFS program if elected. READ MORE

Oct 13 (The Washington Post)  The Energy 202: The EPA is targeting biofuels. Chuck Grassley isn’t happy –  As chairman of the Senate Judiciary Committee, one of the congressional committees investigating Russian interference in last year’s election, Charles E. Grassley is in a better position than most other Republicans in Congress to tighten the screws on the Trump administration.   READ MORE

Oct 09 (CNN) Pruitt announces withdrawal of Clean Power Plan – Environmental Protection Agency Administrator Scott Pruitt announced Monday his agency’s plans to withdraw the Clean Power Plan, the sweeping Obama-era rule regulating greenhouse gas emissions. While speaking in Kentucky at an event with Senate Majority Leader Mitch McConnell, Pruitt said he will sign the proposed rule repealing Obama’s plan Tuesday. “When you think about what that rule meant, it was about picking winners and losers. Regulatory power should not be used by any regulatory body to pick winners and losers,” he said at the event. READ MORE

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