December 09, 2016 | Grain Hedge Insights | Kevin McNew | Views: 59

USDA Report to be Released Later this Morning

In outside markets, Crude Oil and US Dollar are Higher

USDA Report to be Released Later this Morning

Corn and soybeans were holding on to modest gains going into the morning trade break while wheat drifted lower. Outside markets saw crude oil and the US dollar higher.

 

USDA announced the sale of 132,000 MT of soybeans to unknown destinations.

 

This morning at 11 am CDT, USDA will release their latest WASDE report which is expected to show only minor revisions. Traders look for a slight drop in soybean carry-out and minor bump higher in corn stocks.

 

Overnight, a group of Israeli private buyers bought corn and feed barley to be sourced from optional origins in a tender which closed on Thursday. The group had sought 95,000 tonnes of corn and 30,000 tonnes of barley.
Taiwan's maize industry procurement association MFIG purchased around 65,000 tonnes of corn expected to be sourced from the United States in an international tender which closed on Thursday.

 

Argentina saw some rains yesterday in about 15% of the Grain Belt, but the outlook for the next week shows limited rain potential. But, temperatures are likely to remain normal. The best chance for rain in Argentina is in the 11 to 15 day forecast. Meanwhile Brazil has nearly ideal growing conditions.

Oil futures firmed on Friday, consolidating gains ahead of a weekend meeting of major oil-producing countries for a deal to cut production. Traders and analysts are now awaiting the outcome of a meeting between OPEC members and oil producers from outside the cartel, including Russia. OPEC is hoping to get big producers outside the cartel to cut a further 600,000 barrels a day. Russia has indicated it will take on half that burden.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

December 08, 2016 | Grain Hedge Insights | Kevin McNew | Views: 102

Soybeans Were Off Sharply in the Overnight

Crude Oil Drifts Higher

Soybeans Were Off Sharply in the Overnight

Soybeans were off sharply while wheat made a rare move into positive territory. Corn was mostly steady from Wednesday’s close. In outside markets, equity futures added to yesterday’s sharp gains while crude oil drifted higher.

 

USDA announced the sale of 332,000 MT of corn to South Korea and 136,000 MT of soybeans to unknown destinations.

 

Overnight, India’s parliament was scrapping the wheat import duty. Private importers have already purchased about 500,000 MT of wheat, largely from Australia, in the past month after the world's second-biggest producer of the grain cut the duty to 10 percent from 25 percent in September. In other wheat news, Saudi Arabia was tendering for 715,000 MT of hard wheat and Ethiopia was in the market for 70,000 MT.

Yesterday, rains were widespread over Mato Grossos in Brazil and are expected to expand across all but far south corn/soy areas next 5 days. The 6-10 day forecast shows more restrictive rains contract in the Northern half of Brazil but return to the south in 11-15 day. Thunderstorms popped up overnight benefiting N. Cordoba/N. Santa Fe in Argentina. Showers very limited next 10 days with better rains possible 11-15 day in NE 1/2 Arg.; dryness lingers Buenos Aires. Heat is likely to build across Arg. corn/soy late 6-10 day/early 11-15 day (90’s) adding to stress in drier C. 1/3 of belt.

 

Weekly Export Sales-

                                      Actual         Expected

Corn                               1,495         700-1,000

Soybeans                        1,461      1,000-1,300

Wheat                               503            300-500

 

Oil prices steadied around $50 a barrel on Thursday, close to the week's lows, on doubts proposed OPEC production cuts would be sufficient to balance the market, although a weaker dollar supported sentiment. EIA U.S. crude oil inventories dropped 2.4 million barrels in the week to Dec. 2, compared with analyst expectations for a draw of 1 million barrels.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)


 

December 07, 2016 | Grain Hedge Insights | Kevin McNew | Views: 78

Grains were Subdued in the Overnight

Crude Oil continues to sink

Grains were Subdued in the Overnight

Grains were subdued overnight as wheat and corn drifted slightly down and soybeans went into the morning break mostly unchanged. In outside markets, crude oil continued to sink following yesterday’s sharp sell-off and equity futures gave up some of yesterday’s robust gains.

 

USDA reported exporters sell 330,000 tonnes of US Soybeans to China including 66,000 tonnes for 2016/17 delivery and 264,000 tonnes for 2017/18. Also this morning, exporters sell 136,000 tonnes US Soybeans to unknown destinations for 2016/17 delivery.

 

Palm oil lost ground overnight in a corrective move, while China soybeans were up 17 cents overnight. China continues to see limited imports of DDGS from the US which is helping fuel the demand for soymeal in livestock feed rations.

A group of Israeli private buyers has issued international tenders to purchase 95,000 MT of corn, 30,000 MT of feed barley and 10,000 MT of sorghum, all of optional origins. USDA will release their Dec crop report on Friday with little changes expected to the balance sheet.

 

Weather in South America shows beneficial rains on the horizon in Brazil. But Argentina looks dry for the next 10 days. However, temperatures are expected to be seasonally mild but temps are expected to heat up late in this forecast period. In the 11 to 15 day outlook the latest model runs show more precip is likely.  The longer term forecast of 16 to 30 day shows wetter conditions for Argentina.

 

Oil prices slipped on Wednesday on doubts production cuts promised by OPEC and Russia would be deep enough to end a supply overhang that has weighed on markets for more than two years. This week’s API report showed the second consecutive week of crude inventory draws that exceeded expert predictions. The report estimates a 2.21 million barrel drop in inventories, as opposed to the 1.37 million barrel decline expected by analysts.


 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

December 06, 2016 | Grain Hedge Insights | Kevin McNew | Views: 109
December 06, 2016 | Grain Hedge Insights | Kevin McNew | Views: 157

Soybeans Continue their Climb

Corn and Wheat remain lackluster

Soybeans Continue their Climb

Soybeans continued to climb higher overnight, besting yesterday’s bullish move; corn and wheat were lackluster.

 

This morning, Stats Canada came in with a higher than expected wheat production estimate. The trade looked for a 30.7 MMT but the agency pegged it at 31.7 MMT. For Canola, output in Canada was slightly below estimates coming in at 18.4 vs expectations of 18.8.

 

In weather, dryness is starting to emerge as a concern in Argentina but Brazil is continuing to see rain potential in the dry Central region. Argentina saw limited showers in the SE yesterday with minimal rains expected the next 10 days. In the 11-15 day forecast rains favor the East and North, but the drier southern regions are not expected to see much moisture.

 

Crude oil prices were lower on Tuesday for the first day since the Organization of Petroleum Countries agreed to limit their production last week. But on Monday, a Reuters survey found that OPEC's output hit a record high in November, indicating that member countries could have a hard time sticking to their plan.


 

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December 05, 2016 | Grain Hedge Insights | Kevin McNew | Views: 134

Grains Firmer to Start the Week

Crude Oil Advances to Fresh Highs

Grains Firmer to Start the Week

Grains were firmer to start the week led by soybeans. Crude oil also advanced to fresh highs.

 

USDA announced a 426,000 MT sale of soybeans to China.

 

Rains were good over the weekend in SA, especially in Brazil easing dryness in Parana/Sao Paulo/N. Rio Grande do Sul. Argentina got only 15% coverage over the weekend with 5% coverage expected in the next week. The extended outlook for 16 to 30 day, Brazil looks fairly wet for much of the country but Argentina may see some dryness in the central and southern parts of the country.

 

Private consultant Abiove pegs Brazil’s soy crop at a record-large 101.3 MMT; however, that is below the 102 MMT forecast of USDA. In wheat, the Australian govt forecasted the wheat crop there at 32.6 MMT, a big jump from their Sep forecast of 28.2 and higher than the record large year of 2012 when they hit 29.6.

 

China is aiming to produce 4 million tonnes of ethanol by 2020, doubling output from the current level, even as it keeps tight control over the use of food grains to make the bio-fuel, a government plan showed on Monday.
The world's largest energy consumer plans to raise the non-fossil fuel portion of primary energy consumption to 15 percent from 12 percent by the end of its current five-year plan in 2020.

Crude prices were up on continued optimism about the OPEC output cut deal. However, one large uncertainty in the global supply balance is output from the US shale producers, who proved more resilient than expected to weak oil prices. U.S. energy firms extended their recovery in oil drilling into a seventh month last week,hitting 477 rigs. That’s up from the low set in May 2016 of 314.



 

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December 02, 2016 | Grain Hedge Insights | Kevin McNew | Views: 166

Weekly Cash Comments

Weekly Cash Commentary for week ending December 02, 2016

The cash markets were up this week, posting modest gains.

 

On average, corn gained 2 3/4 cents per bushel, securing the fourth week of gains. Ethanol plants saw positive movement as well up 5 1/2 cents. Ethanol production was off slightly by about 2,000 barrels at 1.01 MBPD. Stocks were lower as well, 504,000 barrels less than last week. Corn along the river gained 1 cent moving only slightly higher.

 

Soybeans gained an average of 2 cents per bushel. Crush facilities fell slightly by 1/2 cent this week. Palm oil hit a 4-year high on Thursday and continues to provide some support for soybeans.  Soybeans along the river regained last week’s losses gaining 8 3/4 cents.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

December 02, 2016 | Grain Hedge Insights | Kevin McNew | Views: 160

Grains Higher in Overnight Trade

Crude Oil Reverses Direction

Grains Higher in Overnight Trade

Grains were higher in overnight trade trying to recover from two days of steep losses. In outside markets, crude oil reversed direction drifting back to the $50 mark and the US dollar dipped lower as well.

 

Wheat has been hammered this week as Southern Hemisphere production comes online. Australia is thought to have a bumper crop it’s harvesting with expectations north of 30 MMT versus USDA at 24 MMT. Argentina is offering new-crop wheat prices at 12.5% protein for export at $10 a MT less than US Fob prices for 11.5% protein.

 

Argentine growers have planted 46% of the 19.6 million hectares (48.4 million acres) expected to be sown with soybeans in the 2016-17 season with the country's central farm belt enjoying good growing conditions, the Buenos Aires Grains Exchange said on Thursday.

Yesterday, USDA’s soy crush was reported to be at 175.9 MB a record large for October and for the first two months of the marketing year crush is up 3% over last year versus a USDA annual forecast of a 2.3% jump.  

 

U.S. employers boosted hiring in November and the unemployment rate dropped to a more than nine-year low of 4.6%, making it almost certain that the Federal Reserve will raise interest rates later this month. Non-farm payrolls increased by 178,000 jobs last month. The solid gains in employment likely reflect rising confidence in the economy.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

December 01, 2016 | Grain Hedge Insights | Kevin McNew | Views: 161

Wheat and Corn Continue to Grind Lower

Soybeans Gained Ground Overnight

Wheat and Corn Continue to Grind Lower

Soybeans gained ground overnight, but turned sharply down on export sales news this morning. Wheat and corn continue to grind lower. Crude oil continued its climb advancing into the $50 range for the first time since October, while the US dollar was off in early trade.

 

Palm oil was up overnight hitting a 4-year high, while China soybeans posted modest gains but continues to be the highest it's been in a year. China is reported to be doing most of its buying out of Brazil and only doing modest shopping with the US.

 

The forecast for the next week in South America will feature drier conditions in most crop areas as a strong high pressure system drives the weather pattern for at least five days. This high pressure system will bring a brief pulse of moderately warm temperatures through Argentina and Brazil, but the strongest influence will be the suppressed rainfall as Argentina, Southern Brazil, and the eastern half of Center-West Brazil receive 0.4-1.2 inches below normal precipitation through the next 10 days.

Japan's Ministry of Agriculture bought a total of 158,514 tonnes of food quality wheat from the United States and Canada in a regular tender that will close late on Thursday. The global wheat market may came under pressure as Argentina and Australia's wheat crop seems robust as harvest hits there. Argentina farmers are said to be eager sellers at harvest with big yields and no export taxes as in the past.

 

WEEKLY EXPORT SALES

                                         Actual          Expected

Corn                                   761.6          900-1,200

Soybeans                            1,399       1,000-1,400

Wheat                                483.5            300-500

 

OPEC reached a deal to cut 1.2 million barrels per day in production. The cut of 1.2 was at the upper end of expectations (0.7-1.2 million bpd). An additional cut of 0.6 million bpd from non-OPEC countries could significantly add to what has been announced by OPEC.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

November 30, 2016 | Grain Hedge Insights | Kevin McNew | Views: 162

USDA Forecasts a Big Drop in Corn Acres for 2017

Grains Swing into Positive Territory Overnight

Grains swung back into positive territory overnight following Tuesday’s sharp selloff. Crude oil catapulted higher overnight gaining $3 a barrel on news OPEC would cut production.

 

USDA announces a sale of 123,000 MT of soybeans to China.

 

Palm oil was up sharply overnight but China soybeans and soymeal were off following the US lower from Tuesday. Crush margins and hog margins in China, but there is signs that they are starting to move to South America for supplies.

 

In the long-term China's grain production will fall by 15 MMT, or about 2.5 percent, in the five years to 2020, as the government withdraws severely polluted or degraded farmland for rehabilitation, a state planner official said on Wednesday. Under the proposal, some five million hectares of land - about four percent of the country's total arable land - will be taken out of production and either rehabilitated or turned over to forest or grasslands,

 

On Tuesday, USDA released their long-term forecasts for agriculture. Looking at their 2017 acreage numbers, call for a big drop of 4.5 million acres in corn and soy acres up only 1.8. Traders expect a much bigger swing high in beans and a less dramatic drop in corn. Yesterday was FND-eve, sending longs exiting heavily in Dec corn and wheat which contributed to widening of spreads to March and a sharp plunge in flat price.

Crude oil got a jolt as top oil producer Saudi Arabia said a deal was close despite some loose ends. Iran, which is considered crucial to a breakthrough because its output has been rising after western sanctions were lifted, said it was also "optimistic".

 

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