January 16, 2018 | Grain Hedge Insights | Kevin McNew | Views: 156

Wheat Prices Drop to One Month Low on Large US Plantings

Corn and Soybeans Trade Higher in the Overnight Session

In the overnight session corn and soybeans are trading higher as wheat stumbles. March corn is up 2 cents, March soybeans are up 5 ¾ cents, March Chicago wheat is down 3 ¼ cents and Kansas City wheat is down 4 ¾ cents this morning.

 

Kansas City wheat broke through the 50 and 20 day moving average with strong volume on Friday after the Seedings report showed larger than expected wheat acres planted throughout the U.S. The USDA announced that 32.608 million acres were planted to wheat which was above the analyst expectations which ranged from 31.1 to 32 million acres.  

 

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Weekend precipitation in Argentina was good, but coverage and amounts were variable across the major crop growing regions. Between 1 to 2 inches of precipitation was observed over the weekend throughout Cordoba and Santiago del Estero, but other areas in Western and central Buenos Aires, La Pampa and southern Cordoba saw less than .6 inches. Net drying occured in the areas that received less moisture as temperatures soared in the 90’s and 100’s on Friday. By the weekend, temperatures moderated with highs in the 70’s and 80’s. Although rains were received throughout Argentina there are still signs of crop stress and a reduction in yield potential. More widespread precipitation is needed to improve the yield outlook.

 

Last week’s commitment of traders report showed that managed money increased their net short position in corn futures and options by 23,940 contracts to 222,516. Money managers also increased their net short soybean position by 7,329 in futures and options to 92,835 contracts. Managed money also increased their CBOT wheat short position in futures and options by 813 contracts to 128,990. KCBT wheat net short position declined by 11,360 contracts to 17,600.


 

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January 12, 2018 | Grain Hedge Insights | Kevin McNew | Views: 337

Snow in the Midwest will help most of the Wheat from Cold Push

Grains Trade Slightly Higher in the Overnight

In the overnight session the grains traded slightly higher with March corn up 1 cent, March soybeans up ½ of a cent and March wheat unchanged. Argentina is still expected to receive rain today and tomorrow which is expected to start in the south and move northward. Follow-up precipitation is in the forecast between January 20-25th.

 

Exporters sell 320,000 metric tons of corn for delivery to unknown destinations during the 2017/2018 marketing year. -USDA

 

Today is a very important day for price direction with the USDA releasing the January WASDE report, the Quarterly Grain Stocks and the Winter Wheat Seedings report. Below are the analyst expectations.


 

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Winter wheat seedings is expected to show that farmers only planted 31.307 million acres, down from 32.696 million acres in 2017. The range of analyst estimates goes from 30.100 million acres to 32.0 million acres. The smallest ever winter wheat planted area was in 1909 when only 29.196 million acres was seeded.

 

Expectations are for ending stocks to be revised higher for soybeans and lower for corn and wheat. The average analyst guess for soybean ending stocks 472 million bushels which is an increase from 445 million bushels in the December report. The revision higher is anticipated due to the slower than needed pace of soybean exports this year. Corn ending stocks are expected to decline slightly to 2.431 billion bushels compared to 2.437 billion bushels in the December report. Wheat ending stocks are expected to decline slightly to 959 million bushels from 960 million in December.

 

Analysts are expecting that the USDA will increase the 2017-2018 soybean production estimates in Brazil to 110.27 million metric tons from December's estimate of 108 million metric tons. Argentina production will most likely be revised smaller due to the dry conditions which have delayed planting. Analyst expect Argentina corn production to slip to 39.9 million metric tons from 41.5 million in December and soybean production to slip to 52 million metric tons compared to 54.5 million metric tons in Dec. If realized that would be the smallest soybean crop out of Argentina in five years.        


 

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January 11, 2018 | Grain Hedge Insights | Kevin McNew | Views: 345

Analysts Feel US Farmers Have Planted the Fewest Winter Wheat Acres Since 1909

Grains Mixed in the Overnight Session

In the overnight session the grains were mixed with March corn unchanged, March soybeans up 1 ½ cents, March wheat down 2 ¼ cents and March Kansas City wheat down 1 ¾ cents.

 

Exporters sell 132,000 metric tons of soybeans for delivery to unknown destinations during the 2017/2018 marketing year. -USDA

 

Weekly ethanol production declined sharply for the second week in a row to 996 thousand barrels per day from 1.032 million barrels per day the week before. In the last two weeks we have seen total weekly production pull back 9 percent. Despite the sharp pullback in ethanol production, ethanol stocks continue to climb. Ethanol stocks increased this week to 954 million gallons and are now 13.5 percent over last years stocks during the same week.   

 

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A report released late yesterday by the Rosario grains exchange estimated Argentina would produce 52 million metric tons of soybeans in the 17/18 marketing year, down from their previous forecast of 54.5 million metric tons. The revision was due to the delays in planting caused by dry weather throughout their country. The report also lowered their corn production forecast to 39.9 million metric tons from 41.5 million metric tons. Further revisions to their production forecast could occur if the rains in Buenos Aires do not materialize over the next week.

 

Export sales were disappointing for wheat and within expectations for both corn and soybeans. Wheat only saw 71,500 metric tons sold for the week ending January 4th which was the marketing year low. Corn booked 437,700 metric tons which was up from the previous week, but was still down 54 percent from the four week moving average. Soybeans booked 607,400 metric tons which was also a week over week improvement.   

 

Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

71

250-450

Corn - OC

437

350-650

Soybeans - OC

607

500-850

 

 

 

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January 10, 2018 | Grain Hedge Insights | Kevin McNew | Views: 357

Chicago soybean futures slid for a third consecutive session on Wednesday

Grains Trade Mixed in Overnight Session

In the overnight session the grains traded mixed with March corn up ¾ of a cent, march soybean down 2 ¼ cents, march Chicago wheat up ¾ cents and Kansas City wheat up ¾ of a cent. Yesterday, wheat was able to rebound and hold onto gains by the end of the day.

 

Exporters sell 260,000 metric tons of soybeans for delivery to unknown destinations, of which 65,000 MT is for 2017/2018 delivery and 195,000 MT for 2018/2019 delivery. -USDA


 

Kansas city wheat found support at the 50 day moving average and was able to close above the previous days high which is a positive sign for prices. The harsh cold temperatures throughout Kansas in the last week of December and first week of January have traders concerned about damage, which can only really be confirmed in the spring. HRW growing regions have also been very dry with the majority of Kansas classified as abnormally dry and some parts in the southwestern part of the state considered moderate or severe drought. Traders are also expecting the Winter Wheat seedings to be reported at 22.327 million acres on January 12th compared to 23.436 million acres planted last year.

 

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The USDA will release its latest supply and demand report on Friday. Analysts are expecting ending stocks for soybeans to be revised higher to .472 billion bushels from .445 billion bushels in December’s report after exports have fallen behind pace this fall. The average trade expectation for corn ending stocks is 2.431 billion bushels which would be down from 2.437 billion bushels in the December report. Analysts are expecting a very slight revision in wheat ending stocks to .959 billion bushels down from .960 billion bushels in December.   

 

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January 09, 2018 | Grain Hedge Insights | Kevin McNew | Views: 368

Wheat Drops for Fourth Session while Corn Bounces from Lows

Grains Mixed in the Overnight Session

In the overnight session the grains were mixed with March corn up 1 cent, March soybeans down 3 ½ cents, March Chicago wheat down 1 ½ cents and March Hard Red Winter wheat down ¼ cent. HRW wheat has pulled back three days in a row and is trading at the 50 day moving average, an area that should provide some support during today’s trade session. The corn market bounced in the overnight after touching previous lows around $3.55 on the March contract.  

 

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Egypt announced on Tuesday that they will be revising and amending the legislation that allowed the agricultural quarantine authority to reject wheat shipments with even trace amounts of a common grain fungus called ergot. After a year of strict policies which disrupted normal wheat trade the ministry said it will accept wheat which contains .05 percent ergot or lower.

The latest weather models show the Argentina will be mostly hot and dry into the Friday causing stress on the crops. Precipitation is expected over the weekend with showers moving from the southern production areas to the north. The showers are greatly needed and should also be accompanied by cooler temperatures which will provide some relief to the crops. Additional rains in the coming weeks will be necessary to improve the crops conditions.  
 

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

January 08, 2018 | Grain Hedge Insights | Kevin McNew | Views: 325

E. Midwest Wheat Likely to See Substantial Snow this Weekend to Middle of Next Week

Grains Unchanged to Lower in the Overnight

In the overnight session the grains were unchanged to lower. March corn was unchanged, March soybeans were down 1 ¾ cents, March Chicago wheat is down 3 ¾ cents and Hard Red Winter wheat is down 4 ½ cents. Temperatures this week should be turning warmer across the majority of the U.S giving the winter wheat area a break from potentially damaging conditions.

 

Exporters sell 120,000 metric tons of soybeans for delivery to Egypt during the 2017/2018 marketing year. Exporters sell 132,000 metric tons of soybeans for delivery to unknown destinations during the 2017/2018 marketing year. Exporters sell 102,100 metric tons of corn for delivery to Mexico during the 2017/2018 marketing years. -USDA


 

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Argentina is still in need of more consistent and soaking rains. As of the latest report, 87.5 percent of soybeans have been planted and 77.9 percent of corn has been planted. Rainfall on last Thursday helped bring some moisture into Buenos Aires, but not all of the region benefited. The rain event also seemed to do little for the subsoil moisture which remains mostly marginal throughout Buenos Aires, Northern Cordoba and Santa Fe. More moisture will be needed to finish up with planting.    

 

On average across the nation corn basis increased 2 cents for corn and 5 cents for soybeans last week. Severe cold conditions combined with the holiday left some end users looking for more grain on a short term basis. Basis along the Ohio and Mississippi River was strong last week as well with nearly double digit gains for both corn and soybeans. Soybean crushing facilities saw strong gains of 10-15 cents in the eastern corn belt and into the southeast.     

  

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January 05, 2018 | Grain Hedge Insights | Kevin McNew | Views: 255

Weekly Cash Commentary

Commentary for Week Ending January 05

Grain basis got a lift early in the week as cold weather helped stymie grain flows. On the week, corn basis was up 2 cents a bushel while soybeans basis climbed 5 cents.

The first trade day of the New Year saw several key facilities in Iowa give producers a dime for quick ship deliveries. But that bump fizzled as dump lines quickly expanded and by mid-week the opportunity had moved back to normal. In beans, a few plants bid it up a bit as the roll happened from Jan to March but those plants also found little reason to keep basis elevated.

On the river markets, it was mostly a strong week especially along the OH River and lower MS River system which saw nearly double-digit gains for corn and bean basis. But by the end of the week, the Saint Louis, MO area was seeing ice and low water conditions which took a hit to spot basis delivery bids.

 

Soy crush facilities were especially strong on the Eastern Cornbelt and down into the Southeast poultry/hog markets. Gains of 10 to 15 cents a bushel were fairly common in these areas.

 

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

January 05, 2018 | Grain Hedge Insights | Kevin McNew | Views: 452

Chicago Wheat Futures Set for Third Consecutive Week of Gains

Grains Were Mixed in the Overnight Session

In the overnight session the grains were mixed with March Corn up 1 ¼ cents, March Soybeans up 4 ¾ cents and March Hard Winter Wheat down 1 ¾ cents this morning. March corn found support again along the 20 day moving average during yesterday's trade session.

 

Ethanol production dropped sharply in the latest EIA report to 1.032 million barrels per day from the previous week of 1.090 million barrels per day. This drop was greater than expected and is the first time since this summer that weekly production fell below last years levels for the same weekly period. Despite the decline in production ethanol ending stocks increased this week to 2.619 million barrels from 22.031 million barrels last week. Ethanol stocks are currently 21 percent above last years levels for the same week.

 

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Weekly export sales were disappointing across the board with all grains missing analyst expectations and recording marketing year lows for the period between December 22nd and December 28th. Corn sales were especially disappointing, falling 92 percent from the previous week with just 101,200 metric tons sold. Soybean export sales were down 43 percent week over week with only 554,000 metric tons sold this week.  

 

Weekly Export Sales-

 

 

Actual

Estimated

Wheat - NC

131

225-500

Corn - OC

101

600-900

Soybeans - OC

554

600-900

 

 

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

January 04, 2018 | Views on the News | Steven Kilger | Views: 439

Looking Forward and Looking Back

Views on the News returns with a look at industry trends in December 2017

Looking Forward and Looking Back

Happy New Year!

 

2018 is upon us and Feed & Grain has a lot planned for the coming year to expand and strengthen the feed manufacturing and grain handling community. We’re starting with the relaunch of Views on the News as a monthly blog. Longtime readers may remember Views on the News in its former rendition, a weekly blog going over the top news stories of the past week. This new iteration will go over the news from the previous month, tying the biggest stories together to form an image of what’s happening in the industry.

 

The news of December 2017 carried some common themes that are indicative of the current business climate:

  1. CHS Closes Three Plants
  2. OSHA and Bartlett Grain Reach Settlement Agreement

  3. CHS Closes South Sioux City, IA, Plant

  4. Explosion at Argentine Grain Port

  5. CHS Elects Directors; 2017 Officer Slate Elected

  6. Alltech Sees High Mycotoxin Levels in 2017 Analysis

  7. NCGA Announces 2017 Yield Contest Winners

  8. ADM Launches New Specialty Feed Additive

  9. Dakotaland Feeds Purchases Diamond W Feeds

  10. Didion Milling, Cambria, WI, Appealing OSHA Fines

Consolidation and streamlining

 

It is no secret that the agriculture neighborhood is shrinking — if not in size then in population. Mega-mergers like Dow-DuPont or the proposed Bayer-Monsanto merger are the most obvious sign of this, but barely a week goes by without a company acquiring, merging or consolidating with another. In December of 2017,  Dakotaland purchased Diamond W Feeds, Nutriad bought out its buyers’ shares in China JV, Cooke Inc. acquired Omega Protein Corporation and ADM sold its Bolivian oilseeds operations.

 

There wasn’t any big news about co-op mergers, a trend that didn’t slow down in 2017, and no real headway made in the Bayer-Monsanto merger. Dow Chemical Company’s sale of a portion of its corn hybrid seed business was part of a deal it struck with regulatory agencies last year in order for the DowDuPont merger to take place.The fallout from that changing landscape deal is still unfolding.

 

Companies both large and small are trying to figure out just how to survive tough economic times in agriculture. CHS Inc.made news by suddenly shutting down three processing plants as it moves out of the soybean protein processing business in an effort to streamline operations. The company hopes to sell the facilities as early as January 2018, but in the meantime, it let go the employees of those facilities.

 

Slowing down for winter

 

With harvest in the rearview mirror and a frigid cold settling in across the Bread Basket, December is a time to reflect on the past year. Year end reports on the highest yields, mycotoxins levels found during the growing season and the 2017/2018 Corn Harvest Quality Reports were all released. Growmark also released its year-end results, with several more expected out in January.  

 

Winter weather has shut down the upper Mississippi River until March 6, and it may cause navigation issues further down as the ice formations narrow usable lanes and drop the water level throughout the river system. But the low river levels also gave the U.S. Army Corps of Engineers is an opportunity to remove some of the more dangerous rocks in the Mississippi River that threaten barges when water levels are low.

 

I hope you enjoy the new and improved Views on the News! We’ll be testing and tweaking it over the next few months so Email me anytime, I would love to hear your suggestions, comments and concerns, or let me know you’re seeing other trends in the industry you want to see covered.  Don’t forget to subscribe to Industry Watch, follow us on Twitter or like us on Facebook for all the latest news in the industry.

January 04, 2018 | Grain Hedge Insights | Kevin McNew | Views: 359

Wheat Holds On To Most of 2-Day Gains Amid Weather Risks

Grains Lower in the Overnight Session

In the overnight session the grains were lower with March corn down ¾ of a cent, March Soybeans down 2 ¼ cents and March Hard Winter wheat down 2 ¾ cents. March Chicago wheat is finding resistance at its 50 day moving average at $4.34 per bushel.

 

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The weather models show that Argentina my see precipitation starting in the south and moving north later today and into Saturday. The precipitation will not be widespread, but will provide pockets of relief to the dry conditions developing in the southern part of the country.

 

The rally in wheat has lifted prices to a six week high, but the damage on the crop from the sub-zero temperatures will be hard to measure at this stage. Damage will be more clear in the spring when winter wheat crops emerge from dormancy, and it may be difficult for a sustained rally in the commodity unless weather conditions continue to threaten winter wheat crop conditions. Temperatures are colder than normal on the eastern half of the US and are expected to stay that way until Sunday for the states west of MN, IA and MO. By Monday IL, IN and OH temperatures will retreat from their seasonally colder than normal temperatures.  

 

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

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