June 22, 2018 | Grain Hedge Insights | Kevin McNew | Views: 166

U.S. Dollar Eases Off 11-Month High

U.S. manufacturing data released by the Fed showed weaker than expected results

U.S. Dollar Eases Off 11-Month High

Chinese Soy Stocks Hit 8-Year High

Soy stocks at ports in China hit a cumulative 7.8 MMT this week which is the highest mark in eight years. Normally stocks peak in August, so Crushers likely loaded up on the Brazilian product in fear that soured U.S.-China trade relations would ultimately make beans harder to obtain.


Export Sales Announcements

Export sales of 131,300 metric tons of corn for delivery to Mexico. Of the total 30,000 metric tons is for delivery during the 2017/2018 marketing year and 101,300 metric tons is for delivery during the 2018/2019 marketing year. Export sales of 117,000 metric tons of corn for delivery to Panama during the 2018/2019 marketing year.

 

Ukraine Wheat Harvest Likely to Shrink

Ukraine’s Ag Minister pegged the wheat harvest this season between 23 and 26 MMT. Ukraine harvested 26.2 MMT. Weather forecasters said this month most Ukrainian central, eastern and southern regions have seen no rain since April and a severe drought could shrink this year's wheat harvest by 15 to 30% below original forecasts.


U.S. Dollar Eases Off 11-month High

The dollar pulled back from its 11-month high after U.S. manufacturing data released by the Fed showed weaker than expected results. The dollar has rallied sharply in recent months as the Fed has signaled more interest rate hikes to come. But traders are wary of an economic slowdown tied to U.S. trade policies going forward.

In the last two months the USD index had shot up 6%. A higher US dollar is detrimental to US export sensitive commodities.

 


Weather Mostly Favorable

Rains should continue through the next five days, likely a factor producing near to below normal temperatures. This pattern will remain favorable/positive for crops. A warm-up is on the way yet again for the 6-10 and 11-15 day forecast.

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

June 20, 2018 | Grain Hedge Insights | Cody Bills | Views: 316

Soybeans Hit New Low

Chinese officials saying they will fight back against Trump’s “blackmailing”

Soybeans Hit New Low

Soybeans Hit Lowest Level In 10 Years After Trump Threatens More Tariffs

November soybeans traded as low as 864.5, the lowest in nearly a decade, following Monday’s news that President Trump would consider an additional 10% tariff on $200 billion worth of goods. Chinese officials immediately responded saying they would fight back against Trump’s “blackmailing” with tariffs of their own. Monday’s USDA Crop Conditions report offered no real support, downgrading beans by 1% to 73% G/E but well above the 5 year average of 68% G/E.

Ethanol Closed At Contract Lows As Chinese Buyers Dry Up

Earlier this year, China announced a plan to use E10 fuel nationwide by 2020, potentially opening the door to much greater imported quantities from the US. China has not made a significant purchase of ethanol in nearly 6 months and American stockpiles are growing, reaching a 10 week high of 22.174 million barrels as of last week’s EIA data. Dec corn closed down 1.75 cents after dropping as much as 17 cents and Jul ethanol finished trading at $1.397 per gallon, a contract low.

Overnight Tenders

South Korea’s Major Feedmill Group has issued an international tender for 138,000 MT of corn to be sourced from the US, Black Sea, South America, or South Africa. Following this announcement, South Korean corn purchases in June have now reached 1.5 million metric tonnes. Lower prices due to good American growing conditions and blowback from the US/China trade war has lead to a surge in exports to other Asian countries.

 

Flash Flood Warnings In Effect In Parts Of Iowa, Nebraska, and South Dakota

E NE, W IA, and SE SD have received good rains over the past week but an additional 2-3 inches on the forecast have led to flood warnings and watchings. The National Weather Service says that recent rains have pushed the Missouri River and its tributaries higher, putting IA and NE counties along the river at risk.


The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

June 18, 2018 | Grain Hedge Insights | Cody Bills | Views: 278

Beans Mark One Year Low

Grains down in overnight session

Beans Mark One Year Low

China Responds To Trump With Tariffs Of Their Own, Beans Make 1 Year Lows

Beijing announced that they will counter with $50 billion worth of tariffs on American goods. Soybeans are squarely in their sights, as well as aircraft and cars. President Trump announced $50 billion worth of tariffs on Friday. The proposal will go into effect on July 6 and will hit goods ranging from semiconductors to industrial chemicals with a 25% tariff. Jul 18 beans traded as low as 903.00 per bushel, a year low. Dipping below the $9 handle would make a 2.5 year low.

Managed Money Goes Net Short On Corn; Cut Down Their Longs For Beans

Last Friday’s Commitment of Traders report showed heavy selling pressure by speculative investors for corn, which is now net short by 12,238 contracts. Last week, MM was net long by 78,696 contracts, showing a week on week change of 90,934 lots. Money managers are now only 105 contracts net long due to trade complications with China and excellent US crop conditions. This is the smallest position held by managed money since February. HRW saw an increase in MM’s position of 3,439 to 60,606 contracts net long. Chicago wheat had a marginal increase of 77 lots, bringing MM’s total net long up to 25,135 contracts.

Brazilian Soybean Premiums Rally On Renewed Chinese Demand

Chinese buyers are looking increasingly to Brazil during the time of the year when old crop supplies usually dry up. Spot prices for soybeans from Paranagua increased 40 cents to +120 SK8 just last week. Increases in freight rates due to government mandated minimum prices have added on to the cost of beans. The price floor has also led to a decrease in trucks delivering grain, with 14.2% less in Parangua and 22.4% less in Santos.

South Korea Stops Shipment Of Canadian Wheat Due To GMO

South Korea has suspended any imports of wheat or flour from Canada following the discovery of a GMO variety of wheat from Alberta. This news closely follows Japan’s decision to halt tenders and sales from Canada because of the presence of GMO. Canada is South Korea’s #3 supplier of wheat, accounting for 9.2% of the Asian country’s imports. In 2017, South Korea imported 226,355 MT of wheat from Canada.

 

The risk of trading futures, hedging, and speculating can be substantial.

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June 15, 2018 | Grain Hedge Insights | Cody Bills | Views: 459

Trade War Intensifies

Mexico may impose tariffs on U.S. corn and soybeans

Trade War Intensifies

Trade War Intensifies

Overnight it was reported that President Trump would release a list of 800 Chinese product categories, down from 1,300 previously, that would have a combined $50 billion in tariffs. Officials state Trump no longer believes that Beijing's influence over North Korea is a compelling reason to ease up on trade talks now that his administration has opened up a direct line of communication.

China vowed on Friday to strike back quickly if the United States hurts its interests. "If the United States takes unilateral, protectionist measures, harming China's interests, we will quickly react and take necessary steps to resolutely protect our fair, legitimate rights," Chinese Foreign Ministry spokesman Geng Shuang told a regular daily news briefing.

On top of that, reports were circulating that Mexico was looking at imposing tariffs on U.S. corn and soybeans. Neither crop was on Mexico’s original list released a few weeks ago for targeting the US. But now, Mexico is thought to be studying ways to mitigate the economic pain of such a move.

 

Japan Halts Canadian Wheat Supplies on GMO finding

Japanese farm ministry said on Friday it has suspended its tender and sale of wheat from Canada after grain containing a genetically modified trait was discovered last summer in Canada's Alberta province. The Canadian Food Inspection Agency (CFIA) said on Thursday the wheat containing a genetically modified trait, developed by Monsanto Co BAYGn.DE to tolerate the Roundup weed-killer, was discovered in Alberta. "We are suspending the tender and sale of Canadian wheat until we confirm that the Canadian wheat that Japan buys contains no GMO," an official at the Japanese farm ministry said.

 

South Koreans Back in for Corn

Bargain buying continued overnight as two different feed groups from South Korean (KFA and NOFI) were both in the market tendering for around 60,000 MT of corn.

NOPA Crush Expected to be Record Large

Analysts expect at 165.1 MB crush for the National Oilseed Processors Association (NOPA) data in May. That would be 8% higher than the month's all-time high. NOPA’s report is due at 11 am CDT.

 

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June 14, 2018 | Coach’s Corner | Greg Martinelli | Views: 507

Fail Fast

Here's how to learn fast and recover even faster

Fail Fast

Fail fast and small. Recover fast and big. Please understand, I don’t mean fail intentionally. In sales, however, trying to achieve perfection in everything before actually going to the market will result in more failures, not less.

How so?

Strangely enough, a recent documentary about The Improv comedy club is a great analogy. Located in New York, The Improv was basically an open mic comedy club where almost every great comedian got started. During the documentary, they interviewed Jerry Seinfeld, Jay Leno, Ray Romano, etc. They showed clips from their first years in comedy and those first times on stage. Every single one of them said the same thing.

  1. I was terrible in the beginning
  2. I worked hard and kept at it
  3. I improved over time by testing material at The Improv
  4. I never went to the big stage (the Tonight Show or Letterman) before testing it out at The Improv

We can learn a lot from these four observations. You take your products, your techniques, your sales questions and you try them out in a small way. Maybe, that’s with a “safe” customer. Maybe it’s in a “safe” part of your territory. But, it’s with real customers or prospects where you can see real reactions. From those reactions, you modify, work hard and eventually you improve.  

What about customer surveys, expert panels and customer panels? All good if you have the budget, but a word of caution. Customer surveys are not the same thing as opening up their wallet and buying. So, take the results with a cautious eye. If you give someone a free sample and a coupon and then have them fill out a survey, odds are likely they want to “be nice” and say good things. This doesn’t mean they will actually take the next step and buy. Panels are sort of the same way. Hired to give their opinion, they can be easily influenced or favor the company that is bringing them together. Again, this might not translate into actually buying when the choice is presented.

So, how can we fail fast and small, but recover faster and recover bigger? If you have been on territory for any length of time, you should have those customers and those areas of your territory that you feel safe with. These are loyal customers that you have worked very hard for and earned a lot of trust and respect from. These customers will tell you exactly how they feel about you, your products and your company. Treasure these relationships because they are your version of The Improv. This is where you take your ideas for products or programs and test them out in a small way.

Over the many years of launching products and different programs, I can’t tell you how many times this technique paid off in a big way. Several times, it saved embarrassing failures before launching to the whole marketplace. However, most of the time, it yielded small tweaks that made the product or program just a little better and a little more of a fit for the customer we were going after.

Launching a new premium dog food campaign, our supplier recommended using a 1,000# ISO (Initial Stocking Order). They put together the list of their recommended products to make up that 1,000# order. By trialing this out with a couple dealers in my territory, we found about 800# of those products wouldn’t sell and had to be returned. Needless to say, we didn’t take that concept any further.

Several areas of the country had gone out with the ISO program to all their customers. And just about everyone of them were returned. We guaranteed the return from our customers but our supplier had a no return policy. So, our fellow sales people in those locations had to somehow sell off dozens of those products that now clogged their warehouses.

We had failed in a small way with only a few dealers, which allowed us to recover fast and focus on those products that actually did sell.


Join us at Coach’s Corner every other week, where Greg Martinelli offers sales coaching tips for the Ag Sales Professional.

June 14, 2018 | Grain Hedge Insights | Cody Bills | Views: 396

Corn and Soybean Sales Beat Analyst Expectations

Recent decline in prices spurred on purchases

Corn and Soybean Sales Beat Analyst Expectations

Soybeans Make 10-Month Lows Following China Tension, Informa Estimate

Beans fell on the news that President Trump may slap China with additional tariffs as soon as this Friday and that the ZTE deal appears to have stalled.

Adding even more downward pressure, Informa estimates that soybean acres are up 500k to 89.902 million acres. They also estimate production to be 4.409 billion bushels; a record high. The July soybean traded as low as 931.25, the lowest since Aug 31, 2017. Nov beans touched 956.00 during yesterday’s session.

 

Ethanol Production Increases to One-Month High, Stockpiles Grow

Production is up by 0.012 from last week to 1.053 million barrels a day, the highest since May 11. This weeks production was up 5.1% over last year during the same week. Ethanol production is on pace to meet USDA expectations and now weekly production only needs to average 1% over LY to meet current USDA projections. Inventories rose to 22.174 million barrels, a high last seen on March 30.

 

Flood Warnings and Heat Advisories for Illinois-Missouri Border

Heat indexes of 105 deg F and high humidity are expected for counties on both sides of the Mississippi in Illinois and Missouri. Further East, there are flood warnings in effect following heavy rainfall that has pushed rivers over their banks. Eastern Iowa still has some flood warnings in effect and could expect small hail with the thunderstorms anticipated in the area later today.

Export Sales

This week’s corn and soybean sales beat analyst expectations as the recent decline in prices spurred on purchases. Soybean sales jumped sharply from last week with sales to Indonesia, Unknown Destinations, Egypt, Japan and Portugal.

 

 

   Actual

   Estimated

Last Week

Wheat-OC

   302.3

   150-450

250.9

Corn-OC

   936.4

   600-900

838.6

Corn-NC

   240.2

   200-400

418.3

Soybeans-OC

   519.6

   100-400

164.8

Soybeans-NC

   291

   100-400

34.7

Soymeal-OC

   74.6

    50-250

131.2

Soymeal-NC    

   23.3

     0-150

3.9

 

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

June 13, 2018 | Grain Hedge Insights | Cody Bills | Views: 531

USDA Report Shows Drawdown for Corn

Grains were down in overnight; July Soybeans lose almost 10 cents

USDA Report Shows Drawdown for Corn

USDA Report Shows Drawdown for Corn, Soybean Supplies

Good export numbers and strong demand worldwide were cited for old crop corn ending stocks falling 80 million bushels to 2.102 bbu and new crop down 105 mbu to 1.577 bbu. Old crop beans drew 25 mbu to 0.505 bbu and new crop ending stocks came in under expectations at 0.385, down 30 mbu from the May WASDE estimate. Old crop wheat had a build of 10 mbu to 1.080 bbu but new crop drew down 49 mbu to 0.946 bbu. Currently, corn, soybean, and wheat ending stocks are projected to fall by 25%, 23%, and 12% respectively.

Export Sales Announcements

Private exporters reported to the U.S. Department of Agriculture export sales of 177,000 metric tons of soybeans for delivery to unknown destinations. Of the total 5,000 metric tons is for delivery during the 2017/2018 marketing year and 172,000 metric tons is for delivery during the 2018/2019 marketing year.

EPA Head Pruitt Teases E15 During Midwest Tour

Pruitt told Midwestern farmers and politicians that the EPA has the authority to grant summertime E15 waivers. E15 sales during the summer is currently banned by the EPA due to concerns of potentially increased smog during peak driving season. Just last week, the White House scrapped plans to revise the Renewable Fuel Standard that would serve to aid oil refiners.

South American Corn Estimates In Line With Expectations, Brazilian Beans Surprise

Argentine corn production estimates remained unchanged from the May WASDE at 33 MMT and soybeans were reduced by 2 to 37 MMT, in-line with trader expectations. The Brazilian corn estimate was slashed by 2 MMT to 85 MMT but soybeans were increased by 2 MMT to 119 MMT which was on the high end of the analysts’ range.

 

The risk of trading futures, hedging, and speculating can be substantial.

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June 12, 2018 | Grain Hedge Insights | Cody Bills | Views: 295

Minor Dip in Crop Conditions

On Monday after the close, USDA pegged U.S. corn crop at 77% good-to-excellent

Minor Dip in Crop Conditions

USDA Shows Minor Dip in Crop Conditions

On Monday after the close, USDA pegged the U.S. corn crop at 77% good-to-excellent. That’s off slightly from last week’s reading of 78%. MO and SD continue to see falling conditions with MO down 11% on the week to 56% and SD off 7% to 63%.

Soybeans also saw a modest dip to 74% from 75% last week. MO & SD were again states where the condition scores deteriorated with 48% and 60% of the crop rated good-to-excellent, respectively.

The U.S. winter wheat harvest was 14% completed, up from 9% last week.

 

Export Sales Announcements

Private exporters reported to the U.S. Department of Agriculture export sales of 152,000 metric tons of corn for delivery to Mexico. Of the total 114,000 metric tons is for delivery during the 2017/2018 marketing year and 38,000 metric tons is for delivery during the 2018/2019 marketing year.

 

U.S. - North Korea Summit Ends

U.S. President Donald Trump and North Korean leader Kim Jong Un pledged to work toward complete denuclearisation of the Korean peninsula, while Washington committed to provide security guarantees. Details were sparse while the grins were broad from this historic meeting that left the world breathing a modest sign of relief.

While not directly linked to U.S.-China trade tensions, the broader market may take some solace in hoping this step of political normalization will have positive reverberations into trade issues.


Ukraine Wheat Crop

The UkrAgroConsult agriculture consultancy on Tuesday cut its forecast for Ukraine's 2018/19 crop year wheat by 3% to 25.5 MMT. That’s off from 26.5 by USDA in their May forecast. The Ukrainian state hydrometeorological centre said last week that drought in eastern and southern regions could shrink Ukraine's 2018 wheat harvest by 15-30 percent below original forecasts. UkrAgroConsult said drought could also affect late crops like corn noting that while current weather is not critical, that lack of timely rains could limit corn plantings as growers are expected to prefer sunflowers.


South Korea Feed Buyer Back for Corn

South Korea's Major Feedmill Group (MFG) purchased about 70,000 MT of corn to be sourced from optional origins in an international tender for up to 140,000 MT. Since June, South Korea feed buyers have bought 1 MMT in the global corn market.

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

June 11, 2018 | Grain Hedge Insights | Kevin McNew | Views: 455

G7 Summit Drama Complicates Trade Talks

Back and forth between Trump and Trudeau muddies the waters for tariff talk

G7 Summit Drama Complicates Trade Talks

G7 Summit in Quebec Results in Trade Turbulence

Trade tension, in the agricultural sector particularly, between the US and Canada served as the highlight of meeting of the world’s 7 largest economies.

Trump tweeted that American farmers have a “big and unfair price to pay” when it comes to exporting goods abroad.

Germany’s Angela Merkel plans on implementing tariffs in response to last week’s tariffs on Canadian and European steel and aluminum put in place by President Trump.

 

Russian Wheat Production Estimates Reduced By Prominent Consultants

IKAR lowered their total wheat estimate by 2 million metric tonnes to 71.5 MMT, citing cold, damp weather in Siberia, a major spring wheat producing area.

SovEcon cut their HRW by 800,000 MT to 54 MMT on news of inadequate moisture in the Black Sea growing region

Ending stocks of all Russian wheat remain high, pegged at 11.72 MMT according to the May USDA WASDE report.

 

Harvest Begins For Brazil’s Second Crop Corn

Harvesters have been out shelling corn in the Brazilian state of Mato Grosso, one of the top producing states in the country.

Yields have been reported to be around 99-102 bpa, as the earliest planted corn received the best moisture through the growing season. Yields are expected to fall as harvest progresses.

 

Commitment of Traders Report Shows Increased Selling For Corn and Beans, Silver Lining For HRW

In corn, money managers reduced their net long position by nearly 100,000 lots, bringing their net longs down to 78,696 contracts, as US crop conditions have been quite strong.

Soybeans fared no better as hedge funds took their net long position down by around 38,000 contracts to 65,177.

KC HRW saw managed money long positions increased by nearly 10,000 to 57,167, coming off of the news that Russian wheat production estimates were scaled back.

Chicago SRW had money managers increase their short positions by around 2700 lots to be net long with 23,058 contracts.

June 08, 2018 | Grain Hedge Insights | Kevin McNew | Views: 561

U.S. Corn Enjoys Discount Compared to South America

Transportation issues and poor production have increased costs for corn at Brazilian ports

U.S. Corn Enjoys Discount Compared to South America

South Koreans Continue Buying Spree

South Korea’s KOCOPIA bought about 60,000 MT of US corn this morning.

Yesterday, two groups from South Korea bought a combined 202,000 MT of optional origin corn and prior to that two other groups bought 192,000 MT. That brings the 7-day total to 452,000 MT.

Brazil’s export prices have surged 18 cents a bushel relative to US prices in recent weeks, with the Brazil port price trading at a 14-cent premium to US values. This time last year Brazil traded at a 32-cent per bushel discount to the US.

 

French Corn Crop Struggles

France’s corn crop is off to a bumpy start as excessive rain and hail have caused problems for the newly planted crop.

According to the state agency FranceAgrimer,77% of the crop is in good/excellent condition, a steep slide from last week’s reading of 84%. A series of storms since last May have brought torrential rain and hailstones to parts of France, causing localised flooding.

France produces about 25% of the EU’s corn crop with most of it being exported to other EU countries

 

 

Ukraine/Russia Crops Continue to get Downgraded

Ukraine’s wheat crop continues to struggle as the crop has received no meaningful rain since April and none is in the forecast for the next 7 days.

Severe drought in eastern and southern regions could shrink Ukraine's 2018 wheat harvest by 15-30 percent below original forecasts, the state hydrometeorological centre said on Friday.

Russian agriculture consultancy IKAR said on Friday it had downgraded its forecast for Russia's 2018 wheat crop to 71.5 MMT from 73.5 MMT previously.


 

The risk of trading futures, hedging, and speculating can be substantial.

FBN BR LLC (NFA ID: 0508695)

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