July 18, 2016 | Grain Hedge Insights | Kevin McNew | Views: 196

Crude Oil Starts the Week Lower

Crop conditions to be released today; after the market closes.

Grains traded both side of unchanged overnight but came into the morning break with losses, especially for soybeans.  In outside markets, crude oil started the week lower while equity and bond futures posted modest gains.

 

Weather for the 2nd half of the month looks to be hot and wet which gave the soybean market a reason to head lower. After a cooler than normal first half of July, Corn Belt temperatures will heat up later this week to average 6 to 9 degrees hotter than normal and much of the rest of the nation will also be hot. New GFS maps have the next 16 days with widespread storms east of the Mississippi, limited moisture and some heat across the WCB and N Plains and very limited storminess and excessively hot and dry over the S Plains.

 

NOPA June crush came in at 145.05 mb compared to trade est. of 155.4 and May’s crush of 152.82. The avg. daily rate of crush was 4.84 mb which is the lowest rate of the year, just below the Jan rate of 4.85 mb. Oil stocks were 1.985 bln lbs vs. 1.994 in May. Meal exports were 594 tst vs. 682 in May.

 

Crop conditions will be released later today after the market close. Crops should show a deterioration in SD, NE, MI, OH and IN while rains benefited crops in ND, MN, KS, much of MO, and good portions of IL, IN and WI.

 

Oil prices fell on Monday as traders shrugged off the impact of the attempted coup in Turkey and the market turned its attention to bearish fundamentals, while disruptions to crude exports in Libya lent prices some support. A report by Morgan Stanley raised concerns about the longer-term outlook for oil consumption as demand for petrochemicals rather than fuels such as diesel and gasoline is clouding the outlook for crude demand.

 

In export news, Egypt is in the market for wheat although the US is likely not to garner the business as last week’s deals to Egypt went to Ukraine and Russia.

 

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

July 15, 2016 | Grain Hedge Insights | Jackie Roembke | Views: 325

Weekly Cash Comments

Weekly Cash Commentary for week ending 07/15/2016

On average, national basis was lower this week with corn off 2 cents a bushel and soybeans lost almost 3.5 cents per bushel.

 

Even with strong exports this week, corn river basis was off the most this week, losing 7 ¾ cents per bushel. However, corn barge basis has moved up 10 cents in the last two days which could indicate expectations for continued export strength. Ethanol plant basis was lower as well, off almost 3 cents per bushel.

 

Soybean crush facilities were off almost 4 ½ cents this week, losing all of last week’s gains. Along the river, soybean terminals lost 1 ½ cents. Soybean barge basis was down as well, off 11 cents, potentially following the drop in exports this week. 

 

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

July 15, 2016 | Grain Hedge Insights | Kevin McNew | Views: 164

Grains Edge up in the Overnight Session

Crude futures dipped towards $47 a barrel on Friday

Grains edged up overnight. Soybeans moved up slightly after a major slide in yesterdays session.Corn gained 0.7 percent while wheat gained more than one percent.

 

U.S. Soybeans fell 3.8 percent on Thursday, giving up early gains after new weather forecasts boosted expectations of a robust harvest in the U.S. Additionally wheat and corn closed lower.

 

China’s first soybean auction of the year was off to a flying start with 99.7 percent of what was offered being sold. Additionally, in the second quarter, China’s GDP rose 6.7 percent from a year earlier. Resulting in slightly better number than what economists were expecting.

 

Exporters sold 320,000 MMT of US soybeans to unknown destinations for a 2016/2017 delivery.

 

The weather outlook over the weekend and into early next week is calling for rain from the northeast to the southwest across the corn belt. Favored areas include a good portion of the Dakotas, central Nebraska, northeast Iowa,southern Minnesota, southern Wisconsin, northern Illinois, and northern Indiana. The additional showers and lack of notable heat will continue to provide very good pollination conditions through the first half of the week in the corn belt.    

 

Crude futures dipped toward $47 a barrel on Friday on concerns that a persistent global glut of crude oil and refined products will impede any price recovery. While the price collapse over the past two years has led to a sharp drop in global oil production, stored inventories remain at high levels, particularly for refined products, weighing on a recovery in prices.

 

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


 

July 14, 2016 | Grain Hedge Insights | Kevin McNew | Views: 247

Crude Oil Recovers

Grains trade higher in the overnight session.

Grains traded higher yet again in the overnight session. Corn was up 10 cents, soybeans up 12, and wheat up 5.

 

In world news, China is scheduled to auction around 300,000 tonnes of soybeans from its temporary reserve on Friday, a move that analysts think may help ease tight domestic supplies of the oilseed. China has not revealed the size of its reserves but it is thought to hold about 5 million tonnes of soybeans in its temporary reserve, said Liang Yong, an analyst at Galaxy Futures.

 

Crude prices recovered more than a dollar a barrel  from sharp losses that took place this Thursday. Brokers said the downtrend could be expected to resume given a worry over slowing economic growth along with record highs in stocks.  

 

Exceptionally hot (10°F to 15°F above normal) and dry weather begins early next week in the Midwest US, continuing through the end of July; some indication that ridge pulls back towards the Rockies in early August, offering potentially cooler/wetter weather for the eastern Soybean Belt but uncertainty remains high.

 

A U.S. government weather forecaster said the La Nina weather phenomenon will likely develop during August through October of 2016. The climate prediction center, an agency of the national weather service said in its monthly forecast there is a 55% to 60% chance that the La Nina weather phenomenon will develop during the fall and winter of 2016/20/17

 

Wheat exports came in below expectations with old crop at 318,000 tonnes and new crop at 397,000 tonnes. Corn exports were above expectations with old crop netting 667,800 and new crop at 772,500. Soybeans exports were at the low end of expectations with old crop at 364,200 and new crop at 429,000.

 

Gold gained for the first  time in five sessions, resulting from a recent rally for U.S. stocks that took a slight pause.

 

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

July 13, 2016 | Grain Hedge Insights | Kevin McNew | Views: 193

WASDE Report Showed Expected Numbers

Grains were up in the Overnight Session

Corn, soybeans, and wheat were higher following the overnight. Corn up 11 cents and soybeans up 26 cents, moving off of yesterday’s momentum. Wheat was up 6 cents.   

 

The WASDE report that came out yesterday at 11:00 am CDT reported corn old crop 1,701 and new crop 2,081. Soybeans old crop was reported at 350 and new crop was 290, and wheat new crop was reported at 1,105. Overall fairly consistent numbers with the predicted outcome.Investors continue to follow the weather outlook and remain hesitant. The USDA slashed its outlook for global inventories by the end of the 2016-17 crop year and forecast a spike in U.S. exports to a four-year high.

 

Reports of a hot and dry forecast have raised fear of damages to crops. NOAA’s 8-14 day temperature outlook shows much of the Midwest at risk for higher temperatures.

Showers expected to continue around the Great Lakes area into tomorrow. Weekend rains are predicted to favor the central Midwest. Looking at the rest of the week, high projections are peaking in the low nineties in the north/eastern Midwest. Along with projected highs of mid-nineties or better central southwest. The 16 to 30 day forecast is forecasting near to above normal temperatures, posing the warmest/driest risk for the northeast and areas in the deep south.

 

Russia’s head weather forecaster, Hydromet Centre, reported that Russia’s favorable weather could result in the largest grain crop since in post-Soviet history. They are expected to harvest 110 millions tonnes of grain this year, up two million from tonnes from the record crop of 2008 according to the agricultural ministry.

 

Egypt’s FAO report show that ergot is not a threat to the wheat crop. "Because the fungus is not able to settle in Egypt, it's not possible for it to spread and therefore it cannot cause economic losses, which makes it unnecessary to take preventative measures," part of the FAO report sent by the ministry said.

 

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

July 12, 2016 | Grain Hedge Insights | Kevin McNew | Views: 185

Grains Steady in the Overnight

USDA Crop Report to be released today at 11 CDT

Grains were steady overnight as hesitant investors await the monthly crop production report which will be released at 11:00 AM CDT today. Soybeans gave up gains over concerns of hot weather forecasts and expectations that the U.S. Department of Agriculture will decrease the U.S. soy stocks number.

 

Overnight, the Ukrainian agriculture ministry claimed that it expects Ukraine to export 35.33 million tonnes of grain in the 2016/17 season. A much larger number than the previously reported 11.64 million tonnes. The ministry and traders are expected to sign a memorandum on grain export volumes for the next season soon.

 

Rain is expected in much of corn the corn belt through next week. The 16-30 day forecast is showing a return of showers to the western part of the Midwest. Temperature high’s are expected to start creeping back into the 90’s across the corn belt. Low 100’s possible in Nebraska, Kansas, and southern South Dakota. Rainfall is expected ahead of the heat which should help limit the stress on in the far western area along with the great lakes area.

 

Crop conditions were released yesterday afternoon. Corn being reported to be up 1% at 76% good to excellent compared to 69% last year. The crop is 32% silking versus the 26% average. Soybeans also saw an increase of 1% at 71% good to excellent. At this time last year soybeans were 62% good-to-excellent. Crop is 7% setting pods versus the 5% average. Spring wheat is down 2% at 70% good-to-excellent. Last year spring wheat was 71% good-to-excellent. Winter wheat is 66% harvested versus the 65% average.

 

Yesterday, oil prices fell to a two-month low on reduced fears of oversupply. However, in the overnight, prices were seen to bounce back. Saudi Energy Minister Khalid al-Falih said there is still an excess of stocks in the market and it might take a long time to reduce the inventory overhang.

 

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

July 11, 2016 | Grain Hedge Insights | Kevin McNew | Views: 253

Grains Start the Week in Positive Territory

Crude Oil is Modestly Lower

Grains started the week in positive territory as weather forecasts show more heat and dryness for the 2nd half of July. In outside markets, equities continue to move higher following Friday’s sharp advances while crude oil is modestly lower.

 

Weekend rains were about as expected with the northern plains getting rains that missed much of the Dakotas and left Minn with a good drink. Rains across the south were less general and scattered.The GFS model has been predicting heat for the last half of July—more extreme than other models with the ridge of heat moving east over the corn belt. NOAA does not have much above temps but it is hot enough that night time temps do not cool off enough to allow the corn plant to rest and regain strength.

 

Export business was active to start the week. A South Korea feed mill purchased 25,000 MT of US wheat while Jordan and Algeria were tendering for 100,000 and 50,000 MT of wheat overnight. South Korea feed buyers were also active late last week on deals to secure more corn.

 

On Friday, industry group Baker Hughes Inc. reported that the number rigs looking for oil in the U.S. rose by 10, the fifth increase in the past six weeks, bringing the total rig count to 351. After peaking at 1,609 in October 2014, low oil prices put a downward pressure and the rig count fell sharply.

 

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

July 08, 2016 | Grain Hedge Insights | Kevin McNew | Views: 470

Weekly Cash Comments

Weekly Cash Commentary for week ending 07/08/2016

Overall corn and soybean basis was on the rise this week with ethanol basis leading the run higher.

 

Even with lower productions numbers we saw a 6 cent increase in ethanol basis to close the week. Corn along the river followed closely behind gaining 3 cents per bushel Potentially following lower export expectations from foreign exporters. Overall we saw a national increase of 4 cents per bushel.

 

Soybean river basis was the leader in the bean market this week gaining almost 5 cents per bushel. Higher weekly old crop exports could have led to stronger demand along the river. Nationally soybeans gained 1 cent per bushel. Crush facilities were in lockstep closing 1 cent higher as well.

 

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


 

July 07, 2016 | Grain Hedge Insights | Kevin McNew | Views: 315
July 07, 2016 | Grain Hedge Insights | Kevin McNew | Views: 339

Soybeans Turned Lower Overnight

Crude Oil advances for 2nd day in a row

Soybeans Turned Lower Overnight

Soybeans turned lower overnight while corn and wheat were firmly in positive territory to start the trade day. In outside markets, crude oil advanced for the 2nd day in a row.

 

Grain prices found some support heading into the morning break thanks to new production estimates from Conab on Brazil’s production. Official government forecasts pegged the corn crop there at 69.1 MMT, off from a previous estimate of 76.2 MMT while soybean production was shaved from 95.6 to 95.3 MMT.

 

Weather overnight showed rains in NE/SD of 0.5 to 1.0 inches while southern IN/IL also received beneficial rains. Showers into Friday will favor Kansas, Missouri, eastern Iowa, southeast Minnesota, southwest Wisconsin, northern Illinois, and northern Indiana. This will leave a few spots in south-central Nebraska, west-central Illinois, Michigan, northern Ohio, and the eastern Dakotas (10 to 15% of the Midwest) most likely to see moisture stress.

 

In the 6 to 10 day forecast rains will cover much of the Midwest, while 11 to 15 day rains favor the upper Midwest and may trim back dry spots in North Dakota and around the Great Lakes. Warmer temperatures return in the 6 to 15 day for the Midwest, including a warmer 11 to 15 day trend versus yesterday. However, this still limits mid 90s to mainly Missouri/Kansas/Nebraska and leaves most of the Midwest with peak highs in the upper 80s to low 90s. The lack of more severe heat will limit concerns for pollinating corn, although warmer/drier conditions in the 16 to 30 day for the northeast 1/4 of the belt could still allow some stress

 

Crude inventories fell by 6.7 million barrels in the week to July 1 to 520.9 million, compared with analysts' expectations for a decrease of 2.3 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 80,000 barrels, American Petroleum Institute said.

 

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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