November 25, 2016 | Grain Hedge Insights | Kevin McNew | Views: 102

US Dollar Drifts Lower

Grains Were Closed Overnight

Grains were closed overnight but will reopen for trade at 8:30 am CDT. In outside markets, the USD drifted lower while crude oil was off in early trade and equities were higher.

 

Lower output of palm oil into early next year and tight supplies of rival soybean oil are likely to bolster prices for the tropical product in the short term after they hit a four-year high this week. Higher mandates for biodiesel production in the United States and Indonesia will further squeeze inventories of palm oil, used in products ranging from candy to cosmetics and cooking oil. Palm oil futures rallied 1% overnight and is up 5.7% on the week.

 

Russia's food safety watchdog said on Thursday it would have to introduce a quarantine that could hit agricultural exports if there were more outbreaks of African Swine Fever (ASF) at pork breeding facilities in the southern Krasnodar region. The watchdog said on its website a quarantine could affect, for example, grain exports. Analysts said this would be due to concerns ASF - a highly contagious hemorrhagic fever among pigs - could be transmitted via animal feed.

 

The dollar retreated against its major currency peers on Friday, a pullback in U.S. bond yields spurring some profit-taking as it headed for its best run in almost two years. Expectations of rises in U.S. inflation and interest rates have driven the greenback to a more than 6 percent gain over October and November, its strongest showing over a similar period since early 2015.
 

WEEKLY EXPORT SALES

 

                                                Actual         Expected

Corn                                          1,668         900-1,200

Soybeans                                   1,898      1,200-1,500

Wheat                                          712            350-550



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

November 23, 2016 | Grain Hedge Insights | Kevin McNew | Views: 121
November 22, 2016 | Grain Hedge Insights | Kevin McNew | Views: 130

Grains Mildly Lower in the Overnight

US Dollar in Positive

Grains were mildly lower overnight although prices in China continued to surge. The two-day gain for Chinese soy prices is +38 cents and soymeal up $14. In outside markets, bonds, equities and the US dollar were in positive territory while crude oil gave back some of the $2 a barrel gains from Monday.

 

USDA reported 30,000 MT of soybean oil to China.

 

Strong US exports and a robust demand from China sent soybean prices sharply higher on Monday. China’s October crush surged 24% year-on-year as the country continues to have a vigorous appetite for soybeans. China is said to be shopping for US beans to reduce shipping time from the US Gulf.

South African farmers are expected to bolster corn plantings by 35% over last year. South Africa's Crop Estimates Committee (CEC) is expected to forecast the planted area at 2.62 million hectares, 35% higher than 1.947 million hectares planted last year, according to an average estimate of five trading houses polled by Reuters. The CEC will announce the data on Thursday.

OPEC experts discussing how to implement a plan to cut oil output are likely to reach agreement later on Tuesday, a Nigerian delegate said, a possible sign of progress in finalizing the group's first supply-limiting deal since 2008. The key issue before the committee is how to implement a September agreement by the OPEC Countries to reduce production to between 32.5 million and 33 million barrels per day in an effort to prop up prices.
 

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


 

November 21, 2016 | Grain Hedge Insights | Kevin McNew | Views: 432
November 17, 2016 | Tech Talk | Charlie Trauger | Views: 472

Should We Fear Robots and Artificial Intelligence?

Charlie muses on the world of Artificial Intelligence and what it will mean for agriculture and the world

Should We Fear Robots and Artificial Intelligence?

This week I caught the latest Star Wars release on TV and was reminded from the first movie out in ’78, that robots like R2D2, C3PO and the new guy, BB-8 would be cool to have. The closest thing I have now is Siri and Cortana as they are at least called ‘bots’. I do use them both quite a bit to bark in appointments and reminders. It’s almost like the old days when we had assistants that would help schedule our day and keep us on time and tasks, but the ‘bots’ only recognize a few words, and then call up an agent to do the task. They don’t really understand us like our assistants did (in some ways that might not be bad). But, things are changing in the world of artificial intelligence.

You know things are progressing quickly in the agricultural arena as Case-IH recently unveiled their self-driving tractor at the Farm Progress Show. They are billed as “The Terminators of the agricultural world” by Luke Dormehl in this article on Digital Trends. The front even looks a bit mean and menacing to me. 

In other areas outside of ag, Facebook for instance has spent a lot of money on developing “bots” with over 33,000 currently that allow payments on messenger, help companies with the automation of back-office conversations, all eliminating jobs. With 6% of jobs possibly being eliminated in the next 5 years projected, change is coming per this article on CNBC recently.

We already have automatic palletizers and other machines that allow us to find something less strenuous and more strategic for our employees. But the new bot technology could end up replacing customer service, trucking and potentially other areas. Plus, it is hitting Wall Street as well with projections that there will be anywhere from 20 to 50% less data analysts needed in the future. It makes me wonder if the picture below will be what all of our businesses will look like in the future.

 

Guess we all should start learning how to write code, but then I am sure someone will create a bot for that also. Just speak into the mic and out pops a software application. I hope this does not end with a computer named ‘Hal’. I am not really worried, after all when I was a bond trader in the 80’s working at a bank, we all thought ATM’s would replace tellers. I see more bricks and mortar in the banking world than ever.

This new technology could end up being good for those of us living and working in rural America. It is hard to get and keep young people in smaller communities, but then I doubt robots will pay taxes and contribute to society by volunteering, etc. Or perhaps they will. Something worth keeping an eye on. 

November 17, 2016 | Grain Hedge Insights | Kevin McNew | Views: 142

Grains In Positive Territory Overnight

Crude Oil up in Morning Trade

Grains were in positive territory overnight as they continue to seesaw back and forth around long-term prices of the past 3 months. In outside markets, the US dollar was finally weaker after hitting a 13-year high yesterday and crude oil was up in morning trade.

 

USDA reported a 106,200 MT of corn were sold to unknown destinations.

 

EU farmers are expected to sow 24.3 million hectares of soft wheat for next year's harvest, little changed from 24.2 million in 2016, consultancy Strategie Grains said on Thursday. For the 2016 crop, they shaved the corn estimate from 59.8 MMT to 59.6, and the wheat crop estimate from 135.9 to 135.7.

South Korea's largest animal feed maker Nonghyup Feed Inc. (NOFI) purchased 68,000 tonnes of yellow corn to be sourced from optional origins

Japan bought 136,000 MT of which 101,000 MT was sourced from US origins and the rest from Canada.


 

WEEKLY EXPORT SALES-

                                       Actual      Expected

Corn                                 1,661      900-1,200

Soybeans                          1,418   1,200-1,500

Wheat                                 598         400-600

 

Weekly USDA export sales were above expectations for corn and at the high end of expectations for soybeans and wheat.


 

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

November 16, 2016 | Grain Hedge Insights | Kevin McNew | Views: 392
November 16, 2016 | Grain Hedge Insights | Kevin McNew | Views: 131

US Dollar Index Continues to Hold on to 13-Month Highs

Grains continue their move into positive territory

Overnight saw a continuation of Tuesday’s move with grains in positive territory going into the break. Crude oil, after gaining $2.50 a barrel on Tuesday turned lower this morning as did equity futures. The USD index continues to hold on to 13-month highs.

 

USDA reported a 165,000 MT of soybeans were sold to China.

 

On Monday NOPA soy crush numbers came in much bigger than expected with a monthly October crush of 164.6 MB, well above the average analyst estimate of 160.5 MB. However, bean oil stocks were also slightly higher at 1.343 billion pounds versus expectations of 1.323 billion.

 

In overnight news, Algeria bought 40,000 MT of optional-origin wheat. A feed group from Taiwan bought 65,000 MT of corn, thought likely to be sourced from the US.

 

Export values for corn held up well this week as Argentina and Europe corn prices strengthen relative to US values. However, soybean prices in Brazil and Argentina turned sharply lower relative to US values this week which could hamper US competitiveness.

 

 

Oil prices shed more than one percent on Wednesday, returning some of the gains made in one of the year's biggest rallies a day earlier, after weekly U.S. crude stocks rose beyond expectations and a strong dollar weighed on commodities. Weekly U.S. crude oil stocks surged by 3.6 million barrels last week, the American Petroleum Institute (API) industry group said, exceeding analyst expectations of a 1.5-million-barrel rise. Official EIA data is to be released at 9:30 am CDT and is expected to show a 1.48 million barrel build.

 

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

November 15, 2016 | Kevin McNew | Views: 173
November 15, 2016 | Grain Hedge Insights | Kevin McNew | Views: 137

Grains Posted Modest Gains in Overnight Session

US Dollar in Positive Territory

Grains posted modest gains overnight while crude oil was sharply higher. The US Dollar was in positive territory holding on to 13-month highs.

 

USDA announced two soybean sales this morning totaling 247,500 MT.

 

On Monday USDA pegged the corn and soybean harvest nearly complete with 94% and 97% harvested, respectively. Winter wheat ratings inched higher hitting 59% good-to-excellent versus 58% last week and 52% last year.

 

Curbs on speculation in Chinese markets continued to take their toll as Chinese soybean prices fell 4.4% overnight after falling 5% on Monday. Chinese investors renewed their push into commodity futures this month and increased their bets shortly after Republican Donald Trump's shocking U.S. presidential win on Nov. 8 amid a sell-off in global markets.

 

Japan was in the market to buy wheat in a usual tender that is generally done 3 times a month. Later this morning NOPA will release its October crush figures with analysts looking for 160.5 MB. Estimates range from 18.3 to 163.1. The report will be released at 11 am CDT.

In South America, moisture continues to improve for N. Brazil over the next 2 weeks while it tends to drier conditions in C. Brazil. Rains should be limited next 10 days in wet SW 1/4 of Arg./far S. Brazil, but wetter trends in 11-15 day. Argentina corn/soy seeding to remain slow to recover in SW but move along well elsewhere.

 

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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