April 17, 2018 | Grain Hedge Insights | Kevin McNew | Views: 319

Grains Firm in the Overnight

May Soybeans Up Five Cents This Morning

Headlines

Grains firm in the overnight. Planting pace is lagging but no alarms yet. Record soybean crush in month of March. Export Inspections within trade expectations.

Crop Progress

U.S. Corn planting is 3% complete vs five-year average of 5% complete. Spring storm has dumped snow across the Dakotas and upper Midwest delaying prospects for fieldwork and increasing the possibility for significant planting delays in the region. The cold temperatures throughout the Midwest, Plains and Delta will keep soil temperatures below 50 degrees through the weekend. Missouri, Tennessee and Kansas lag behind normal planting pace. Missouri corn planting is 4% complete vs.18% 5 YR Average. Kansas corn planting is 6% complete vs 15% 5 YR Average. Tennessee corn planting is 11% complete vs 16% 5 YR Average.

KCBT Winter Wheat

Winter wheat conditions showed 31% of the crop was rated good-to-excellent which was up 1% from last week. Winter wheat rated poor-to-very poor increased to 37% from 35% LW. Winter wheat is now 9% headed vs a five year average of 10% at this time.  

Rains are forecast to bring central and southern plains precipitation starting Friday and continuing through the weekend. However, the recent weather models have scaled back total precipitation amounts and reduced confidence in the placement.  Precipitation will be beneficial to KCBT wheat, but traders will be left guessing if event will improve or only stabilize crop conditions.

NOPA Crush Report

National Oilseed Processors Association reported a record soybean crush for the Month of March with 171.858 million bushels crushed vs. expectations of 168.247 million bushels. Soyoil stocks were reported at 1.946 billion lbs which was below trade estimates of 1.962 billion lbs.     

Export Inspections

Corn, soybeans and wheat inspections were within trade expectations this week.

 

Actual

Expectations

Wheat

483

200-500

Corn

1,504

1,100-1,600

Soybeans

444

300-600

*Thousand Metric Tons

 

China Announces Deposit Requirement on U.S. Sorghum

China Commerce Ministry reported a new deposit requirement by importers of U.S. Sorghum. Importers must make a deposit of 178.6% percent as a result of the probe on U.S. sorghum. China reported that they will continue to investigate U.S. Sorghum to make a final ruling. CHS, Planter’s Grain Co-Operative and J&C Farms were among some of the companies affected by the new deposit requirement.  

 

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April 16, 2018 | Grain Hedge Insights | Kevin McNew | Views: 336

Weekend Storm Brings Rain into the North Central Plains

Grains Mixed in the Overnight

Headlines

Grains mixed in the overnight.  Wheat lower on improved moisture prospects.  Weekend storm brings snow to north central plains

 

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Weekend Storm

A weekend storm brought 8-16 inches into the north central plains this weekend. The storm also brought 1-3” of rains to the eastern Midwest and Delta. Temperatures dropped into the teens following the storm as far south as Southern Kansas. The potential for freeze damage in southwest Kansas to wheat in the jointing stage has been overshadowed this morning by the forecast for more moisture over the weekend.   

 

Winter Wheat to Receive Rain

The forecast shows meaningful precipitation will move into the central and southwestern plains starting late this week and into the weekend. The 6-10 day weather outlook improves moisture outlook.  The precipitation will benefit the winter wheat crop and bring moisture to the drought stricken regions of the winter wheat belt.

Argentina

Buenos Aires Grains Exchange reported Soybean harvest is 23% complete and corn harvest is 24% complete as of the 11th. Showers over the weekend were mostly in Santa Fe and eastern Cordoba. More showers are expected by later this week slowing dry-down and delaying harvest minimally.

 

Brazil Weather

Precipitation continues to benefit 2nd crop corn in the northern and eastern regions of Brazil. Dryness is developing in Mato Grosso do Sul, Parana and Sao Paulo. Temperatures are expected to increase next week which could add stress to the southern corn region.  

 

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April 13, 2018 | Grain Hedge Insights | Kevin McNew | Views: 371

Weekly Cash Comments

Weekly Cash Commentary for week ending 04/13/2018

Basis levels firmed by 1.9 cents a bushel on beans across the US this week while corn was up marginally on a 0.3 cent improvement.

High water along the rivers continues to escalate barge rates. This week saw barge rates take another step higher, with rates trading at 40 cents a bushel more than normal at this time of year and near the harvest-time peaks we normally see in the fall. Both corn and soy basis was off about 5 cents a bushel at river terminals this week, in spite of strong Gulf gains of 10 and 20 cents a bushel for corn and beans, respectively.

 

For soybeans, they got some relief as crush facilities were higher on the week, bolstering their basis by 3.2 cents a bushel on average. 40% of the plants had a nickel to dime improvement on the week. Strong crush margins should be the norm for the next 6 months which should keep soy plants bidding aggressively for beans. As for corn plants, they improved by 0.8 cents a bushel. Gains by NE ethanol plants were 2 cents a bushel but ECB states of IN/OH saw more limited gains of only 1-cent a bushel.

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April 13, 2018 | Grain Hedge Insights | Kevin McNew | Views: 411

Snow to Hit Upper Midwest through the Weekend

Grains are Down This Morning

China Soy Imports Falter

China's soybean imports fell 10% in March from a year ago. March imports of 5.66 MMT were down from last year's 6.33, but up slightly from last month's 5.42, according to customs data. Imports are expected to increase in coming months as China normally turns to Brazil beans at this point in the season.

 

Thursday’s Trump Policy Musings

President Trump said on Thursday his administration may allow the sale of gasoline containing 15% ethanol year-round, which could help farmers by firing up corn demand but faces opposition from Big Oil. Trump administration continues to jockey between oil and corn constituencies as they clash over the nation's bio-fuels policy.  President Trump has directed his top trade and economic advisers to take a fresh look at the Trans-Pacific Partnership (TPP) trade agreement he withdrew from in his first week in office. He said he's going to deputize (National Economic Council Chairman) Larry Kudlow and (US Trade Representative) Robert Lighthizer to look at re-entering the TPP negotiations and to take another look at whether or not a better deal could be negotiated.

 

US Weather

Days 1-5: Snows to hit Upper Midwest (Dakotas & Minnesota) through the weekend, while rounds of rain and thunderstorms in the Midwest/Delta. Planting progress is unlikely to proceed through next week as a result. Frost/freeze expected in S Plains. Temps in the 20s for KS, and sub-freezing temps will stretch into much of OK.

Days 6-10: Colder than normal temps dominate the north central U.S. with a moderate brand of cold across the Midwest. Limited precip over the next 10 days for southern Plains’ Hard Red Winter (HRW) wheat crop. Although, overnight model guidance (both GFS & EC) has begun to place a rainfall event somewhere in the vicinity of 20-22 April that could bring rain and thunderstorms to the southern Plains.

Days 11-15: Temps could moderate back to near normal with the very cold anomalies fading away. This should, on its own, be beneficial for plantings which typically begin to ramp up in parts of the southern Midwest by the end of the month. However, precip could be active during this time frame, which could be unfavorable from a planting standpoint. However, model guidance out through this time frame can be highly variable.

French Crops Lagging

Corn sowing is under way, with 1% of the expected area sown by April 9 vs 23% a year earlier. FranceAgriMer estimates 78% of French soft wheat in good/excellent condition, unchanged vs week earlier but below the 89% rating last year.
 

 

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April 12, 2018 | Grain Hedge Insights | Kevin McNew | Views: 398

Strong Soybean Export Sales

Corn and Soybeans Up This Morning

Headlines

Strong soybean exports sales. Ethanol production held steady while stocks continue to decline. Argentina purchases US soybeans for the 2nd time this week.

Ethanol Production

Ethanol production declined last week to 1.034 million barrels from 1.038 million barrels. Weekly production was 4.9% above LY. Ethanol production dipped LY through May which means if weekly production holds steady over the next two months we will be back on track to meet the current corn used for ethanol estimate of 5.575 billion bushels. Ethanol stocks declined again this week to 918 million gallons from 942 million gallons LW. Over the last four weeks we have seen a 10% decline in ethanol stocks which is the largest on record over a four week period.

Argentina Purchases U.S. Soybeans

Argentina purchased 120,000 MT of 18/19 soybeans from the U.S. on Wednesday. Argentina made a similar purchase on Tuesday. These sales will show up in next weeks export sales report. The buyer was oilseed processor Vicentin SAIC and shows the impact of the drought in Argentina. These purchases represent the largest imports to Argentina from the U.S. in 20 years and it is likely there will be more to come.  

 

Weekly Export Sales

Soybean sales beat expectations and were up 74% from the four week average. China accounted for 254,700 MT while unknown destinations accounted for 665,800 MT.  Egypt, Mexico and Taiwan were also present on the buyer list. Soybean exports were only 419,700 MT which was a marketing year low. Corn sales and wheat sales missed expectations. Both corn and wheat sales were 46% below the four week average.

 

 

Actual

Estimated

Wheat

120

150-350

Corn

839

900-1,400

Soybeans

1,510

900-1,400

 

Ukraine Planting Underway

Planting in Ukraine was reported to be 23% complete. Weather is forecast to be favorable for both spring and winter crops. This year 7.4 million hectares of spring grain is expected to be planted, up from 7.3 million hectares last year.

 

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April 11, 2018 | Grain Hedge Insights | Kevin McNew | Views: 475

Trump to Delay any Bio-Fuels Reform

Grains Mixed in the Overnight Session

Headlines

Soybeans higher in the overnight on lower world carry-out. Abiove increased Brazil production and export estimates. Trump to delay bio-fuel reform. Exporters sell 120,000 metric tons of Soybeans for delivery to Argentina during the 2018/2019 marketing year.-USDA Exporters sell 141,518 metric tons of Soybeans for delivery to Mexico during the 2018/2019 marketing year.-USDA

April WASDE Highlights

Global soybean carry-out was lower than expected with 90.8 MMT vs 92.9 MMT expected. Global wheat carry-out was larger than expected with 271.20 MMT vs 268.16 MMT expected.  Argentina soybean crop estimated at 40 MMT vs. 42.6MMT expected and down from 47 MMT in March. Argentina and Brazil corn production were both about .75MMT below trade expectations.  Little changed in U.S. corn, soybeans and wheat balance sheets.

Abiove Raises Soybean Estimates

Brazil industry trade group Abiove increased their soybean production forecast in Brazil to 117.4 MMT, up 2.4 percent from March. The group increased their export forecast for Brazil soybeans to 70.4 MMT up sharply from 68.1 MMT in 2017. Abiove expects the amount of soybeans crushed in Brazil to increase to 43.2 MMT.

Plains Forecast

The forecast shows an increased chance of precipitation in the central plains late in the 6-10 day, but forecast remains dry in southwestern plains. The latest forecast shows the chance of rain across much of the winter wheat belt, but confidence in the event remains low. Traders are still concerned about dryness in the region.

Brazil Forecast

Forecast is wetter in the 6-10 day forecast with most moisture focusing on the northern growing regions. Dryness is expected to lower soil moisture in southern and central growing region. The longer range forecast shows chances of below normal rainfall in the northern belt of 2nd crop corn for the month of May. There is potential for some crop stress, but rainfall throughout the rest of the belt should be mostly beneficial.  

Argentina Forecast

Showers forecast in 6-10 day forecast for Buenos Aires, Santa Fe and Entre Rios will slow corn and soybean dry-down and delay harvest.

Trump Administration to Delay Bio-fuel Policy Reform

Reuters reported this morning that Trump will delay any bio-fuels reform for about three months in an effort to shield the farming sector currently worried about the impacts of a looming trade war.  

 

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April 10, 2018 | Grain Hedge Insights | Kevin McNew | Views: 299

WASDE Report Scheduled for 11 AM CST

Grains Mixed to Down in the Overnight

Headlines

WASDE report scheduled for 11 AM CST. Wheat conditions decline from LW. Perdue says farmers will be protected. Exporters sell 120,000 MT of Soybeans for delivery to Argentina during the 2018/2019 marketing year.-USDA  Exporters sell 132,000 MT of Soybeans for delivery to China during the 2018/2019 marketing year.-USDA Exporters sell 279,000 MT of Soybeans for delivery to unknown destinations during the 2017/2018 marketing year.-USDA

 

April WASDE Report Expectations

Analysts are expecting corn, soybean and wheat ending stocks to increase from the March WASDE report.  Argentina soybean and corn production estimates are expected to be revised lower due to to unfavorable growing conditions.  Brazil soybean production expected to be revised higher.

 

Crop Conditions Report

Corn planting is 2% complete nationally. Missouri corn is only 1% complete compared to a four year avg. of 7% complete. Winter wheat rated 30% G/E, down from 32% LW. Winter wheat rated 35% P/VP, up from 31% LW.

 

Farmers will be protected by Trump

The Agriculture Secretary said on Monday that U.S. farmers will be protected by the Trump administration as rising trade tensions threaten the ag economy.  No details were given by Secretary Perdue, but White House spokeswoman Sarah Sanders said on Monday that the Trump Administration will present a plan shortly.

 

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April 09, 2018 | Grain Hedge Insights | Kevin McNew | Views: 479

US Grains and Stock Market Rally in Overnight Session

Midwest to Remain Cold

China Pushes Back on US Trade War

China said it would be impossible to negotiate under “current circumstances”. The comments come after U.S. President Donald Trump on Sunday predicted China would take down its trade barriers, and expressed optimism that both sides could resolve the issue through talks. US grains and stock market rally loses steam overnight after initial optimism Sunday night begins to fade. Exporters sell 232,500 metric tons of Soybeans for delivery to unknown destinations during the 2017/2018 marketing year. -USDA

 

Global Soy Trade Realigning

World buyers are turning to US soybeans as Brazil prices soar. Friday brought fresh biz to the EU of 458,000 MT, one of the biggest deals to that part of the world in recent history. Brazil prices have been red-hot of late, elevating to a $2 per bu premium over the board last week before backing off late week to a $1.70 a bu premium.


 

Midwest Weather

Dry weather to continue in the Plains while the Midwest to remain cold. Heavy rains of 1 to 3 inches across much of the Delta over the weekend. Temperatures were quite cold over the weekend across the central U.S., but warmer weather is expected later this week. Another round of cold will return by the weekend, however, which will likely delay corn planting and germination. No improvement is expected in the Plains wheat areas over the next 10 days as dry weather continues.


 

Cold Snap Hits Wheat Belt

Temperatures plummeted across the Plains on Saturday morning, with lows ranging from the low to mid 20s across northwestern Texas to the single digits across far northern Kansas and Nebraska. Temperatures broke daily records across most of the Plains wheat areas, in some cases by very large margins. Temperatures were not quite cold enough across Texas to cause damage to the wheat crop, but some spotty damage was possible in western Oklahoma and portions of central and western Kansas, where some of the crop is beginning to joint and temperatures dropped into the teens.  Much warmer weather prevailed yesterday and damaging cold is not expected over the next 10 days.  
 

Tender Action Overnight

South Korea’s MFG Feed Group bought 125,000 MT of optional origin corn. Australia was the lowest offer for Iraq’s 50,000 MT wheat. US wheat was $30/MT higher than Aussie wheat.

 

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April 06, 2018 | Grain Hedge Insights | Kevin McNew | Views: 430

Grains Traded Sharply Lower in the Overnight Session

Weekend Precipitation to Favor KCBT Wheat Belt

Headlines

Trump directs U.S. trade officials to ID tariffs on $100 billion more Chinese imports. Argentina expecting rains this weekend and into next week. Cold temperatures across Mid U.S into next week. WASDE report next Tuesday. Exporters sell 458,000 MT of Soybeans for delivery to unknown destinations of which 327,00 MT is for 2017/2018 delivery and 131,000 MT is for 2018/2019 delivery.-USDA  Exporters sell 130,632 MT of Soybeans for delivery to Mexico of which 65,316 MT is for 2017/2018 delivery and 65,316 MT is for 2018/2019 delivery.-USDA Exporters sell 20,000 MT of Soybean Oil for delivery to unknown destinations during the 2017/2018 marketing year.-USDA Exporters sell 100,000 MT of Corn for delivery to Egypt during the 2017/2018 marketing year.-USDA

 

Trump calls for more tariffs

The market traded sharply lower in the overnight session after the White House directed U.S. trade officials to identify tariffs on $100 billion more Chinese imports. China announced it would counter U.S. protectionism “to the end, and at any cost,” in response. The Trump administration responded stated that China’s retaliation was “unfair”. In a statement on Thursday, Trump said “Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers.” He also stated that the U.S. is still open to discussions “in further support of our commitment to achieving free, fair and reciprocal trade and to protect the technology and intellectual property of American companies and American people.”  China formally launched a WTO challenge against Trump’s first round of proposed tariffs yesterday. The China commerce ministry is scheduled to hold a media briefing at 7AM CST.

 

USDA looking to protect farmers from trade war

The USDA is currently having discussions about ways to protect farmers from the fall-out of a trade war. Secretary Bill Northey stated that there are “a lot of good options out there” and that the USDA needs to “see the reaction of what tariffs will be and what the reaction of markets are”. There have been NO specific proposals yet.

Argentina

Rain is expected each day over the next week.  Rain is expected to impact central and southern production areas of Argentina over the weekend and into Tuesday. Rains will slow corn and soybean dry-down.

 

Plains Wheat

Weekend precipitation favoring southeastern KCBT wheat belt. Temperatures are expected to be colder than normal through Wednesday next week. Cold temperatures on Saturday could damage some plains winter wheat; but, damage is not expected to be major.    

 

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April 05, 2018 | Grain Hedge Insights | Kevin McNew | Views: 539

Grains Extend Rebound in the Overnight Session

Grains Up This Morning

Headlines

Grains extend rebound in the overnight. Soybean export sales beat expectations. Slow planting progress expected to continue in Delta/Deep south.

 

Weather

Plains wheat remains dry in western KS, southeastern CO, western OK and northwestern TX. Southeastern Plains is forecast to receive moisture in the 6-10 day outlook.  The Delta is expected to continue receiving moisture in the 6-10 day outlook which is expected to continue slowing planting progress.

 

Argentina

Showers and thunderstorms are expected today and into the weekend in central and southern production regions of Argentina. More showers are expected to start in southern Argentina and move north from Monday to Wednesday.

 

Brazil

China’s tariff announcement yesterday drove the Brazilian soybean premium 37% higher after already being at record levels during harvest. Brazil soybean harvest is 72% complete up from 65% last week. This is on par with the average harvest pace of 73% at this time. Brazil harvest of 1st crop corn is 60% complete, up 9% from last week and on par with the average harvest pace of 58%.

Ethanol

Ethanol production was mostly unchanged this week at 1.038 million barrels per day vs LW production of 1.039 mbpd. Production was 1.9 percent ahead of last year during the same week. Production needs to maintain 2.5 percent above last year to meet the USDA’s expectations. If production holds steady around these levels and doesn’t dip during the April May time period, ethanol production has a chance to get back on track to meet USDA’s corn used for ethanol estimates. Ethanol stocks slipped lower last week to 942 million gallons from 957 million gallons the previous week. Stocks are now below last years levels by 54 million gallons    

 

Export Sales

Corn and wheat missed analyst expectations, but soybean sales soared. Corn sales were down 34% from LW and down 50% from the four week average. Wheat sales were down 69 percent from LW and 63% from the four week average. Soybean sales increased from last week with strong sales to unknown destinations and 137,400 MT sold to China.

 

 

Actual

Estimated

Wheat

109

200-500

Corn

898

1,000-1,300

Soybeans

1,133

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)

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