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January 05, 2016 | Grain Hedge Insights | Kevin McNew | Views: 452

Overnight Trading Saw Grains Posting Advances

The US dollar index continued to rally overnight, up nearly half-a-percent in value.

Overnight trading saw grains posting advances as they tried to recover from Monday’s steep sell off. In outside markets, S&P futures were modestly lower while crude oil was mildly lower. The US dollar index continued to rally overnight, up nearly half-a-percent in value.

 

Yesterday saw new monthly usage data from USDA which showed subpar performances for both corn and soybean demand.  Corn used for milling in November was 484.5 MB, off from 494.2 MB in October, while soybean crushing for November was 165.8 MB versus 170.1 MB in October.  With soy crushing margins continuing to slide, future crush usage could be lower as well.

 

In international news, Zimbabwe plans to import up to 700,000 MT of corn this year to avert hunger as the El Nino weather pattern brings poor rains and affects crops in the Southern African nation, the state-owned Herald newspaper reported on Tuesday. Last year the government imported only 100,000 MT. The UkrAgroConsult consultancy raised its forecast for Ukraine's 2015/16 wheat exports to 14 MMT from 13 MMT on Tuesday citing a higher harvest and a fall in ending stocks.

 

Japan's Ministry of Agriculture is seeking to buy a total of 131,031 MT of food quality wheat from the United States, Canada and Australia in a regular tender that will close late on Thursday.  In wheat, yesterday’s steep price decline came with the largest daily increase in open interest in over a decade, as open positions grew an astonishing 25,000 contracts suggesting players were increasing their bets in the new year.

 

U.S. stock futures pared declines, while European equities resumed advances as equities sought to rebound from one of the worst starts to a year. The turbulence comes even after China moved to support its stock market with state-controlled funds buying equities and regulators signaling a selling ban on major investors will remain beyond this week’s expiration date, according to people familiar with the matter. A 7% slump in China shares on Monday triggered a trading halt, and the rout spread throughout Asia, Europe and the U.S. as a report showing the fastest contraction in U.S. manufacturing in six years.

 

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

January 04, 2016 | Grain Hedge Insights | Kevin McNew | Views: 648
January 04, 2016 | Grain Hedge Insights | Kevin McNew | Views: 483

Grains are Weak to Begin the New Year

S&P futures plunge lower

Grains were weaker to begin the New Year with beans leading to the downside, falling below $8.60 for the first time in two weeks.  In outside markets, S&P futures plunged lower giving up nearly 1.5% on the heels of a 7% drawdown in Chinese stocks and the US dollar fell by 0.5%. Crude oil was up slightly trying to bounce off of its recent lows.

 

Weather in Brazil was mostly favorable over the long holiday weekend and some areas of Northern Brazil received rains. However, the driest areas are expected to get the most rain in the coming days to weeks. The precipitation will be sufficient in the north through Friday of this week to improve topsoil moisture in most crop areas and to reduce concern over further declines in production potential.

 

In wheat, there was a cold snap over the weekend in parts of Russia and Ukraine with temperatures falling below zero Fahrenheit, but most areas of the wheat belt had at least some partial snow cover to insulate against crop damage. Overnight, buyers seemed eager to find wheat with three different wheat tenders announced:  Ethiopia tendering for 70,000 MT, Taiwan Flour Millers tendering for 88,750 MT of US wheat and South Korea's largest feed-maker tendering to purchase up to 60,000 MT of feed wheat.

 

In South Africa, drought-stricken corn growing areas saw some modest rains over the holiday with localized amounts reaching 0.5 inches. However, the overall drought conditions seem unlikely to reverse course and odds are high that this year’s production will be seriously slashed because of severe drought.  In other news, India will soon ask state-run traders to import 0.5 MMT of corn after a second straight drought cut output, in what would be the country's first overseas purchase in 16 years, two government sources said on Thursday. India has agreed to allow state-run traders such as PEC Ltd to import corn to curb rising prices and avoid shortages, said a government official directly involved in the decision-making process.

 

Stocks crumbled around the world, with emerging markets falling the most since August, as slowing manufacturing triggered a sell-off that halted equity trading in Shanghai. The Shanghai Index lost 6.9% overnight. The Caixin factory index for China came in at 48.2 in December, missing the median analyst estimate of 48.9 in a Bloomberg survey, after the nation’s first official economic report of 2016 on Jan. 1 signaled manufacturing weakened for a fifth month, the longest such streak since 2009.

 

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

December 31, 2015 | Grain Hedge Insights | Kevin McNew | Views: 634
December 31, 2015 | Grain Hedge Insights | Cody Bills | Views: 444

Barge Traffic All But Halted on The Mississippi

Grains were lower to mixed in the overnight session, while crude oil and S&P futures were lower and the US dollar higher in the night trade.

Markets close at regular time today, 1:20 pm CDT. The futures market is closed on Friday, Jan 1 and reopens Sunday, Jan 3 at 7:00 pm CDT

Grains were lower to mixed in the overnight session, while crude oil and S&P futures were lower and the US dollar higher in the night trade.

 

Much of the middle section of the Mississippi remained closed, including St. Louis' municipal harbor, officials said. Waters remained in moderate or major flood stages following heavy rain and snowfall earlier this week that all but halted barge traffic on the Mississippi and other rivers in the central United States. The Mississippi River at St. Louis was forecast to crest at the second-highest level ever on Thursday while river conditions could return to normal by late next week, government officials and barge traders said.

 

In South America, the weather forecast for the first half of January continues to suggest a surge in rain for Northern Brazil, which should ease dryness. The coming week is of critical importance and if the advertised 1.00 to 3.00 inches of rain fall across much of Brazil’s driest areas, as advertised, many crops will respond positively with a burst in more aggressive development. Early planted beans may find the precipitation coming too late since harvesting of the first crop often begins later in January and early February.

 

For wheat, Russia’s cold snap in winter wheat country is likely to be short-lived and is only hitting about 15% of the wheat crop. Yesterday, Jordan bought 100,000 MT of wheat.  The Rosario Grain Exchange puts the Argentine wheat harvest at 75% complete vs 88% this time last year.

 

In crude oil, fundamentals still point to oversupply. Crude inventories in the United States rose 2.6 million barrels last week, the U.S. Energy Information Administration said. Analysts polled by Reuters had expected a drawdown of 2.5 million barrels. Stockpiles hit record highs at the Cushing, Oklahoma delivery hub for U.S. crude's West Texas Intermediate (WTI) futures. Gasoline and heating oil also posted larger-than-expected stock builds.

 

WEEKLY EXPORT SALES

                                   Actual       Expected

Corn                               705          600-800

Soybeans                        578      1,000-1,400

Wheat                            363          250-450

 

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

December 30, 2015 | Grain Hedge Insights | Kevin McNew | Views: 602
December 30, 2015 | Grain Hedge Insights | Cody Bills | Views: 322

Grains Posted Modest Gains in The Overnight

Heavy weekend storms caused flooding in parts of the southern U.S. Midwest, threatening the region's soft red winter wheat crop

Grains posted modest gains overnight with soybeans and wheat posting a nearly 3 cent advance and corn was fractionally higher. Outside markets saw S&P futures and crude oil lower, while the US dollar firmed slightly in the night trade.

 

Argentina on Tuesday removed limits on how much corn and wheat the country's huge farm sector can export. This follows the new policies earlier in the month that eliminated export taxes on corn and wheat, which plunged Argentina’s corn export price to a 25-cent discount when compared to the US over the past two weeks. The export quotas had curbed corn and wheat planting and resulted in the overplanting of soy in recent years. The government has estimated that the country's grains production will grow to 130 MMT from the current 100 MMT.

 

In weather news, Brazil’s Northeast states of Bahia and northern Minas Gerais are the focus of concern were hot, dry conditions are limiting production potential. Light rain is expected in the region through the end of this week, and is expected to increase by the weekend into next week. The rain will slowly bolster soil moisture and ease some of the stress to crops. Rain totals for the seven day period ending next Tuesday morning will range from 0.75 to 2.50 inches with locally greater amounts. Moisture shortages will remain in most areas in northeastern Brazil by the beginning of next week. Even so, the remaining 95% of soy producing area in Brazil remains at or above adequate soil moisture.

 

Heavy weekend storms caused flooding in parts of the southern U.S. Midwest, threatening the region's soft red winter wheat crop, although the magnitude of the impact is expected to be limited. Concern was also mounting about potential crop damage in Russia. A forecast plunge in temperatures in parts of Russia could pose risks to winter grains after abnormally warm weather in recent weeks reduced the snow cover protecting them.

 

In crude, prices fell on the prospects of a short-lived cold spell through Europe and the US, which had provided some hopes of demand stimulus last week. Oil could draw support if U.S. Energy Information Administration data later on Wednesday shows a drawdown in U.S. weekly oil stocks. A Reuters poll of nine analysts estimated that crude stocks fell 2.5 million barrels in the week ended Dec. 25. The American Petroleum Institute, an industry group, on Tuesday reported a surprise build-up in U.S. stocks.

 

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

December 29, 2015 | Grain Hedge Insights | Kevin McNew | Views: 603
December 28, 2015 | Grain Hedge Insights | Kevin McNew | Views: 712
December 28, 2015 | Cody Bills | Views: 395

Weather In Brazil Weighs on Beans

Grains were mixed overnight with corn and wheat posting modest gains, while soybeans turned lower. In outside markets, S&P futures and crude oil were off as was the US dollar.

Last week’s USDA export sales showed strong sales for soybeans, coming in at 2.07 MMT more than double the amount expected by analysts which ranged from 0.9 to 1.1 MMT. Corn export sales were 803,600 MT versus 500-700,000 MT expected, while wheat came in at 370,300 MT versus expectations of 250-450,000 MT.

In weather news, South Africa reported a couple of locally heavy rain amounts during the long holiday weekend, but most of the precipitation was quite light and temperatures were at extreme highs for the corn crop there. South Africa rainfall this week is expected to be restricted with inadequate. Latest forecast model runs Sunday reduced rainfall in the second week with temperatures through Saturday varying in the 90s to 106 degrees Fahrenheit, creating a dismal outlook for summer crops across the nation.

In Brazil, northern Brazil which has been dry saw only spotty rainfall over the holiday and not enough to counter the 90 to 100 degree temps in the region. However, the region appears to have better rain prospects in the coming days. The greatest relief from dryness is expected Friday through January 6, although some increase in showers will occur through mid-week this week. Most of this week’s rain will be light and erratic, although greater than that of the holiday weekend and some easement from moisture stress will begin. The greatest relief from dryness is expected January 3-6, although there will be sufficient rain prior to that time for some improvement. In southern Brazil where it has been wet and cool, as temperatures are expected to increase in the forecast as rains leave the region and move northward.

Argentina’s soil moisture is still rated favorably in most of the summer crop region. The ground is saturated with moisture in the northeast and from southeastern Cordoba to northwestern Buenos Aires. A small pocket of east-central Buenos Aires was also reporting saturated topsoil conditions. Overall, most of Argentina crops will remain in favorable condition for the next couple of weeks with increasing soil moisture in the west and some gradual drying in the southeast.

In oil, the news continues to be bearish. Figures from the Organization of the Petroleum Exporting Countries imply a glut of more than 2 million barrels per day, equal to over 2 percent of world demand. Oversupply is expected to persist into the earlier part of next year. Saudi Arabia is expected to announce its 2016 state budget on Monday, and the details will be scrutinized for any indication that it may give about the likelihood of the kingdom changing its oil policy.

 

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

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Grains Weaker Overnight

April 27, 2016 | Grain Hedge Insights | Kevin McNew

Grains were weaker overnight but seemed to finding some pullback heading into the morning break. Meanwhile, crude oil continues to hit fresh highs on this rally, posting a $1 a barrel gains going into the day while equity futures were sharply lower.

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