March 30, 2017 | Kevin McNew | Views: 282
March 30, 2017 | Grain Hedge Insights | Kevin McNew | Views: 286

Grain Prices Continue their Stalemate

Weekly Export Sales Reported this Morning were Strong for Wheat

One day to go until USDA’s crop reports that are expected to breath new life in the markets. In the meantime, grain prices continue to be in a stalemate with a modest downward bias.

 

USDA reported the sale of 165,000 MT of soybeans to China

 

Overnight China’s corn futures fell for a 2nd day in a row fueled by talk that the state may release grain from its huge stockpiles earlier than planned and at a lower price.

 

Weekend rains in Argentina are expected to slow the corn and soy harvest there with some flooding in the Western areas. Lighter rains are expected there next week, but widespread issues to disrupt the harvest or cause yield losses are not expected. Brazil continues to see a dry spell helping move along soy harvest and timely rains are expected mid next week to aid the 2nd season safrinha crop.

Looking ahead to Friday’s Quarterly Stocks report, all eyes will be on corn stocks which are pegged to be 8.53 billion bushels with a wide range of estimates from 8.2-8.9. Implied corn feed use from this report will be widely watched and based on expectations for stocks, this would put feed use for Quarter 2 at 8% over the previous year’s mark. That would be a sharp jump from Q1 which was up 3.6% for the year. Keep in mind USDA has penciled in an 8.4% increase in feed use for the entire marketing year, so the bar is set high for the remainder of the year.

 

Weekly export sales reported by USDA this morning were strong for wheat and soybeans, but disappointing for corn.

 

Export Sales-

 

Actual

Estimated

Wheat - OC

464

250-450

Wheat - NC

164

50-200

Corn - OC

717

900-1,200

Corn - NC

125

100-300

Soybeans-OC

681

350-550

Soybeans-NC

316

100-300


 

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

March 29, 2017 | Kevin McNew | Views: 337
March 29, 2017 | Grain Hedge Insights | Kevin McNew | Views: 291

Trade Action Proves to be Listless Leading up to Friday’s Crop Report

US Dollar and Crude Oil Turns Higher

The recovery in ag grains entered Day 2 with little upside enthusiasm. In outside markets, US dollar crude oil and equities turning higher.

 

The weather forecasts proved true in the S Plains as 1.5 to 3.0 inches of rain rolled across the region yesterday and will finish up today. Another system is expected starting this weekend and extending into next week to bring more rains. Two additional slow-moving low systems are expected to come out of the southern Rockies and into the southern Plains and Midwest. These storm systems should have ample rainfall totals across core winter wheat and spring crop regions of the southern Plains & the Midwest into mid-April. Many of these areas are in need of precipitation, so this active pattern should benefit wheat as well as soils ahead of corn and soybean plantings.

 

The trade action in grains will likely be listless leading up to Friday’s crop report. polls are out on expectations for the March 31 planting report. On average, analysts look for corn acres of 90.9 million vs 94.0 last year and soy plantings of 88.2 as compared to 83.4 in 2016. All wheat acres in the US are expected to slip to 46.1 from 50.2 last year.

Oil World on Tuesday pegged Brazil’s soybean crop at 108.5 MMT of production and at least 61.4 MMT of soybean exports during 2017. These are slightly higher than USDA figures of 108.0 and 61.0, respectively.

 

Data on US crude oil inventories from government forecaster EIA will be widely watched this morning at 9:30 CDT. Analysts expect crude stocks to grow by 1.36 million barrels on the week. Last week, stocks ballooned 4.95 million barrels. API data from yesterday showed a 1.9 million barrel increase in stocks.

 

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

March 28, 2017 | Kevin McNew | Views: 344
March 28, 2017 | Grain Hedge Insights | Kevin McNew | Views: 300

Grains Posting a Modest Bounce This Morning

Crop Reports are Reporting on Winter Wheat

Grains were posting a modest bounce higher heading into the morning session. In outside markets, the US Dollar was also trying to recover from Monday’s losses while equities had some minor losses to start the day.

 

Crop reports from various state agencies were reporting on winter wheat ratings. In KS & TX, the wheat crop was rated at 38% and 34% good-to-excellent, respectively for the two states, unchanged from last year.  In OK, the crop ratings dipped to 37% from 40% last week. In North Dakota crop ratings are 79%, Montana 62% and South Dakota at 62%.

 

Overnight, India announced a 10 percent import tax on wheat, reinstating the tariff after a gap of nearly four months that saw large overseas purchases. The government wants to curb imports when Indian farmers are starting to harvest their crops. India, the world's second-biggest wheat producer, lowered the import tax wheat to 10% from 25% last September and scrapped the duty on December 8.

 

South Korea's largest animal feed maker Nonghyup Feed Inc. (NOFI) purchased around 55,000 tonnes of soymeal in a tender for the same volume on Tuesday to be sourced from South America. Algerian agency ONAB purchased about 25,000 tonnes of optional-origin corn in a tender, also likely to come from South America.


 

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

March 27, 2017 | Kevin McNew | Views: 360
March 27, 2017 | Grain Hedge Insights | Kevin McNew | Views: 277

US Dollar Slides to Fresh Lows

Grains Were Mostly Weaker in the Overnight

Grains were mostly weaker overnight with wheat and soybeans pushing to the downside while corn was trying to hold on to modest gains. In outside markets, the US dollar slid to fresh lows since November while equity futures were showing heavy losses going into the opening bell.

 

Palm oil hit a 5-month low and Chinese soybeans were down 27 cents a bushel in overnight trade weighing on the US bean complex this morning. The Korea Feed Association purchased around 55,000 MT of soymeal thought likely to be sourced from South America in a deal on Friday. Over the weekend, China lifted its ban on Brazil meat as did Egypt and Chile. The Brazilian government lobbied hard to get the ban removed citing the problems as isolated to a few bad plants.

 

Rains continued to be featured heavily in the Plains, Delta and Southern Midwest over the next 10 days which should help ease drought concerns. A rain system Tues-Thur of this week should hit much of OK/KS to help the winter wheat crop there.

Early polls are out on expectations for the March 31 planting report. On average, analysts look for corn acres of 90.9 million vs 94.0 last year and soy plantings of 88.2 as compared to 83.4 in 2016. All wheat acres in the US are expected to slip to 46.1 from 50.2 last year.

 

Financial markets were facing a wave of selling following Friday’s collapse of the healthcare reform bill. The failure by the new administration is causing a loss in confidence in other potential economic policy initiatives like tax reform and infrastructure spending to become enacted in the future.


 

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

March 24, 2017 | Grain Hedge Insights | Kevin McNew | Views: 285

Weekly Cash Comments

Weekly Cash Commentary for week ending 03/24/2017

Grain basis continued to show little upside life this week even with the ongoing slide in futures prices. For the week, spot corn basis across the country managed a 1.3 cent advance while soybean basis was up 0.8 cents a bushel.

 

WEEKLY BASIS CHANGES

 

CORN

SOYBEANS

US AVG

+1.3 C

+0.8 C

PROCESSOR

+1.6 C

+1.8 C

RIVER TERMINALS

-1.3 C

+0.2 C

 

Corn basis found some strength thanks to some modest strength at ethanol plants, which rose 1.6 cents on the week. Ethanol production continues to hold firm and is outpacing last year’s tally by 5%. At river terminals this week, basis levels dipped lower although export pace continues to be good with sales on the week of 1.3 MMT topping market expectations.

 

In soybeans, basis levels showed more upside at processors as crush margins improved this week as bean oil bucked the trend of lower soy and meal prices. River terminal basis was mostly flat but there was some notable weakness at IL river terminals.

 

 

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

March 24, 2017 | Grain Hedge Insights | Kevin McNew | Views: 310

Wheat Took a Break in the Overnight from its Recent Slide

Soybeans Continue to see Mounting Losses

Grains were mixed overnight as wheat took a break from its recent slide and inched higher while soybeans continued to see mounting losses, reaching their lowest mark since October.

 

Overnight, the Taiwan Flour Millers' Association purchased 98,200 MT of milling wheat to be sourced from the US in a tender which closed on Friday. Jordan was also in the market for 50,000 MT of hard red milling wheat. Grain industry lobby Coceral on Friday forecast that soft wheat production in the 28-country European Union would rise to 144.8 MMT this year from 135.1 in 2016.

 

The US weather forecast continues to show good chances of rain in the drought-stricken areas of the Southern Plains. However, the latest model guidance for the 15-day total shows moisture levels that are slightly lower in key states than was previously projected. The bulk of the rain is expected next Wed/Thu and then another system on the following Sat/Sun.

 

 

Brazil continues to have fallout from its meatpacking crisis. The EU has asked Brazil to voluntarily suspend all shipments of meat to its member countries to avoid imposing a ban that would take time to lift. Brazilian meat exports are in a tailspin following a police investigation into corruption involving food-sanitation inspectors and accusations that rotten products were sold. The prospect for weaker feed demand in the country seems very real which could force even more grains in SA to hit the world market.

 

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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September 15, 2017 | Grain Hedge Insights | Kevin McNew

Grain basis was mixed throughout the country as the convergence of old-crop/new-crop marketing seasons begins to cause some shifting patterns in basis. On the week, US average corn basis was fractionally higher while soybeans lost 3 cents a bushel.

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