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March 01, 2016 | Grain Hedge Insights | Kevin McNew | Views: 549
March 01, 2016 | Grain Hedge Insights | Kevin McNew | Views: 299

S&P Futures Up Sharply in Overnight Session

Monday saw export inspections for corn, soybeans and wheat all in line with analyst expectations.

Corn and soybeans posted modest gains overnight but were slumping their way into the morning break, while wheat came under slight selling pressure. In outside markets, S&P futures were up sharply as crude oil also posted significant gains.

 

Monday saw export inspections for corn, soybeans and wheat all in line with analyst expectations. However, year-to-date exports of corn are more than 20% below last year’s total this time of year while USDA has pegged only a 13% drop in annual exports. Wheat is off 13% compared to last year versus USDA’s expected drop of 9%. Soybean exports are on par with USDA which is factoring an 8% drop.

 

State USDA agencies released new results on the condition of the winter wheat crop. In Kansas the winter wheat crop was pegged at 59% good-to-excellent, up from 55% in its previous monthly report. However, "spring-like conditions prompted winter wheat to break dormancy early," the USDA's Kansas crop report said, a factor that could leave the wheat vulnerable to a cold snap later on. Colorado wheat rated 45% good/ex, down from 48% at the end of January. Oklahoma wheat rated 68% good/ex, down from 74% at the end of Jan. Illinois wheat rated 58% good/ex, down from 65% at the end of Jan.

 

France is expected to see a drop in corn acres this spring as producers there will likely cut acres by 6% due to unattractive prices and little hope of recovery, maize producers group AGPM said on Tuesday. In 2015/16 the grain maize area in the European Union's largest producer had already fallen by 5.6 percent on the previous year to 1.58 million hectares in 2015.

 

Stock futures were higher this morning as were Europe and Asia on expectations that global central banks will increase stimulus to spur economic growth. New York Fed President Dudley said that he is "somewhat less confident" that inflation will reach the Fed's target as "downside risks have crept up." His comments signal the Fed may wait further before they raise interest rates again. European stocks also found support after the Eurozone Jan unemployment rate unexpectedly fell to the lowest in more than 4 years. Global stocks shrugged off the negative Chinese economic data that showed the China Feb manufacturing PMI contracted at its steepest pace in 7 years.

 

U.S. oil prices rose on Monday after China moved to boost its slowing economy and Saudi Arabia pledged to work with other crude producers to limit market volatility, feeding hopes the oil sell-off would end. A Reuters poll also indicated the Organization of the Petroleum Exporting Countries pumped less crude this month than in January, boosting market sentiment.

 

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

February 29, 2016 | Grain Hedge Insights | Kevin McNew | Views: 622
February 26, 2016 | Grain Hedge Insights | Kevin McNew | Views: 674
February 25, 2016 | Grain Hedge Insights | Kevin McNew | Views: 572
February 25, 2016 | Grain Hedge Insights | Kevin McNew | Views: 424

Gains Going into the Break This Morning

Outside Markets were Relatively Subdued

Gains Going into the Break This Morning

Grains posted modest gains going into Thursday’s break, while outside markets were relatively subdued in quite, two-sided trading.

 

In wheat news, Egypt announced another tender yesterday for shipment Mar 26-Apr 4. Also, Saudi Arabia announced a large tender for 770,000 MT of hard wheat. India is also expected to be entering the market soon as weather issues there have cut back on supplies.

 

This morning, USDA’s Ag Outlook Forum provided the first look at 2016 USDA acreage projections. Although not based on formal surveys, it provides a basis for the markets prior to the first official survey released at the end of March.  USDA’s chief economist pegged corn plantings up 2 million in 2016 to reach 90.0 million. Trade expectations were for a 1.5 million acre increase. For soybeans, USDA expects a 0.2 million acre drop in 2016 versus the trade looking for a 0.6 million acre increase. Wheat acres are expected to drop 3.6 million versus only a 2.2 million acre drop expected by analysts.

 

Crude oil got a lift on Wednesday as EIA inventory data was in line with analyst expectations. The report showed a bump in crude stocks on the week by 3.5 million barrels, versus trade expectations of a 3.4 million barrel increase. Crude managed to rally over a $1.50 a barrel on that news, but has been on the defensive since then.  However, at 507.6 million barrels, the latest increase pushed total domestic crude inventory to another weekly high and 74 million barrels higher compared with last year. In monthly data, which doesn’t line up exactly with weekly data, inventories last exceeded 500 million barrels in 1930.

 

WEEKLY EXPORT SALES

                                Actual (OC+NC)      Expected (OC+NC)

Corn                              1,066                     700-1,200

Soybeans                        328.6                      300-700

Wheat                            486.2                      200-400

 

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

February 24, 2016 | Grain Hedge Insights | Kevin McNew | Views: 632
February 24, 2016 | Grain Hedge Insights | Kevin McNew | Views: 401

Grains Continue their Weakness from Tuesday

Outside markets were also weaker for the S&P and crude oil

Grains Continue their Weakness from Tuesday

Grains continued their weakness from Tuesday by starting Wednesday in negative territory. Outside markets were also weaker for the S&P and crude oil.

 

Yesterday saw wheat futures carve out new contract lows and hit their lowest price for nearby futures in 5 years. Rains crossing Oklahoma and eastern Texas brought beneficial moisture to the southern U.S. Plains winter wheat belt. Also, continued pressure from huge global supplies and weak US export demand continue to weigh heavily on the wheat market.

 

Traders will turn their attention to Thursday’s USDA Ag Outlook Forum. Average analyst estimates are for USDA to pencil in higher corn and soybean acres in to their outlook for 2016. Analysts expect an average corn number of 89.648 mln versus 88.0 in 2015. For soybeans, 83.302 mln versus 82.7 on 2015 and wheat at 52.4 mln versus 2015 acres of 54.6.

 

Crude oil fell sharply on Tuesday with continued losses to start the trade day today. Saudi’s oil minister spoke at a conference in Houston, suggesting no end to the pain for the oil industry and giving no inclination of cutting back on production. Late Tuesday, the American Petroleum Institute, an industry group, said that U.S. stockpiles increased by more-than-expected 7.1-million-barrel last week. The Energy Information Administration will release its official data later on Wednesday and analysts polled by The Wall Street Journal expect an increase of 2.4 million barrels.

 

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

February 23, 2016 | Grain Hedge Insights | Kevin McNew | Views: 751
February 23, 2016 | Grain Hedge Insights | Kevin McNew | Views: 334

Grains were Lower in the Overnight

In outside markets, S&P futures were modestly lower as was crude oil.

Grains were Lower in the Overnight

Grains were lower overnight giving up most of Monday’s gains. In outside markets, S&P futures were modestly lower as was crude oil.

 

Grains got a bit of a lift on Monday as USDA’s weekly export inspections report showed corn and soybean exports for the week above analyst expectation. This pushed grain prices to their highest point in two weeks but they quickly backed off as abundant global supplies continue to pressure prices.

 

In overnight news, there was fresh export activity. A South Korea firm bought 67,100 MT of US milling wheat while the Philippines and Thailand had tenders out for feed wheat. Saudi Arabia said it would be tendering soon for wheat, marking their first foray into the wheat market this year. Also, South Africa announced they would relax some of their tough rules on GM crops so it can ramp up corn imports from the US and Mexico to avert a food crisis.

 

Ukraine's grain harvest is likely to fall 10 percent to 52.2 MMT in 2016 due to a sharp decrease in winter wheat output caused by poor weather during the sowing, analyst UkrAgroConsult said on Tuesday. The wheat harvest is likely to decrease to 17.3 MMT this year from 24.8 MMT in 2015, the consultancy said in a statement.

 

Oil markets settled up as much as 6 percent on Monday as speculation about falling U.S. shale output and a rally in equities fed the notion that crude prices may be bottoming after a 20-month collapse. Prices began the week with a rebound in Asian trade, reacting to Friday's U.S. rig count data. The number of oil drilling rigs in operation fell to a December 2009 low after nine straight weeks of cuts. Oil got a further boost after the International Energy Agency, the world's oil consumer body, said U.S. shale oil production could fall by 600,000 barrels per day (bpd) this year and another 200,000 bpd in 2017. However, a Reuters poll forecast that U.S. crude inventories rose 3.2 million barrels last week to record highs above 504 million barrels. EIA will release their latest inventory data Wednesday morning.

 

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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