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March 28, 2017 | Kevin McNew | Views: 213
March 28, 2017 | Grain Hedge Insights | Kevin McNew | Views: 191

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: 218
March 27, 2017 | Grain Hedge Insights | Kevin McNew | Views: 182

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: 153

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: 199

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)

March 23, 2017 | Kevin McNew | Views: 249
March 23, 2017 | Grain Hedge Insights | Kevin McNew | Views: 170

Weekly Export Sales Were Supportive for Old Crop Corn and Soybeans

Grains Continue Lower in the Overnight

Grains continued to bleed lower overnight while in outside markets crude oil, equities and the US dollar were on the positive side of the ledger for this first time this week with limited gains.

 

Russia's SovEcon agriculture consultancy said on Thursday it had downgraded its forecast for Russia's 2017 grain crop to 109.5 MMT from a previous forecast of 112.5 MMT. SovEcon also sees the country's wheat crop at 62.5 MMT in 2017 compared with 73.3 MMT in 2016.

 

Brazil soy yields are reported to be very good but farmer sales are said to be slow. Palm Oil continued to be weaker overnight adding to losses early in the week. China’s soybean imports in February were at 7.5 MMT, down 4% from the same month last year. Argentina corn harvest is said to be speeding along and port deliveries by truck are said to be record large.

Weekly export sales were supportive for old-crop corn and soybeans. Overnight, Japan bought 59,000 MT of US wheat in their normal tender purchase of 117,689 MT of food wheat. The remainder will be supplied by Canada and Australia.

 

Export Sales-

 

Actual

  Estimated

Wheat - OC

  418

  250-450

Wheat - NC

  149

  50-250

Corn - OC

 1,347

  900-1,200

Corn - NC

  127

  100-300

Soybeans-OC

  738

  350-550

Soybeans-NC  

   80

  100-300

 

 

Financial markets will closely watch the Thursday vote in the US House on the Republican led healthcare law. A failure to move this policy forward, would likely signal a bleak outlook on financial policy changes like taxes and infrastructure that market participants have been betting on.

 

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

March 22, 2017 | Kevin McNew | Views: 147
March 22, 2017 | Grain Hedge Insights | Kevin McNew | Views: 112

US Equities and the Dollar Index Come Under Selling Pressure

Rain is still in the cards for the coming weeks over the Southern Plains.

Grains inched lower overnight with KC wheat continue to take the leader position on the downside. In outside markets, crude oil was pushing into new lows, off 60-cents a barrel and the US dollar and equities were pointing slightly lower following yesterday’s sharp slide.

 

USDA reported a 120,-000 MT of HRW wheat was sold to Saudi Arabia and 120,000 MT of soybeans were sold to China.

 

Rains is still in the weather cards for the coming weeks over the Southern Plains. However, overnight model guidance shows less rainfall (vs. yesterday) through month's end across the Texas and Oklahoma US wheat crop areas, but maintains near to above widespread 1.0 inch totals across much of Kansas.

 

In China, soy crush margins continue to come under pressure with crush margins dipping to their lowest level in 18 months. Rapid expansion of the soy crush margin in the Fall of 2016 helped push a buying spree of US soybeans, but with China’s margins under pressure and South America competition, it could be a dismal period of US export activity.

 

 

Yesterday, US equities and the dollar index came under selling pressure. In part, the dollar continued its lower trend on the Fed’s announcement they would take a less hawkish approach to future rate hikes than investors had thought. Furthermore, stocks are seeing pressure in auto- and consumer-sensitive areas suggesting the economy may not be as strong as expected. Also, investors will be watching the political theater around Thursday's House vote to repeal Obamacare, as these battles are threatening to push out tax reform and more stimulus well into the end of 2017 or 2018. A defeat in Thursday's vote would send a clear signal that the rest of Trump's agenda — taxes, the budget, and infrastructure — could be on shaky ground.

 

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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