June 15, 2018 | Grain Hedge Insights | Cody Bills | Views: 565

Trade War Intensifies

Mexico may impose tariffs on U.S. corn and soybeans

Trade War Intensifies

Trade War Intensifies

Overnight it was reported that President Trump would release a list of 800 Chinese product categories, down from 1,300 previously, that would have a combined $50 billion in tariffs. Officials state Trump no longer believes that Beijing's influence over North Korea is a compelling reason to ease up on trade talks now that his administration has opened up a direct line of communication.

China vowed on Friday to strike back quickly if the United States hurts its interests. "If the United States takes unilateral, protectionist measures, harming China's interests, we will quickly react and take necessary steps to resolutely protect our fair, legitimate rights," Chinese Foreign Ministry spokesman Geng Shuang told a regular daily news briefing.

On top of that, reports were circulating that Mexico was looking at imposing tariffs on U.S. corn and soybeans. Neither crop was on Mexico’s original list released a few weeks ago for targeting the US. But now, Mexico is thought to be studying ways to mitigate the economic pain of such a move.

 

Japan Halts Canadian Wheat Supplies on GMO finding

Japanese farm ministry said on Friday it has suspended its tender and sale of wheat from Canada after grain containing a genetically modified trait was discovered last summer in Canada's Alberta province. The Canadian Food Inspection Agency (CFIA) said on Thursday the wheat containing a genetically modified trait, developed by Monsanto Co BAYGn.DE to tolerate the Roundup weed-killer, was discovered in Alberta. "We are suspending the tender and sale of Canadian wheat until we confirm that the Canadian wheat that Japan buys contains no GMO," an official at the Japanese farm ministry said.

 

South Koreans Back in for Corn

Bargain buying continued overnight as two different feed groups from South Korean (KFA and NOFI) were both in the market tendering for around 60,000 MT of corn.

NOPA Crush Expected to be Record Large

Analysts expect at 165.1 MB crush for the National Oilseed Processors Association (NOPA) data in May. That would be 8% higher than the month's all-time high. NOPA’s report is due at 11 am CDT.

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

June 14, 2018 | Coach’s Corner | Greg Martinelli | Views: 666

Fail Fast

Here's how to learn fast and recover even faster

Fail Fast

Fail fast and small. Recover fast and big. Please understand, I don’t mean fail intentionally. In sales, however, trying to achieve perfection in everything before actually going to the market will result in more failures, not less.

How so?

Strangely enough, a recent documentary about The Improv comedy club is a great analogy. Located in New York, The Improv was basically an open mic comedy club where almost every great comedian got started. During the documentary, they interviewed Jerry Seinfeld, Jay Leno, Ray Romano, etc. They showed clips from their first years in comedy and those first times on stage. Every single one of them said the same thing.

  1. I was terrible in the beginning
  2. I worked hard and kept at it
  3. I improved over time by testing material at The Improv
  4. I never went to the big stage (the Tonight Show or Letterman) before testing it out at The Improv

We can learn a lot from these four observations. You take your products, your techniques, your sales questions and you try them out in a small way. Maybe, that’s with a “safe” customer. Maybe it’s in a “safe” part of your territory. But, it’s with real customers or prospects where you can see real reactions. From those reactions, you modify, work hard and eventually you improve.  

What about customer surveys, expert panels and customer panels? All good if you have the budget, but a word of caution. Customer surveys are not the same thing as opening up their wallet and buying. So, take the results with a cautious eye. If you give someone a free sample and a coupon and then have them fill out a survey, odds are likely they want to “be nice” and say good things. This doesn’t mean they will actually take the next step and buy. Panels are sort of the same way. Hired to give their opinion, they can be easily influenced or favor the company that is bringing them together. Again, this might not translate into actually buying when the choice is presented.

So, how can we fail fast and small, but recover faster and recover bigger? If you have been on territory for any length of time, you should have those customers and those areas of your territory that you feel safe with. These are loyal customers that you have worked very hard for and earned a lot of trust and respect from. These customers will tell you exactly how they feel about you, your products and your company. Treasure these relationships because they are your version of The Improv. This is where you take your ideas for products or programs and test them out in a small way.

Over the many years of launching products and different programs, I can’t tell you how many times this technique paid off in a big way. Several times, it saved embarrassing failures before launching to the whole marketplace. However, most of the time, it yielded small tweaks that made the product or program just a little better and a little more of a fit for the customer we were going after.

Launching a new premium dog food campaign, our supplier recommended using a 1,000# ISO (Initial Stocking Order). They put together the list of their recommended products to make up that 1,000# order. By trialing this out with a couple dealers in my territory, we found about 800# of those products wouldn’t sell and had to be returned. Needless to say, we didn’t take that concept any further.

Several areas of the country had gone out with the ISO program to all their customers. And just about everyone of them were returned. We guaranteed the return from our customers but our supplier had a no return policy. So, our fellow sales people in those locations had to somehow sell off dozens of those products that now clogged their warehouses.

We had failed in a small way with only a few dealers, which allowed us to recover fast and focus on those products that actually did sell.


Join us at Coach’s Corner every other week, where Greg Martinelli offers sales coaching tips for the Ag Sales Professional.

June 14, 2018 | Grain Hedge Insights | Cody Bills | Views: 482

Corn and Soybean Sales Beat Analyst Expectations

Recent decline in prices spurred on purchases

Corn and Soybean Sales Beat Analyst Expectations

Soybeans Make 10-Month Lows Following China Tension, Informa Estimate

Beans fell on the news that President Trump may slap China with additional tariffs as soon as this Friday and that the ZTE deal appears to have stalled.

Adding even more downward pressure, Informa estimates that soybean acres are up 500k to 89.902 million acres. They also estimate production to be 4.409 billion bushels; a record high. The July soybean traded as low as 931.25, the lowest since Aug 31, 2017. Nov beans touched 956.00 during yesterday’s session.

 

Ethanol Production Increases to One-Month High, Stockpiles Grow

Production is up by 0.012 from last week to 1.053 million barrels a day, the highest since May 11. This weeks production was up 5.1% over last year during the same week. Ethanol production is on pace to meet USDA expectations and now weekly production only needs to average 1% over LY to meet current USDA projections. Inventories rose to 22.174 million barrels, a high last seen on March 30.

 

Flood Warnings and Heat Advisories for Illinois-Missouri Border

Heat indexes of 105 deg F and high humidity are expected for counties on both sides of the Mississippi in Illinois and Missouri. Further East, there are flood warnings in effect following heavy rainfall that has pushed rivers over their banks. Eastern Iowa still has some flood warnings in effect and could expect small hail with the thunderstorms anticipated in the area later today.

Export Sales

This week’s corn and soybean sales beat analyst expectations as the recent decline in prices spurred on purchases. Soybean sales jumped sharply from last week with sales to Indonesia, Unknown Destinations, Egypt, Japan and Portugal.

 

 

   Actual

   Estimated

Last Week

Wheat-OC

   302.3

   150-450

250.9

Corn-OC

   936.4

   600-900

838.6

Corn-NC

   240.2

   200-400

418.3

Soybeans-OC

   519.6

   100-400

164.8

Soybeans-NC

   291

   100-400

34.7

Soymeal-OC

   74.6

    50-250

131.2

Soymeal-NC    

   23.3

     0-150

3.9

 

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

June 13, 2018 | Grain Hedge Insights | Cody Bills | Views: 666

USDA Report Shows Drawdown for Corn

Grains were down in overnight; July Soybeans lose almost 10 cents

USDA Report Shows Drawdown for Corn

USDA Report Shows Drawdown for Corn, Soybean Supplies

Good export numbers and strong demand worldwide were cited for old crop corn ending stocks falling 80 million bushels to 2.102 bbu and new crop down 105 mbu to 1.577 bbu. Old crop beans drew 25 mbu to 0.505 bbu and new crop ending stocks came in under expectations at 0.385, down 30 mbu from the May WASDE estimate. Old crop wheat had a build of 10 mbu to 1.080 bbu but new crop drew down 49 mbu to 0.946 bbu. Currently, corn, soybean, and wheat ending stocks are projected to fall by 25%, 23%, and 12% respectively.

Export Sales Announcements

Private exporters reported to the U.S. Department of Agriculture export sales of 177,000 metric tons of soybeans for delivery to unknown destinations. Of the total 5,000 metric tons is for delivery during the 2017/2018 marketing year and 172,000 metric tons is for delivery during the 2018/2019 marketing year.

EPA Head Pruitt Teases E15 During Midwest Tour

Pruitt told Midwestern farmers and politicians that the EPA has the authority to grant summertime E15 waivers. E15 sales during the summer is currently banned by the EPA due to concerns of potentially increased smog during peak driving season. Just last week, the White House scrapped plans to revise the Renewable Fuel Standard that would serve to aid oil refiners.

South American Corn Estimates In Line With Expectations, Brazilian Beans Surprise

Argentine corn production estimates remained unchanged from the May WASDE at 33 MMT and soybeans were reduced by 2 to 37 MMT, in-line with trader expectations. The Brazilian corn estimate was slashed by 2 MMT to 85 MMT but soybeans were increased by 2 MMT to 119 MMT which was on the high end of the analysts’ range.

 

The risk of trading futures, hedging, and speculating can be substantial.

FBN BR LLC (NFA ID: 0508695)

June 12, 2018 | Grain Hedge Insights | Cody Bills | Views: 371

Minor Dip in Crop Conditions

On Monday after the close, USDA pegged U.S. corn crop at 77% good-to-excellent

Minor Dip in Crop Conditions

USDA Shows Minor Dip in Crop Conditions

On Monday after the close, USDA pegged the U.S. corn crop at 77% good-to-excellent. That’s off slightly from last week’s reading of 78%. MO and SD continue to see falling conditions with MO down 11% on the week to 56% and SD off 7% to 63%.

Soybeans also saw a modest dip to 74% from 75% last week. MO & SD were again states where the condition scores deteriorated with 48% and 60% of the crop rated good-to-excellent, respectively.

The U.S. winter wheat harvest was 14% completed, up from 9% last week.

 

Export Sales Announcements

Private exporters reported to the U.S. Department of Agriculture export sales of 152,000 metric tons of corn for delivery to Mexico. Of the total 114,000 metric tons is for delivery during the 2017/2018 marketing year and 38,000 metric tons is for delivery during the 2018/2019 marketing year.

 

U.S. - North Korea Summit Ends

U.S. President Donald Trump and North Korean leader Kim Jong Un pledged to work toward complete denuclearisation of the Korean peninsula, while Washington committed to provide security guarantees. Details were sparse while the grins were broad from this historic meeting that left the world breathing a modest sign of relief.

While not directly linked to U.S.-China trade tensions, the broader market may take some solace in hoping this step of political normalization will have positive reverberations into trade issues.


Ukraine Wheat Crop

The UkrAgroConsult agriculture consultancy on Tuesday cut its forecast for Ukraine's 2018/19 crop year wheat by 3% to 25.5 MMT. That’s off from 26.5 by USDA in their May forecast. The Ukrainian state hydrometeorological centre said last week that drought in eastern and southern regions could shrink Ukraine's 2018 wheat harvest by 15-30 percent below original forecasts. UkrAgroConsult said drought could also affect late crops like corn noting that while current weather is not critical, that lack of timely rains could limit corn plantings as growers are expected to prefer sunflowers.


South Korea Feed Buyer Back for Corn

South Korea's Major Feedmill Group (MFG) purchased about 70,000 MT of corn to be sourced from optional origins in an international tender for up to 140,000 MT. Since June, South Korea feed buyers have bought 1 MMT in the global corn market.

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

June 11, 2018 | Grain Hedge Insights | Kevin McNew | Views: 581

G7 Summit Drama Complicates Trade Talks

Back and forth between Trump and Trudeau muddies the waters for tariff talk

G7 Summit Drama Complicates Trade Talks

G7 Summit in Quebec Results in Trade Turbulence

Trade tension, in the agricultural sector particularly, between the US and Canada served as the highlight of meeting of the world’s 7 largest economies.

Trump tweeted that American farmers have a “big and unfair price to pay” when it comes to exporting goods abroad.

Germany’s Angela Merkel plans on implementing tariffs in response to last week’s tariffs on Canadian and European steel and aluminum put in place by President Trump.

 

Russian Wheat Production Estimates Reduced By Prominent Consultants

IKAR lowered their total wheat estimate by 2 million metric tonnes to 71.5 MMT, citing cold, damp weather in Siberia, a major spring wheat producing area.

SovEcon cut their HRW by 800,000 MT to 54 MMT on news of inadequate moisture in the Black Sea growing region

Ending stocks of all Russian wheat remain high, pegged at 11.72 MMT according to the May USDA WASDE report.

 

Harvest Begins For Brazil’s Second Crop Corn

Harvesters have been out shelling corn in the Brazilian state of Mato Grosso, one of the top producing states in the country.

Yields have been reported to be around 99-102 bpa, as the earliest planted corn received the best moisture through the growing season. Yields are expected to fall as harvest progresses.

 

Commitment of Traders Report Shows Increased Selling For Corn and Beans, Silver Lining For HRW

In corn, money managers reduced their net long position by nearly 100,000 lots, bringing their net longs down to 78,696 contracts, as US crop conditions have been quite strong.

Soybeans fared no better as hedge funds took their net long position down by around 38,000 contracts to 65,177.

KC HRW saw managed money long positions increased by nearly 10,000 to 57,167, coming off of the news that Russian wheat production estimates were scaled back.

Chicago SRW had money managers increase their short positions by around 2700 lots to be net long with 23,058 contracts.

June 08, 2018 | Grain Hedge Insights | Kevin McNew | Views: 670

U.S. Corn Enjoys Discount Compared to South America

Transportation issues and poor production have increased costs for corn at Brazilian ports

U.S. Corn Enjoys Discount Compared to South America

South Koreans Continue Buying Spree

South Korea’s KOCOPIA bought about 60,000 MT of US corn this morning.

Yesterday, two groups from South Korea bought a combined 202,000 MT of optional origin corn and prior to that two other groups bought 192,000 MT. That brings the 7-day total to 452,000 MT.

Brazil’s export prices have surged 18 cents a bushel relative to US prices in recent weeks, with the Brazil port price trading at a 14-cent premium to US values. This time last year Brazil traded at a 32-cent per bushel discount to the US.

 

French Corn Crop Struggles

France’s corn crop is off to a bumpy start as excessive rain and hail have caused problems for the newly planted crop.

According to the state agency FranceAgrimer,77% of the crop is in good/excellent condition, a steep slide from last week’s reading of 84%. A series of storms since last May have brought torrential rain and hailstones to parts of France, causing localised flooding.

France produces about 25% of the EU’s corn crop with most of it being exported to other EU countries

 

 

Ukraine/Russia Crops Continue to get Downgraded

Ukraine’s wheat crop continues to struggle as the crop has received no meaningful rain since April and none is in the forecast for the next 7 days.

Severe drought in eastern and southern regions could shrink Ukraine's 2018 wheat harvest by 15-30 percent below original forecasts, the state hydrometeorological centre said on Friday.

Russian agriculture consultancy IKAR said on Friday it had downgraded its forecast for Russia's 2018 wheat crop to 71.5 MMT from 73.5 MMT previously.


 

The risk of trading futures, hedging, and speculating can be substantial.

FBN BR LLC (NFA ID: 0508695)

FBN BR LLC   NFA ID: 0508695

June 07, 2018 | Grain Hedge Insights | Kevin McNew | Views: 502

Soybean Export Sales Disappoint

Soybeans sales declined 40% from last week

Soybean Export Sales Disappoint

Ethanol Stocks Rise This Week

Stockpiles rose 634k barrels to 21.897 million barrels, nearly the same level as this time last year. Production of the biofuel remained unchanged week over week at 306 million gallons. This week’s production remains above the target needed to hit the USDA’s goal for corn demand for ethanol grind.

 

Wheat Rallies Overnight on Australia, Russian Weather Woes

Wet, cool weather in western Russia will slow crop progress while southern Russia remains dry and will miss coming rain showers. SW Australia has been lacking moisture and is not expecting any rain in the near-term forecast. Jul KC HRW rallied 11.5 cents to $5.5125 amid weather concerns and short covering.

 

Brazilian Government to Review Freight Rates, Potential for Strikes

The government, despite reaching a deal just days ago, is already looking to review these changes. Freight costs have already increased by as much as 150%. The spokesman of the National Transport Union has promised renewed strikes if these changes are altered in any way.

Export Sales

Export sales were mostly within trade expectations this week for corn and wheat, while soybean sales disappointed. Soybeans sales declined 40% from last week. 17/18 marketing year came to a close for wheat on May 31st with slight cancellations in the final week of the marketing year.  
 

 

 

Actual

   Estimated

Last Week

Wheat-OC

(-19.4)

   (-300)-(-100)

   29.5

Wheat-NC

250.9

   250-450

  270.9

Corn-OC

838.6

   600-900

  993.1

Corn-NC

418.3

   200-400

  149.3

Soybeans-OC

164.8

   200-500

  273.4

Soybeans-NC

34.7

   200-500

  771.6

Soymeal-OC

131.2

    50-350

  140.7

Soymeal-NC

3.9

     0-100

     2.3

 

The risk of trading futures, hedging, and speculating can be substantial.

FBN BR LLC (NFA ID: 0508695)

June 06, 2018 | Grain Hedge Insights | Kevin McNew | Views: 650

Oklahoma Wheat Harvest Continues

Wheat extends rebound on global supply concerns

Oklahoma Wheat Harvest Continues

Dec Corn 17 vs 18

Dec 18 corn is trading at $4.04, virtually the same price that Dec 17 corn was trading at this time last year. However, USDA’s new crop carry-out for 2018 is 1,682 MB based on their May report. In 2017, the USDA was over 400 MB higher at 2,110 MB but the board is trading the same $4 value. Last year prices collapsed to $3.35 weighed down by record yields and a ballooning carry-out projection that by harvest reached 2,482 MB. But this year, even if we hit another new record yield of say 178 MB, carry-out would stay below 2,000 MB. The chance of Dec corn prices below $3.75 seems remote.

 

RFS Policy Changes “Indefinitely Delayed“

The White House was expected to announce changes to the Renewable Fuel Standard program yesterday but instead sources now say the deal is indefinitely delayed. A last minute push by corn state lawmakers may have derailed the process as they expressed grave concerns about proposals that would allow ethanol exports to count towards RIN certificates, undermining the programs effectiveness.

 

Taiwan's MFIG buys 65,000 tonnes of corn from optional U.S./Brazil origin

Oklahoma Wheat Harvest Just OK

The Oklahoma Wheat harvest continues to progress in most regions of the state with the exception of far Northwestern and Panhandle areas according to a report by the OK Wheat Commission. While protein qualities and test weights have been promising, lower yields and lack of acres with losses to Cotton and other crops continue to make this an extremely fast-moving harvest. In several locations across the Central and Western corridors of the state from Texas to Kansas, many elevator managers have mentioned they hope to take in 10% of what they would in a normal year. The Commission says USDA’s May figure of 52 MB for the state looks accurate, although they caution the final number could come in lower based on the increased reports of abandonment.
 

 

The risk of trading futures, hedging, and speculating can be substantial FBN BR LLC (NFA ID: 0508695)

June 05, 2018 | Grain Hedge Insights | Kevin McNew | Views: 488

Crop Progress & Condition

Corn planting reached 97% planted; soybeans 87%

Crop Progress & Condition

Crop Progress and Condition

U.S. corn planting reached 97% this week, up from 92% last week. The condition of the crop slipped modestly to 78% good-to-excellent this week, off from last week’s strong reading of 79%.

For soybeans, the crop was 87% planted up from 77% last week. The first crop condition report of the year showed a solid reading of 75% good-to-excellent, slightly above the 74% mark that the average of analysts had been looking for.

In wheat, the spring wheat crop was rated as 70% good-to-excellent, just a bit below the average trade guess of 71% while the winter wheat crop dipped to 37% from 38% last week. Winter wheat harvest was 5% complete as wheat cutting made its way across the Red River this weekend from TX into S OK. Reports in the Lawton, OK area show yields coming in higher than expected.

More South Korea Biz

South Korea's Major Feedmill Group (MFG) purchased about 132,000 MT of corn to be sourced from optional origins in an international tender that closed on Tuesday.

Origins can be US, Ukraine, South America or South Africa. Last week MFG and other South Korea feed groups bought a combined 500,000 MT of corn as market prices softened. Taiwan’s MFIG corn purchasing group has issued a tender to buy up to 65,000 tonnes of corn which can be sourced optionally from the United States, Argentina, Brazil or South Africa. The group last tendered on May 11 for the same volume of corn.

Mexico to Implement U.S. Pork/Cheese Tariff

Mexico announced a 20% tariff on US pork and a 20-25% tariff on US cheese on Tuesday in retaliation to the US’s own implementation of steel and aluminum tariffs. The ministry also said it was opening a 350,000 tonne tariff-free quota for imports of pork legs and shoulders from other countries. Industry officials pointed to Canada as a possible substitute pork supplier that has tariff-free access to Mexico thanks to NAFTA, or the European Union, which recently concluded a revised trade pact with Mexico that allows tariff-free pork imports but does include other restrictions like volume quotas.

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

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