September 06, 2017 | Grain Hedge Insights | Kevin McNew | Views: 519

Hurricane Harvey Impact

Crop Conditions Reported Yesterday

In the overnight session the grains have traded lower with December corn down 1 ¼ cents, November soybeans down ½ cents and December Chicago wheat down 1 ½ cents. Corn continues to struggle against the resistance level of around $3.58 which was last years low for the contract.   

 

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Crop conditions were reported within analyst expectations after the market closed yesterday. Corn declined by a percentage point to 61 percent good to excellent compared to expectations of holding steady. Soybean conditions were unchanged at 61 percent good to excellent. The U.S spring wheat is 89 percent harvested compared to a five year average of 78 percent by this week.

 

On Tuesday, Brazil’s Agroconsult reported their latest 2017-18 crop estimates. Brazil’s soy crop is estimated at 111.1 million metric tons which is 4 percent below last years record. Agroconsult estimated their first corn crop at 26.1 million metric tons which was 14 percent below 2016-17 levels.  

 

The Stocks of Principal Field Crops Report was released this morning by Statistics Canada which showed Canadian grain stocks as of July 31st. According to the report wheat stocks were 6.9 million metric tons which was up 32.6 percent from last year. Durum wheat stocks were up 69.4 percent from last year at 1.9 million metric tons. Canola stocks however were 1.3 million metric tons which was a 35.5 percent decline from last year.       

Hurricane Harvey’s impact on wheat export out of Texas continues to linger after flooded railroad tracks and closed ports stopped all movement of wheat last week. Hurricane Irma is now on track to hit Florida by the weekend and has been strengthening with winds up to 185 miles per hour.  

 

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August 30, 2017 | Grain Hedge Insights | Kevin McNew | Views: 472

Grains Mostly Unchanged in the Overnight Session

Exporters sell 131,000 MT of Soybeans for delivery to china during the 2017/2018 marketing year. USDA

In the overnight session the grains were mostly unchanged with December corn unchanged, November soybeans unchanged and December Chicago wheat up 2 ¾ cents. The weather forecast provides very little moisture over the next two weeks and cooler temperatures are expected to enter the Midwest by September 5th. Opportunities for precipitation look to be limited mostly to the Delta, eastern Grain-belt and Ohio river valley region in the 1-5 day forecast.    

 

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The grains have come under pressure following the Pro Farmer crop tour as traders became less concerned that the USDA would revise production lower. The grains could be facing further pressure from the cash market this week as unpriced DP cash grain contracts for old crop corn and soybeans will need to be set by Thursday. The crop marketing year will begin September 1st for corn and soybeans.  

 

Exporters sell 131,000 MT of Soybeans for delivery to China during the 2017/2018 marketing year. USDA

 

In the wheat tender that closed Tuesday, Egypt’s grain buyer GASC announced it bought 295,000 metric tons of wheat primarily sourced from Russia with 60,000 metric tons sourced from Ukraine.

On the domestic front, 226,000 metric tons of corn was sold to Mexico for delivery during the 2017/18 marketing year and 198,000 metric tons of soybeans were sold to China for delivery in the 2017/18 marketing year.  


 

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August 28, 2017 | Grain Hedge Insights | Kevin McNew | Views: 412

Crop Tour Results Released

Crop Progress Report Out Later Today

The Pro Farmer crop tour announced their official crop estimates on Friday after walking fields across Ohio, Indiana, Illinois, Minnesota, Iowa, Nebraska and South Dakota. Both corn and soybean estimates came in below the latest USDA production forecasts which triggered some buying in the early night session Sunday evening. However, the gains evaporated by morning leaving December Corn down ¾ of a cent, November Soybeans up a 2 ¾ and December Chicago Wheat down 2 ¾ cents this AM.

 

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The Pro Farmer U.S corn production estimate was 13.953 billion bushels with an average yield of 167.1 bpa. This is below the August USDA estimate of 169.5 bpa and 14.153 billion bushels of total corn production. The tour estimated soybean production at 4.331 billion bushels with an average yield of 48.5 bpa. The August WASDE estimate pegged soybean production at 4.381 billion bushels and 49.4 bpa.

 

According to the latest commitment of traders report, non-commercial traders, a category that includes large speculators increased their net short for corn, soybeans and SRW wheat. The net short position for corn increased by -47,041 to -81,729. The net short position for soybeans grew by -9,138 to -56,122 and the SRW wheat net short position increased -21,488 to -96,112.  

 

A Reuters poll of nine analysts indicate that brazilian soy farmers may increase their planted area for the 2017-18 crop. The average analyst guess shows brazilian acreage increasing by 2 percent from last year to 85.7 million acres with a total production of 110.6 million metric tons. Analysts are expecting an increase to be mainly in the Parana state.


 

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August 25, 2017 | Grain Hedge Insights | Kevin McNew | Views: 452

Pro Farmer Corn and Soy Crop Tour Results Out Later Today

World Stocks Climb Higher on Friday

US soybeans edged lower on Friday, although the oilseed was poised to record its first weekly gain in more than a month as strong export demand provided support.

 

Corn eased, with the grain on course to finish the week down 3 percent, its fifth consecutive weekly fall as ample global supplies pushed prices to a near five-month low on Thursday. Iowa corn yields are projected to fall about 4.5 percent from last year’s bumper crop, crop scouts said on their annual tour this week. Farm Journal’s Pro Farmer newsletter is expected to release their US Corn and Soy Production estimates today at 1:30 p.m. CST.  

 

Wheat set for sixth weekly fall in past seven weeks.

 

Exporters sell 132,000 MT of soybeans for delivery to China during the 2017/2018 marketing year. Exporters sell 105,500 MT of soybean cake and meal for delivery to Thailand during the 2017/2018 marketing year. - USDA

 

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World stocks climbed toward their best week in six on Friday, as a near three-year high in emerging market shares and a roaring rally in metals bolstered the year’s global bull run. Moves were mainly small ahead of speeches later by Fed Reserve and European Central bank heads Janet Yellen and Mario Draghi at one of the highlights of central banking calendar, the Jackson Hole, WY symposium.

Hurricane Harvey intensified early on Friday into potentially the biggest hurricane to hit the US mainland in more than a decade, as authorities warned locals to shelter from what could be life-threatening winds and floods.  Harvey is set to make landfall late Friday or early Saturday on the central Texas coast where Corpus Christi and Houston are home to some of the biggest US refineries. Oil and gas operations have already been affected and gasoline prices have spiked.

 

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August 24, 2017 | Grain Hedge Insights | Kevin McNew | Views: 426

Midwest Crop Tour Estimates Are In

Corn Prices Up for the First Time in Four Sessions

US soybean futures rose 0.5 percent on Thursday on expectations of higher demand from the bio-diesel sector while corn edged higher after a widely watched tour reported lower yield estimates in key producing regions. Wheat futures were also firm on strong demand but new signs of a hefty Russian harvest capped gains.

 

The uptick in support for corn came as the Farm Journal Midwest Crop Tour said Illinois corn yields are projected to fall about 6.6 percent from last year’s near-record crop after surveying 205 fields across the No. 2 corn-producing state.  Corn yield potential and soybean pod counts were also lower from a year ago and below the three-year average across western Iowa, with the crops showing signs of stress from dryness during June and July, scouts on the annual tour found on Wednesday.

 

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Farm Journal Midwest Crop Tour Estimates:

 

  • Illinois Average Corn Yield at 180.72 bushels per acre; down from 193.50 last year
  • Illinois Average Soybean Pod Count at 1,230.77 in 3-By-3 foot area, down from 1,318.09 last year.
  • Corn Yield in Iowa Crop District 1 at 178.67 bushels per acre versus 186.82 a year ago.
  • Corn Yield in Iowa Crop District 4 at 179.36 bushels per acre versus 182.65 a year ago.
  • Corn Yield in Iowa Crop District 7 at 185.65 bushels per acre versus 191.87 a year ago.
  • Iowa District 1 Average Soybean Pod Count at 986.49 in 3-By-3 Foot area versus 1,226.21 a year ago.
  • Iowa District 4 Average Soybean Pod Count at 1,158.06 in 3-By-3 Foot area versus 1,265.39 a year ago.
  • Iowa District 7 Average Soybean Pod Count at 1,133.76 in 3-By-3 Foot area versus 1,380.97 a year ago.

 

Net sales for wheat in marketing year 2017/2018 were down 39 percent from the previous week and 11 percent from the prior 4-week average. Net sales for 2016/2017 corn were up 64 percent from the previous week and 68 percent from the prior 4-week average. Net sales reductions for soybeans of 400,300 MT for 2016/2017; a marketing year low, were down noticeably from the previous week and from the prior 4-week average.

 

Weekly Export Sales-

 

Actual

Estimated

Wheat

386

300-600

Corn - OC

102

50-250

Corn - NC

423

400-700

Soybeans - OC

-400

250-450

Soybeans - NC

2008

400-600


 

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August 23, 2017 | Grain Hedge Insights | Kevin McNew | Views: 312

Day Two Crop Tour Results Are In

Grains Trade Slightly Higher in the Overnight

In the overnight session the grains are trading slightly higher on Pro Farmer Day two results and an announcement of countervailing duties on Argentine and Indonesian bio-diesel. This morning December corn is up a 2 ¼ cents, November soybeans have gained 8 ½ cents and December Chicago Wheat is up 3 cents.

 

The Department of Commerce announced yesterday that it would impose larger than expected countervailing duties on Argentine and Indonesian bio-diesel imports after they ruled they were both subsidized. The Bio-diesel import duties will be 50-64 percent for Argentina and 41-68 percent for Indonesia.

 

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Day two of the crop tour covered Nebraska and Indiana both of which showed slightly weaker soybean counts from last year. In their evening report, Pro Farmer announced their Nebraska corn yield estimate was 165.42 bpa, which was up 6.82 bpa from last year and above the three year average of 158.60 bpa. Nebraska soybeans had an estimated pod count of 1,131.02, which was down 92.05 pods from last year and below the three year average of 1,182.12. Indiana corn yield estimates were forecast at 171.23 bpa down 2.19 bushels from last year but above the three year average of 167.13 bpa. Indiana soybean pod count was 1,168.78 which was down roughly 10 pods from last year but above the three year moving average of 1164.09.

The forecast shows there is the chance of precipitation by the middle of next week to help relieve the driest soybean areas throughout the Midwest. Rains are expected again in the 11-15 day forecast which will be beneficial for the crops. The latest weather models show no early frost threats over the next two weeks.  

 

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August 22, 2017 | Grain Hedge Insights | Kevin McNew | Views: 481

Crop Tour Scouts Release First Day Results

Grains were Mixed in the Overnight Session

In the overnight session the grains were mixed with December corn down ¼ penny, November soybeans up 1 ¼ cents and December Wheat down ½ cent. Traders will be watching reports from the crop tour, where any suggestion that yields are not in line with the latest WASDE forecast will most likely cause market jitters.

 

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Recent rains are helping to limit the driest spots to only 15 percent off the Midwest corn and soybean area. The 6-10 day weather models continue to show cooler than normal temperatures throughout the majority of the Central and Eastern U.S which should help corn filling. At this point the frost risk over the next two weeks remains very low.  

 

Crop conditions were reported yesterday and were in line with analyst expectations. U.S soybeans rated good-to-excellent increased a percentage point to 60. Corn conditions held steady this week at 62 percent good-to-excellent and spring wheat condition improved by a percentage point to 34.  

 

After the first day of the crop tour scouts announced that corn yield potential in south eastern South Dakota was below average and soybean pod counts were low as well. This shouldn’t come as a shock to the market considering the dry hot weather that area has seen throughout the growing season.  The tour pegged South Dakota corn yield at 147.97 bushels per acre, down from 149.78 bushels a year ago and down 8.17 bpa from the three year moving average. Soybean pod counts were at 899.56 in a 3 by 3 foot square which is down from the three year average of 1,027.80. On the eastern leg of the tour, Pro Farmer pegged Ohio yield estimate was 164.62 bpa up from 148.96 bpa last year. The tour estimated the number of soybean pods counted in the 3 by 3 foot square was 1,107.01 pods, slightly below the three year average of 1,174.24 pods.  

The Iranian animal feed importer SLAL issued tenders to purchase 200,000 metric tons of feed Barley and 200,000 metric tons of corn this morning. Japan also issued a regular tender to purchase 133,791 metric tons of feed-quality wheat from the U.S or Canada.


 

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August 21, 2017 | Grain Hedge Insights | Kevin McNew | Views: 332

USDA Flash Soybean Sales this Morning

Grains trade lower in the Overnight Session

In the overnight session the grains traded lower with December corn down 2 ¾ cents, November soybeans down 5 ½ cents and December Chicago wheat down ½ cent as weekend precipitation and additional moisture in the forecast puts pressure on the market.

 

EXPORTERS SELL 463,000 METRIC TONS OF SOYBEANS FOR DELIVERY TO UNKNOWN DESTINATIONS DURING THE 2017/2018 MARKETING YEAR. EXPORTERS SELL 198,000 METRIC TONS OF SOYBEANS FOR DELIVERY TO CHINA DURING THE 2017/2018 MARKETING YEAR- USDA

 

Weekend rains fell in Southwest Minnesota, Central and Southeast Nebraska, Southern Iowa and Northern Missouri. The latest weather forecast shows temperatures will begin to cool down throughout the Midwest by Tuesday and are likely to stay cool for the remainder of the month.

 

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The Pro Farmer crop tour will kick off today and will scout around 2,000 fields between the 21st-24th. The tour is split into two different legs starting on opposite sides of the country. The first leg will start in Western Ohio and travels through Indiana, Illinois, eastern Iowa and into Minnesota while the second leg starts in South Dakota and goes across Nebraska, Western Iowa and into Southern Minnesota. The summary of the Tour’s yield estimates is presented in Minnesota on the 24th.

This morning the Saudi Arabian main state wheat buying agency announced that it had purchased 490,000 metric tons in a wheat tender that averaged $218.19 per metric ton. The wheat was sourced from the European Union, North and South America and Australia. This morning the South Korean corn processing industry association purchased about 55,000 metric tons of corn in a tender that closed Friday.     

 

According to the Commitment of Traders report for the week ending August 15th, managed money cut their net long position for corn and soybeans in the latest report. Corn positions held by managed money fell by 27,271 this week to 39,802 while soybeans fell 27,312 to a net short position of -14,399. The net short position in Chicago Wheat increased this week to -34,236.

 

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August 18, 2017 | Grain Hedge Insights | Kevin McNew | Views: 301

Weekly Cash Comments

Weekly Cash Commentary for week ending 08/18/2017

Grain basis moved higher this week and sliding grain futures continued to pressure farmer movement. On the week, corn basis was up 2 cents a bushel while spot soy basis managed a 3-cent advance.

 

Corn basis was buoyed mostly by ethanol plants which saw a 3-cent gain on the week. Much of the Western Cornbelt saw solid basis improvements on the week as farmers there face lower yield potential and hold back on any old-crop deals. Meanwhile at river terminals, basis was up about 2 cents, on par with the broader movement across the US. The Gulf was mostly steady on the week.

For soybeans, basis levels were much stronger at river terminals with a 5-cent advance on the week; driven partially by a 2-cent improvement at the Gulf. Soy crush plants were up 3 cents a bushel, although late-season maintenance routines for select plants will likely slow some of the appetite for soybeans in the near-term.

In terms of the competitive landscape, we saw Eastern IL/Western IN premium buyers bid up the market in their region.  Bunge and Cargill added a nickel to their basis to help expand their drawing region over the last week. Further to the south, Poet gained some ground in their drawing region with a modest 1-cent basis improvement.

 

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August 18, 2017 | Grain Hedge Insights | Kevin McNew | Views: 453

IL Corn and Soybean Yields May Be in Danger of Falling Short of Forecasts

USDA Announces Two Positive Trade Developments

In the overnight session the grains traded slightly higher with December corn up ¼ cent, November soybeans up ¾ of a cent and December Chicago wheat up 2 cents. December 2017 Corn is now trading at 3.64 ½ cents which is just six cents above the contract low of 3.58 ½. Any push lower should be met with technical support around that contract low that was set August 31st 2016.

 

Illinois corn and soybean yields may be in danger of falling short of forecasts, as significant contributions from the weather are still needed in the eastern half of the state. This year, the US Department of Agriculture does not expect Illinois to set new yield records. Last week, the agency pegged the state's corn and soybean yields at 188 and 58 bushels per acre, respectively.

 

This morning, China’s Agricultural Ministry  confirmed a bird flu outbreak at quail farms in Luodian. The outbreak infected 13,103 quails and culled 8,110 birds. This was the second major bird flu outbreak in China this year with the first occurring at the beginning of the month.  It was also reported this morning that the Philippines found a second outbreak of bird flu 50 miles away from the first reported case reported a week ago. Both cases of the bird flu were found in quails.

 

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On Thursday the USDA announced two positive trade developments. The first is that South Korea lifted a ban on U.S. poultry and eggs and the second was that the U.S and Argentina have agreed to a deal allowing the U.S to import pork into their country. This is the first time since 1992 that U.S. pork has been allowed to enter Argentina and should support the longer term fundamentals of the hog market.  

France reported that 79 percent of their corn crop was rated good-to-excellent which was unchanged week over week. They also showed that their soft wheat harvest is wrapped up with 99 percent harvested up 2 percent from this week before.

 

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Weekly Cash Comments

October 13, 2017 | Grain Hedge Insights | Kevin McNew

In the cash market this week there was a bit of buoyancy as river barge markets reverted to more normal pricing and corn harvest ground to a near halt. On the week, soybean basis was up 2 cents while corn basis posted a modest 1-cent advance.

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