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July 11, 2018 | Grain Hedge Insights | Kevin McNew | Views: 354

Heat Advisory in Effect for Parts of Western Corn Belt

Grains Down in the Overnight

Heat Advisory in Effect for Parts of Western Corn Belt

President Trump Threatens China with Additional $200 Billion In Tariffs

On Tuesday afternoon, President Trump proposed to escalate the trade war with another 10% tariff on $200 billion worth of Chinese goods. The White House’s list of proposed goods include tires, coal, aluminum, steel, and industrial chemicals, as well as various consumer goods such as golf bags, women’s make-up, and baseball gloves. US Trade Representative Robert Lighthizer said that China is not taking the US’s “legitimate concerns” seriously and that China’s decision to retaliate against last week’s $34 billion tariffs had “no justification”.

Brazil To Import 10% More Wheat From Argentina In 2019

Brazil is expected to import 5.5 MMT of Argentine wheat in 2019, according to the Buenos Aires provincial agricultural minister Leonardo Sarquis, whom had just met with Brazilian importers in Sao Paulo. As of the end of March, Brazil had already imported 2.5 MMT of wheat of their projected 4 MMT. The Argentine expected wheat acreage is 15.07 million acres and the crop is currently 69.2% planted.

Heat Advisory In Effect For Parts Of The Western Corn Belt

An existing heat advisory that covered E Kansas and W Missouri has been expanded to include E Nebraska, E South Dakota, and W Iowa. Temps are expected to be in the mid 90s with the heat index to reach 105 degrees F.

While the parts of KS and MO affected have seen some significant drought stress, according to the National Weather Service, E NE/SD and W IA have seen 6 times the normal amount of rainfall.

USDA WASDE Report to be Released Thursday, July 12 At 11 PM CST

Analysts expect a slight build in old crop stocks for both corn and soybeans and a more significant build-up of new crop for corn, beans, and wheat. The USDA is also expected to increase their corn yield and production numbers, likely due to the excellent growing conditions seen across the Midwest. This Monday, the USDA pegged corn at 75% G/E and 37% silked.

 

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

July 10, 2018 | Grain Hedge Insights | Kevin McNew | Views: 267

Crop Conditions Slip

Wheat down in the overnight session

Crop Conditions Slip

Crop Conditions Slip for Corn but Stable for Beans

USDA pegged the US corn crop at 75% good-to-excellent. That was off 1% from last week’s reading but still well above last year’s mark of 65%. The corn crop was 37% pollinated, up 20% from last week and ahead of last year’s pace which was 19%. For soybeans, ratings held steady on the week at 71% good-to-excellent. That’s also above last year which was 62%

Export Sales Activity

Export sales of 113,000 metric tons of corn for delivery to Egypt. Of the total 60,000 metric tons is for delivery during the 2017/2018 marketing year and 53,000 metric tons is for delivery during the 2018/2019 marketing year. And, cancellations of export sales of 152,000 tons of grain sorghum for delivery to Mexico during the 2017/2018 marketing year.

French Wheat Crop Better than Expected

France’s Minister of Ag put its first wheat crop estimate of the year at 36.1 MMT, down a tick from 36.6 MMT in 2017. The production forecast was based on an estimated yield of 7.30 tonnes per hectare (t/ha), down from 7.36 t/ha last year, and a crop area of 4.94 million hectares, down from 4.97 million in 2017. Extreme temperature variations and excess moisture during spring had caused some concern about the crop. Last week private firm Strategie Grains had forecasted the crop size at 33 MMT.

El Nino on the Horizon?

The El Nino weather phase is getting closer to being a reality as warmer waters start to form over the equator. Meteorologists don’t expect an “official” declaration of El Nino until the fall as it takes several months for readings to persist. But the Niño 3.4 Region is approaching the El Niño threshold as it sits at a value of +0.4°C on 09 July, and may very well cross the threshold before July ends on the current warming trajectory that has been in place since April. That would set the stage for potential crop disrupting weather in the Southern Hemisphere. El Nino weather tends to be drier than normal in crop growing regions of Brazil, Australia and South Africa, while Argentina can be prone to flooding during this phase.

 

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

July 10, 2018 | Coach’s Corner | Greg Martinelli | Views: 479

How to Be Productive in the Dead of Summer

Two strategies to fight off the drop in productivity

How to Be Productive in the Dead of Summer

Everyone refers to the dead of winter as a slow time of the year.  However, in agribusiness, winter is often the busiest.  Crop production is done and planning for the next crop year is in full swing.  Producers get their yield reports finalized and want to plan out the next year.  Poultry isn’t nearly as seasonal as it used to be, but following Thanksgiving, many turkey producers finally have time to meet and plan for the next year.  Winter is also show season for agribusiness. From January through March, it’s one trade show or vendor meeting after another.

So, if winter is busy, when does it slow down. For many of us, it should be called the dead of summer, which is right now. I know there is still plenty to be done:  crop scouting, animal and crop disease issues, etc.  However, farmers are busy and barely have time for more than a quick check-in discussion as they work.  For you, this is execution time. They need your company to execute on all the promises made when they bought from you. However, this is also vacation time in agribusiness. Many of the key people in our offices, elevators, feed mills, trucking and manufacturing plants will take a much-needed vacation.  Even you (a salesperson) might be heading for the beach somewhere far from the Midwest so you can disconnect, rest and recharge your batteries. 

Another contributor to the dead of summer is the end of your company’s fiscal year.  June 1 is often the beginning of the new fiscal year for many in agribusiness.  his can be a busy time internally for us:  new budgets, new programs, employee changes as people retire or get promoted, and the dreaded annual review process. Then we follow a busy June with a lightning fast July. 

I read recently, the productivity drop that goes on in business during the summer months can be as high as 30%. While it’s hard to measure, let’s look at a few things that will happen in an agribusiness over the next couple weeks. 

By the time we come off the fourth of July holiday, it’s one person on vacation after another.  Don’t get me wrong, I think vacation is great and everyone needs their time away to disconnect and recharge.  However, it all seems to hit at once.  The struggle in agribusiness is that we are typically not overstaffed.  For many important tasks, there is only one person who does that job.  Think about grain settlements in an elevator or reversing an invoice with multiple transactions.  Think about the pellet mill operator, who is part machine operator and part artist in making a good pellet.  How many people know how to correct an inventory error in the system across months or even worse across fiscal years?  “Mary” is the only one that knows how to do that!  And no one is going to touch the program that “Mary” runs.  So, while “Mary” is gone for several weeks this month, your inventory and ordering are off.

While it’s difficult to eliminate the productivity loss when key people go on vacation, take a few steps ahead of time to reduce the productivity drop.  As a salesperson, sales manager or leader in your business, take the initiative to plan for it.

How to reduce the productivity loss as much as possible:

  1. Cross Train: I mean really cross train.  I know you made it mandatory that everyone does some form of cross training.  However, most of the time it involves one person going over to the other person’s work area and watching how the task is done.  That’s not cross training.  That’s observing.  Establish a set of critical actions that your business must be able to accomplish.  Examples are buying inventory, order entry, customer invoicing and company financial transactions.  In operations, look at the really critical roles that require judgement calls.  These seem to be the trouble areas when key people go on vacation.  Require the individual getting cross trained, to actually sit in the seat and operate the piece of equipment or computer program and do the job.  Ensure there is a smooth transition between these two individuals before the vacation starts.
  2. Bring in people from other areas/departments: If another location in your area or neighboring area has a full staff, consider asking one of them to come over and help while your key employee is on vacation.  This seems to be a struggle in agribusiness.  I used to think it was because operations managers were too proud or shy to ask for help.  However, I’m more convinced now, they are just busy and don’t think of it.  If running a piece of equipment is so difficult that only one or two people in a location know how to do it, reach out to your neighboring plant that has several operators and ask them to help fill in.  I’ve seen one elevator working like crazy trying to load a rail car while four employees at a nearby elevator were mostly standing around. 
  3. Salespeople on vacation:  When you office from home, people seem to think you have a lot of free time and don’t need time away from work.  They see your car in the driveway and think, “Wow, must be nice to be in sales.”  The reality is that when you office from home, you have to be disciplined about your hours or you will never stop working.  The early hours before everyone in the house wakes up, the late hours after everyone goes to bed or maybe a few minutes on the weekend to “check emails”.  They can wear you down and you need to take some well-deserved time away. 

But how, if you play a key role in your customer’s business?

  • Plan for it: let your key customers know ahead of time. 
  • Let them know you will be unavailable. This is important as there are always those customers that don’t care or don’t remember you are on vacation and will contact you anyway.
  • Lastly and most importantly -- be unavailable! If you even think about answering the phone, replying to an email or texting -- don’t! 

As you walk through your office in the next couple weeks or maybe sit on a beach somewhere far away, feel good in the fact that people are disconnecting and recharging.  Hopefully, with a little planning and cross-training, you and your fellow vacationers didn’t leave behind a mess that will take weeks to dig out of when you return.

Most importantly, your customers won’t see the that normal drop in your service level that happens about this time every year.

July 09, 2018 | Grain Hedge Insights | Kevin McNew | Views: 455

China Cancels Soybean Purchases

Trump: U.S. may place more tariffs on $500B worth of goods

China Cancels Soybean Purchases

China Cancels Soybean Purchases as Trade War Drags On

Last Friday, the official start date of U.S. and Chinese tariffs, China cancelled all purchases of soybeans for the 2017-18 and 2018-19 marketing years, totalling 432,000 MT. Nov beans were down -9.75 cents in the overnight.

President Trump also said last week that the U.S. may escalate things further with another round of tariffs on $500 billion worth of goods.

Export Sales Announcement

Private exporters reported to the U.S. Department of Agriculture export sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.

EPA Chief Scott Pruitt Resigns,Replacement Brings Optimism to Ethanol

EPA head Scott Pruitt resigned from his post, citing the toll the public spotlight has taken on him and has family following ethical inquiries from Congress. Pruitt had pushed President Trump’s agenda of environmental protection rollback and appeased the oil industry in regards to the Renewable Fuel Standard. Andrew Wheeler was Deputy Administrator of the EPA and is set to replace Pruitt. He has previously consulted for ADM and Growth Energy, an ethanol producers association. Under Pruitt, the EPA had approved mass waivers for oil refineries from their annual blending requirements of ethanol and other biofuels.

Rains, High Temps Anticipated Throughout Midwest This Week

Although flooding remains an issue in SE Nebraska and SW Iowa, the Western Corn Belt can expect at least an inch of rain this week. In the east, Illinois, Indiana, and Ohio are expecting a few inches of rain but shouldn’t expect too severe of storms. Triple digit temps are slated for the entire Midwest and the coming rain should offset any drought or heat stress.

 

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July 06, 2018 | Grain Hedge Insights | Kevin McNew | Views: 451

Weekly Cash Commentary

Cash Commentary for Week Ending July 06

Weekly Cash Commentary

Grain basis got a lift this week with US average corn values up 3 cents and soy up 4 cents.

 

Soy basis was the big winner thanks to dual strengths from the processing and export channels. Soy plants as a group were up 4 cents, with pushes becoming common in the Western Cornbelt. Soy crush margins continue to be record high for this time of year, and with the trade-distorting tariffs in play, US soy crush facilities are a prime beneficiary of lower domestic soy prices while their competitors in South America face escalating soy prices. River terminals also were higher on the week thanks to a modest lift at the Gulf this week.

 

In the corn market, Missouri continues to see a strong basis as pushes there try to stimulate flow into feed buyers. Ethanol plants also were stronger on the week, with a 3-cent average gain across the group. River terminals however were unchanged on the week.

 

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

July 05, 2018 | Grain Hedge Insights | Cody Bills | Views: 422

Heat Advisories in Effect for Illinois and Indiana

Export Data Delayed until Friday

Heat Advisories in Effect for Illinois and Indiana

China Will “Absolutely Not” Fire The First Shot In A Trade War

Beijing is 12 hours ahead of Washington D.C, and with both sides set to implement tariffs at 12:01 AM on Friday, July 6, the Chinese Finance Ministry clarified their position. The Ministry said that they will respond to US tariffs but will not do so before the Americans. This Friday will see both the US and China put on reciprocal 25% tariffs on $34 billion worth of goods. President Trump has threatened to increase tariffs to $400 billion if Beijing retaliates further.

Export Sales Announcements

Optional origin sales of 137,000 metric tons of corn for delivery to South Korea during the 2018/2019 marketing year.  An optional origin contract provides that the origin of the commodity may be the U.S. or one or more other exporting countries.

Brazilian Corn Export Estimate Likely To Dip Below 30 Million Tonnes

Anec, the Brazilian grain exporters association, currently has their export projection pegged at 30 MMT but that is expected to fall to 28 MMT later this month. Rising freight costs following massive trucker protests have been a result of price floors put in place by the government to appease the transportation unions. High truck rates and dwindling supplies due to a weak corn crop have led to no farmer corn purchases at Brazilian ports in 40 days.

High Temps Scorch The ECB But Rains Fall In The West

Heat advisories are in effect for almost all of Illinois and Indiana. Temps in C Illinois are expected to be in the mid to upper 90s today but the heat index could hit 109 degrees F. Light rains are forecast for C Nebraska and E South Dakota through the end of this week. Heat advisories are also in place for SE Missouri, E Arkansas, N Mississippi, and regions in Ohio, Kentucky, and Tennessee.

Export Data Delayed Until Friday, July 6 Due To Holiday

 

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

July 03, 2018 | Grain Hedge Insights | Kevin McNew | Views: 492

Crop Conditions Slip

Grains Were Up in the Overnight Session

Crop Conditions Slip

Condition Ratings Slip

Some extended heat last week took a modest toll on crop ratings. Corn came in at 76% good-to-excellent, 1% lower than last week. The corn crop was also pegged at 17% reaching pollination, up from last week’s reading of 12% and ahead of the 9% 5-year avg pace. Soybeans also dipped but by 2%, hitting 71% on the week. IA saw the biggest erosion of key states as both corn and bean ratings slipped 3%, but overall the crops are still exceptionally favorable at 78% and 76%, respectively for corn and beans.

Soy Crush Continues to Be Record Strong

USDA’s monthly soy crush estimate for May came in at 172 MB, well above the same month last year which was 158 MB. Record high processing margins are keeping plants running at full capacity and should keep crushings solid for the rest of the marketing year. FBN projects final 2017 soy crush to come in at 2,030 MB, up from USDA’s current forecast of 2,015 MB.

Crop Problems Mount in Russia

Moscow-based agriculture consultancy IKAR lowered its corn forecast to 12.3 MMT from 12.8 MMT citing unfavourable weather conditions in southern regions. Russia corn growing regions will see limited rains over the next 10 days, stressing 2/3 of belt as temperatures trend slightly above normal.

This comes after Russia’s State Weather Forecaster said they expect the wheat crop there to be down 10 to 15% from last year, underscoring the widespread problems the major ag producer is facing this growing season.  

Risk of an El Nino Increases

Australia's Bureau of Meteorology said on Tuesday that the odds of an El Nino weather phase are now at 50% by the end of the year. Dry weather in Australia's spring, which runs from September to November, could curb wheat output there at a time when rains have already been sparse.

 

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

July 02, 2018 | Grain Hedge Insights | Cody Bills | Views: 330

Managed Money Continues Selling Spree

Grains Mixed in the Overnight Session

Managed Money Continues Selling Spree

Leftist Candidate Wins Mexican Presidential Election Amid NAFTA Renegotiation

Andres Manuel Lopez Obrador, known colloquially as AMLO, was shown leading in the exit polls and several of his rivals had conceded the race. AMLO is considered to be a left-wing, populist outsider and will take over NAFTA negotiation duties from current President Nieto. AMLO and the coalition party he represents seeks to reduce corruption, nationalization of industry, and opposition to Trump and his border control policies.

Managed Money Continues Selling Spree, Increase Short Positions For Corn And Beans

MM sold corn heavily last week, taking their net short positions down to -60,319, compared to -14,038 last week. Strong growing conditions and the trade war remain the culprits. For soybeans, MM is now -43,985 contracts net short, -12,801 last week. Last Friday’s USDA Quarterly Stocks and Acreage Report would not have been factored into this week’s Commitment of Traders. Chicago wheat also saw more selling, with MM’s net short going from -752 last week to -12,477. Managed money remains net long for KC wheat but funds sold 16,331 contracts for a total of 30,882 longs.

ADM Looks To Buy French Animal Feed Company for $1.75 Billion

ADM is looking to increase its presence in the animal protein sector through its acquisition of Neovia, a French animal nutrition firm. Pierre-Christophe Duprat, ADM President of Europe, Middle East, and Africa, says that the purchase would give ADM a more “global approach” in how they seek to expand their feed and grain business. Neovia is said to be sold for 1.5 billion euros or $1.75 billion. They currently employ 8,200 people and reported sales of 1.7 billion euros in 2017.

 

International Grains Council (IGC) Trims Global Estimates For Wheat, Corn

IGC has dropped their global estimate for corn production by 3 MMT to 1.052 billion tonnes due to poor weather in Russia and the EU. The inter-governmental group also cut their wheat outlook by 5 MMT to 737 MMT, as Russian growing conditions have remained sub-optimal.

 

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

June 28, 2018 | Grain Hedge Insights | Kevin McNew | Views: 517

New Crop Corn & Bean Export Sales Surpass Expectations

Grains Mixed in the Overnight Session

New Crop Corn & Bean Export Sales Surpass Expectations

President Trump to Use a Softer Touch on Halting Chinese Tech Investment

Trump announced yesterday that he will use a US national security panel to prevent Chinese purchases of American tech companies. These controls put in place by the Committee on Foreign Investment in the United States (CFIUS) have authority from Congressional approval and would not simply be specific to China. This is seen as a win for Treasury Secy Steven Mnuchin, who prefers a less aggressive curb of Chinese tech acquisition. This method of enforcing the Foreign Investment Risk Review Modernization Act will not prevent the implementation of $34 billion worth of tariffs on July 6.

 

New Crop Corn and Bean Export Sales Surpass Expectations

Sales for new crop corn were 87% higher over last week. South Korea, Mexico, and Japan made up a majority of the purchases for the week. New crop soybean sales were up 182% over last week as bargain buyers enter the market. Pakistan, Thailand, and Mexico constituted the bulk of sales.

 

Actual

Estimated

Last Week

Wheat

563.7

250-500

461.6

Corn-OC

849.9

600-1,000

165.9

Corn-NC

636.8

200-400

339.7

Soybeans-OC

358.5

300-600

301.7

Soybeans-NC

642.3

100-400

227.6

Soymeal-OC

146.3

100-250

115.1

Soymeal-NC

75.5

0-50

5

 

Chinese Ag Science Board Meeting Seen as Good Sign for GMO Imports

A Chinese scientific advisory board met for the first time in a year, a potential signal that China may be preparing to accept new GMO crops for import. Crops waiting for approval are 2 types of soybeans and 1 of canola from Dow DuPont and 2 alfalfa and 3 canola varieties from Bayer/Monsanto. GMOs are not allowed to be planted in China but some are approved for import. China is seeking to originate crops from outside of the US and may speed up the approval process to meet demand.

 

 

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

June 27, 2018 | Grain Hedge Insights | Kevin McNew | Views: 325

Grains Stronger in Overnight Session

USDA Acreage and Quarterly Stocks report out Friday

Grains Stronger in Overnight Session

Grains Stronger Overnight as Trade Prepares for USDA Report on Friday

New crop corn and beans were up 1.75 and 9.00 cents respectively in the overnight session. Jul SRW and HRW were both up 4.25. Winter wheat harvest is 41% complete, compared to the 5 yr average of 33%. This Friday at 11am CST is the USDA’s acreage and quarterly stocks report. Traders anticipate a build in corn and soybean stocks and a slight draw in wheat stockpiles.

Sonny Perdue Says Farmers Understand Why Trump Is Taking China To Task On Trade

Speaking to a trade show of produce farmers in Chicago, Ag Secretary Perdue said that though farmers are bearing the brunt of the trade war so far, that they understand that China has not embraced free trade and need to be held accountable. Perdue also said that President Trump has authorized him to protect farmers’ economic interests and that increased loans and direct payments via the Commodity Credit Corp may be major tools in doing so. Secy Perdue has stated that he will not show his hand before the USDA officially announces any plans to protect farmers.

China Allows Imports of British Beef

Finance Minister Philip Hammond and Vice Premier Hu Chunhua have announced that China has lifted a ban on UK beef over concerns of mad cow disease over 20 years ago. This follows the news from earlier this week that China has also removed the ban on French beef as the trade war with the US has China looking elsewhere for agricultural commodities.

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

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