July 26, 2016 | Kevin McNew | Views: 268
July 26, 2016 | Grain Hedge Insights | Kevin McNew | Views: 176

Crude Oil Continues Its Slump

USDA Crop Progress Report shows corn and soybean conditions unchanged for the week.

Grains were mixed overnight with wheat lower while corn and soybeans had modest advances in the overnight session. Crude oil continued to slump adding to yesterday’s sharp losses.

 

Yesterday after the close USDA’s crop progress report showed both corn and soybean condition ratings unchanged for the week at 76% and 71%, respectively. Also, both crops are developing ahead of normal. Corn is currently 79% silking versus a 5-year average of 70% while beans are 76% blooming versus 66% for normally for this time of year.

 

In world news, China has experienced heavy rains of late bring 6 to 9 inches in core corn producing areas of North China. While difficult to assess immediate damage to the corn crop, rain of this intensity has likely resulted in some widespread flooding across much of the region. The situation could be made even worse if the heavy rainfall were to continue over the next several weeks, but a dry and pattern would allow fields to dry down more rapidly.

 

The European Union's crop-monitoring service (MARS) raised its forecast slightly for the average soft wheat yield in this year's EU harvest as a sharp increase in the projection for Bulgaria offset a cut in rain-affected France. In its monthly report the MARS service pegged the average EU soft wheat yield at 6.10 tonnes per hectare (t/ha), up from 6.07 t/ha seen in June. The estimate was 2.9% below last year's yield but 4.6% above the five-year average. MARS cut its soft wheat yield estimate for France, whose wheat crop has been hit by torrential rain in the spring and low sunshine, to 7.37 t/ha, from 7.45 t/ha estimated last month. It would be 6.9 percent below 2015, but 0.5 percent above the five-year average.

 

Oil on Tuesday hit its lowest mark since May, falling towards $44 a barrel, pressured by concerns that a long-awaited rebalancing of the market would be delayed due to excess supply. Record crude output from the Organization of the Petroleum Exporting Countries, a glut of refined products and signs of more drilling activity in the United States in the face of low oil prices have added to concern about excess supply. U.S. drillers added oil rigs for a fourth consecutive week and traders fear continued increases would threaten a market weighed by excess supply for two years.

 

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July 25, 2016 | Grain Hedge Insights | | Views: 230
July 25, 2016 | Grain Hedge Insights | Kevin McNew | Views: 164

Morning Commentary -July 25

Soybeans was a leader to the downside

Soybeans was a leader to the downside this losing 51.25 cents. Compared to soybeans, corn and wheat were down modestly, off 23.5 and 16.25 respectively.

 

Weather models continue to show a wet and cooling trend from the recent heat wave. Temperatures should return to seasonal norms by early next week and even dip below normal by late next week.

 

USDA's crop progress report on Monday showed no material changes in crop conditions with both corn and soybean crop ratings holding steady at 76% and 71%, respectively from the previous week. Spring wheat dropped 1% to 69%. But the overall trend is still better crops ratings than what traders have been expecting as well as conditions that are generally better than last year.

 

US Exports were mixed this week. Old and new crop corn came in slightly lower than analysts expectations. Old crop soybeans were in line with expectations, but new crop came in almost 300,000 MT above expectations.

 

Wheat exports have the potential to increase in the next few months. News out of Europe points to disappointing yields with French wheat yield estimates at the lowest seen in 13 years.

 

Crude oil continues to move lower. Rebalancing may take longer than expected as huge amounts of crude remain in vessels at sea and storage tanks on land. Data from the U.S. Energy Information Administration also showed a surprise build in supplies of the motor fuel despite forecasts of American drivers hitting the road in record numbers this summer.

 

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July 22, 2016 | Grain Hedge Insights | Kevin McNew | Views: 230

Weekly Cash Comments

Weekly Cash Commentary for week ending 07/22/2016

Ethanol plants saw a slight rise higher this week up 1.5 cents per bushel. Ethanol production continues to stay strong, particularly in the midwest where we saw the highest production numbers this month. Corn along the river saw an average increase of 3.5 cents per bushel even with old crop and new crop exports coming in below expectations.


Plummeting futures prices kept soybean basis levels mostly stable to slightly stronger across some sectors this week. River terminals as a group were steady as old-crop business starts to trickle off. However, crush plants moved higher by 3.2 cents a bushel on the week.

 

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July 22, 2016 | Grain Hedge Insights | Kevin McNew | Views: 299

Positive Signs for US Wheat

World news lends support to the wheat market, while temperatures back off recent highs.

Weather models continue to show a wet and cooling trend from the recent heat wave. Temperatures should return to seasonal norms by early next week and even dip below normal by late next week.

 

Yesterday after the close, Argentina’s government bumped up forecasts for the corn and bean crop for the 2015/16 marketing year. They pegged the soybean crop at 58.8 MMT vs 58.0 previously while the corn crop was projected to be 39.8 MMT versus a previous estimate of 37.9 MMT

 

Wheat prospects deteriorated sharply in Europe in recent weeks due to worse than expected damage from heavy spring rain, prompting analysts to slash crop estimates with French output seen at its lowest in 13 years. Consultancy ODA Groupe expects the 2016 crop in the largest EU wheat producer and exporter to be less than 30 million tonnes, down from 32 million pegged last week and 35 million estimated on July 6. If realized, that would be the lowest French wheat harvest since 2003 and is far below the record 2015 crop of nearly 41 million tonnes.

 

Crude futures were on track for weekly losses on Friday as investors reassessed U.S. data on oil stocks and excesses in oil products in Europe and Asia. While many expect global oversupply of oil to ease in the near term, huge amounts of crude remain in vessels at sea and storage tanks on land as the rebalancing takes longer than some had anticipated. While U.S. production has been falling, crude inventories are at 519.5 million barrels, historically high for this time of year according to EIA.

 

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

July 21, 2016 | Grain Hedge Insights | Kevin McNew | Views: 373
July 21, 2016 | Grain Hedge Insights | Kevin McNew | Views: 293

Grains Find Modest Strength in the Overnight

Equities, Crude and the US Dollar were Lower

Grains Find Modest Strength in the Overnight

Grains found modest support overnight trying to recover from the steep losses accumulated over the past three trade sessions. In outside markets, equities were lower as was crude oil and the US dollar.

 

Current weather models continue to point to a return to normal temperatures after today and Friday’s heat wave thru the Midwest.  The latest model shows heavier precip mid next week versus the model 24 hours ago.

In overnight news, Japan bought 165,048 MT in a regular wheat tender. Most of that or 99,473 MT was with the US, while the remainder was to Canada and Australia. South Korea’s state-run Korea Agro-Fisheries & Food Trade Corp. has purchased 20,000 tonnes of soybeans to be sourced from the United States and Canada in an international tender which took place on Thursday, European traders said.

 

Oil prices rose as much as 1 percent on Wednesday, lifting U.S. crude from two-month lows, after the U.S. government reported a ninth straight week of crude inventory draws, easing some concerns in a market worried about a glut. U.S. gasoline prices, however, hit four-month lows after the data from the U.S. Energy Information Administration also showed a surprise build in supplies of the motor fuel despite forecasts of American drivers hitting the road in record numbers this summer.

 

WEEKLY EXPORT SALES

 

 

                                OC-Act             OC-Exp         NC-Act         NC-Exp

Corn                            345              400-600            506          500-700

Soybeans                     325              300-500          1,001         500-700

Wheat                                                                    478          350-550


 

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

July 20, 2016 | Grain Hedge Insights | Kevin McNew | Views: 404
July 20, 2016 | Grain Hedge Insights | Kevin McNew | Views: 301

Crude Oil Holding Ground at 10-Week Low

Grains posted anemic gains in the overnight session.

Grains posted anemic gains overnight after yesterday’s sharp sell-off.  Equity futures were up overnight and crude oil was hovering around unchanged waiting for fresh EIA inventory data later this morning.

 

The latest weather models show hot weather on Thursday and Friday in the Midwest, but subsiding after that.  By early next week high temps are expected to be 7 degrees lower and by late next week be as much as 10 degrees lower. Rain also appears to be most likely this weekend into next week in the heart of the Corn Belt.

In overnight news, a South Korea feed buyer bought 70,000 MT of optional origin corn. Jordan passed on its tender aiming to buy 100,000 MT of wheat while Syria bought 200,000 MT of Russian wheat.

 

Crude oil is holding ground at a 10-week low, after the American Petroleum Institute reported that U.S. crude supplies fell by 2.3 million barrels for the week ended July 15, according to sources. The closely watched Energy Information Administration report will be released Wednesday. Analysts polled by S&P Global Platts forecast a decline of 1.25 million barrels for crude inventories.

 

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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