December 27, 2017 | Grain Hedge Insights | Kevin McNew | Views: 562

Soybeans Rise on Dry Weather in Argentina

Short-Covering Rally in Soybeans Yesterday

In the overnight session the grains were mixed with March corn down ¾ of a cent, January soybeans up 3 ½ cents and March wheat down ¼ penny. Wheat has closed lower over the last two trade sessions, but price declines have been limited due to the frigid temperatures expected throughout the plains in the coming week. The weather throughout the Hard Red Winter Wheat region is supposed to turn cold into January 2nd which could damage dormant winter crop unprotected by a sufficient blanket of snow such as the Northern Texas Panhandle and parts of Oklahoma.

 

Exporters Sell 110,000 metric tons of Soybeans for delivery to China during the 2017/2018 marketing year. -USDA


 

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Precipitation throughout Argentina is expected over the weekend starting in the south and moving to the north. Traders have remained concerned about the crop due to the hot temperatures this week and the because this weeks precipitation has been mostly isolated. It will be important for rain to materialize this weekend because on Monday weather is expected to turn dry again with the next chance at rain being on the 5th and 6th of January. If the forecast precipitation is not received this weekend in Argentina there is fear that some farmers may experience even further planting delays. In the most recent report from the Buenos Aires Grain Exchange, Argentina is 70.9 percent planted for soybeans and 61.2 percent planted for corn.

The short covering rally in soybeans yesterday will likely run into resistance at the $9.63 ¼ price level and again at $9.70. Both price levels were previous areas of support that have been violated and could add additional selling pressure.

 

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December 26, 2017 | Grain Hedge Insights | Kevin McNew | Views: 472

Cattle on Feed Report Released on Friday was Bearish

Wheat is Currently Trading Near a November 28th Price Low

Wheat is currently trading near a November 28th price low which should continue to provide overhead resistance. Corn has advanced nearly 6 cents from the low it printed on December 19th on strong export sales and short covering.

 

The commitment of traders report released on December 22nd showed that Managed Money has moved to a net short position for soybeans, a position we haven’t seen since September 19th. Soybeans went from a previous net long position of 19,755 to a net short position of -40,771 in the Managed Money category. Corn also moved further into a net short position this week in the managed money category, widening to -222,153 last week.  

 

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Winter wheat prices out of the Black Sea region were stable going into the holiday season. FOB prices for 12.5 percent protein for January delivery are priced right around $191 per metric ton. Exports have been huge this year with Russia exporting an estimated 25.5 million metric tons since the beginning of the marketing season, representing a 34 percent increase over last year.

The Cattle on Feed report released on Friday was seen as bearish with all categories reported at or above analyst expectations. All cattle on feed as of December 1st was reported at 108 percent of last year above expectations of 106.7 percent. Placements into feedlots during November were huge, totaling to 2.10 million head which was 114 percent from 2016. Analyst were only expecting around a 5.7 percent increase in placements. Cattle marketed in November met expectations at 3 percent over last year.  


 

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December 22, 2017 | Grain Hedge Insights | Kevin McNew | Views: 695

Export Sales for SRW Wheat Recorded 191,527 This Week

Grains Traded Mixed in the Overnight Session

In the overnight session the grains traded mixed with March corn unchanged, January soybeans up 2 ¾ cents and March Chicago wheat unchanged. Kansas City wheat is up ½ a cent, but is currently trading at a price level where overhead resistance is likely.   

 

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Export sales for SRW wheat recorded 191,527 metric tons this week which was the largest weekly sale of that variety since July 2014. Foreign buyers are looking to US SRW wheat to use as feed as prices have fallen to $175 per metric ton FOB which is currently more competitive than Russian wheat with the same protein level. Chicago wheat prices have been sliding lower all fall printing a most recent low at $4.10 ½  cents per bushel on December 11th. The recent prices have enticed some buyers and animal feeders to lock in attractive protein levels.  

  

 

The latest weather models shows that conditions in Brazil will be favorable for the corn and soybean crop over the next two weeks. However, areas such as Bahia, northeast Minas Gerais and Rio Grande do Sul are all drier than the rest of Brazil. Forecasts for precipitation next week should resolve some of that dryness next weekend. Argentina is forecast to have precipitation over the weekend with another precipitation event in the forecast for next Friday through Sunday.


 

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

December 21, 2017 | Grain Hedge Insights | Kevin McNew | Views: 574

Strong Export Sales Reported This Morning

Grains Traded Lower in the Overnight Session

In the overnight session the grains are trading lower with March corn down ¾ of a cent, January soybeans down 2 ¼ cents and March Chicago wheat down 1 cent. Kansas wheat is down 1 ½ cents this morning after six days of drifting higher due to a forecast for a cold snap in the HRW growing region at the end of December. The slight rebound we have seen over the last week will likely run into overhead resistance at the November 28th low of $4.22.

 

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Yesterday it was announced by the USDA that China is reducing the amount of foreign material allowed in shipments of U.S soybeans starting the first of the year. Shipments that contain less than 1 percent FM will be processed quickly while cargo’s of soybeans that test greater than 1 percent FM will be investigated further. The standard quality specification for No. 2 yellow soybeans allows for up to 2 percent FM which will add further frustration to grain exporters and may even curb imports. Ensuring that soybeans contain less than 1 percent FM will add cost to our exports which may reduce how competitive we are with South America.

 

The EIA announced ethanol production dipped last week to 1.077 million barrels per day from 1.089 million bpd. Despite the decline this is well over last years production during the same time period. Weekly stocks also declined slightly to 937 million gallons from 940 last week. Weekly stocks continue to be sharply higher than last year during Mid-December.

 

Strong export sales numbers released this morning for the period between December 8th and 14th. Wheat sales were reported at 796,300 metric tons which was a marketing year high for the grain. Net corn sales were reported at 1,558,300 metric tons which was up 80 percent from the previous week. Soybeans sales also increased compared to last week, booking 1,742,900 metric tons of sales.

 

Weekly Export Sales-

  

    Actual

  Estimated

Wheat - NC   

    796

  300-600

Corn - OC

    1,558

  800-1,100

Soybeans - OC

    1,742

  1,300-1,800

 

 

 

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December 20, 2017 | Grain Hedge Insights | Kevin McNew | Views: 430

Strong Soybean Exports out of Brazil

Grains Were Mixed in the Overnight Session

In the overnight session the grains were mixed with March corn up ¾ of a cent, January soybeans up 2 ½ cents and March Chicago wheat down 1 ¼ cents. Since December 5th, soybean prices have been on a steady decline, breaking through support and pushing to lows we haven’t seen since September. Look for any rebound to be met with resistance around the $9.66 ½ price level.   

 

South America continues to get the necessary precipitation to alleviate crop production concerns. Northern Argentina should receive good precipitation on Friday and into the weekend, while the central and southern production areas should receive precipitation from Wednesday through Friday. More precipitation is expected in Argentina next week.   

 

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The latest weather models call for colder temperatures in the Hard Red Winter wheat region between December 25th and 26th. Snow expected throughout Colorado and Nebraska will help protect some of the crop from the most extreme temperatures, but the cold snap will leave some areas vulnerable especially if the snow doesn’t materialize.

Soybean exports out of Brazil have been strong during a season when they typically slow down and exports shift the the U.S shores. Brazil’s mid-month port lineups show 1 million metric tons more soybeans on the docket than in 2015. Exports are running more smoothly this year as improvements at major ports and exporters have used Northern Brazil ports more. Corn exports in Brazil are lagging significantly with just under half the corn lined up in December compared to the 2015 marketing year. The lower corn sales are a result of record exports from July through September combined with Brazilian farmers unwilling to sell their corn at these prices.    

 

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December 19, 2017 | Grain Hedge Insights | Kevin McNew | Views: 541

Chicago Soybean Futures Edge Lower on Tuesday

Grains Mostly Steady in the Overnight Session

In the overnight session the grains were mostly steady with March corn unchanged, January soybeans up ¼ of a penny and March Chicago Wheat down ½ of a cent. January soybeans pushed through November 14th lows yesterday after precipitation over the weekend and expectations for more rain later on this week pulled prices lower. The market will continue to focus on South American weather in the coming weeks.

 

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Safras & Mercado a Brazilian consultancy lowered their 2017-18 Brazilian soybean production estimate to 114.57 million metric tons from 114.7 million metric tons in October. The revision was due to a slight decline in soybean acreage. The current USDA forecast estimates Brazil’s 2016-17 production at 114.10 million metric tons after a near perfect growing season.

 

In an Iraqi tender to purchase 50,000 metric tons of hard milling wheat the U.S wheat was the most competitively priced at $283.73 per metric ton. The tender was offered to Canada, Australia and the US and closed on Tuesday. Australian wheat was offered at $288.80 per metric ton and Canadian wheat was offered at $295 per metric ton.

Domestic wheat prices are focusing on the cold weather expected in the last week of December. Traders are concerned that the delayed planting and dry weather could leave the crop exposed and more vulnerable than normal to a cold snap.     

 

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

December 18, 2017 | Grain Hedge Insights | Kevin McNew | Views: 567

Grains Trade Higher in the Overnight Session

Colder Temperatures Expected Last Week of December for Southern Plains

In the overnight session the grains traded mostly higher with December corn up 1 cent, January soybeans up 2 ½ cents and March Chicago wheat up 4 ½ cents. Wheat is now on its 4th day rebounding from lows printed on December 12th. Overhead resistance is around $4.24 ¼ which was a previous low in the downtrend in wheat that resumed in September.  

 

Exporters sell 396,000 metric tons of soybeans for delivery to China during the 2017/2018 marketing year. Exporters sell 168,000 metric tons of grain sorghum for delivery to China during the 2017/2018 marketing year. - USDA

 

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Argentina received rain over the weekend with around 1-2.4 inches from central Santa Fe and Southwestern Entre Rios to eastern Buenos Aires and southeastern Uruguay. Temperatures are expected to be seasonable this week with next week temperatures warming slightly. Precipitation is expected again this week, primarily Friday and Saturday and should provide .75 to 2 inches in the central corn and soybean producing regions.

 

Meteorologists are calling for colder temperatures in the last week of December throughout the southern plains. Early models suggesting temperatures could fall below zero Fahrenheit. HRW wheat will be vulnerable to freeze damage after this years planting season was delayed by heavy rain in October followed by persistent dryness. According to the drought monitor, the entire state of Kansas is abundantly dry and 1/5th of the state is in Moderate drought.  

Last week the average corn basis in the US increased by two cents for corn and 1 cent for soybeans. Ethanol basis was mixed across the country with double digit gains in MN and SD while basis was weaker in IL and IN. Soybean plants were mostly steady throughout last week, but the Gulf did increase 5 cents which helped river basis for soybeans. Basis at the Gulf declined 5 cents for corn last week.    

 

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December 15, 2017 | Grain Hedge Insights | Kevin McNew | Views: 310

Grains Mostly Unchanged in the Overnight

NOPA Crush Numbers to be Released Today

In the overnight session the grains were mostly unchanged with corn up ½ a cent, soybeans up 3 ½ cents and wheat up ¾ of a cent. Soybeans traded sharply lower yesterday after recent weather models show improved precipitation in Argentina for the weekend. January soybeans are now trading near November 14th lows which may provide some support during the trading session in the short term.

 

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The NOPA crush numbers will be released today at 11 AM CST and are expected to show the strongest crushing rate on record for this month. Analysts are expecting to see 163.191 million bushels crushed in the month of November which would be a slight decrease from the 164.242 million bushels crushed in October. Analysts are expecting soy oil stocks to be reported at 1.269 billion pounds, up from 1.224 billion pounds at the end of October.

 

The US government announced that La Nina conditions forecast around an 80 percent chance of developing in the Northern Hemisphere throughout the winter of 2017-18. Expectations are for a transition to Enso Neutral by mid to late spring.


 

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

December 14, 2017 | Grain Hedge Insights | Kevin McNew | Views: 539

Corn and Wheat Remain Mostly Unchanged in the Overnight

Ethanol Production Slipped this Week

In the overnight session corn and wheat remain mostly unchanged but January soybeans is trading 5 ¾ cents lower as Argentina forecasts expect precipitation over the weekend that is likely to provide relief to much of the drought stricken areas of the country.

 

The Argentina state weather service forecast indicates showers throughout Buenos Aires, Santa Fe, San Luis, Cordoba and Entre Rios. The widespread rain over Saturday and Sunday is expected to greatly benefit much of the dry regions and provide necessary moisture to continue the planting process. Last week Farmers in the Pamas region had planted about 40 percent of their soybean acres.

 

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Ethanol production slipped this week to 1.089 million barrels per day from 1.108 million barrels per day last week. Despite the slight decline it is the second highest production on record and is roughly 4.7 percent above last year’s production during the same time period. To date, ethanol production is running ahead of last years pace by 4.1 percent. Ethanol stocks also slid last week to 940 million gallons from 947 million gallons. Despite the slight week over week decline in ethanol stocks the current levels are still up 17 percent year over year.

 

The Federal Reserve increased interest rates by ¼ of a percentage point on Wednesday and kept the rate outlook unchanged.


 

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

December 12, 2017 | Grain Hedge Insights | Kevin McNew | Views: 492

Grains Trade Mixed in the Overnight Session

Exporters Sell Corn to Mexico and Wheat to Algeria

In the overnight session the grains traded mixed with March corn up ½ of a cent, January soybeans down 1 ½ cents and Chicago March wheat up ¾ of a cent. The USDA report will be released today at 11 AM CST. March corn is currently trading near recent lows and any bearish surprise could be enough to break prices another leg lower.

 

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According the the Reuters poll of analyst estimates the average trade guess of 17-18 corn ending stocks 2.478 billion bushels which would be down from 2.487 estimated in November. Analysts are expecting 17-18 ending stocks for soybeans and wheat to be higher than the November forecast with wheat pegged at 938 million and soybeans at 438 million bushels, up from 425 million bushels in November.

 

Exporters sell 120,000 metric tons of Hard Red Winter Wheat for delivery to Algeria during the 2017/2018 marketing year. Exporters sell 152,000 metric tons of Corn for delivery to Mexico during the 2017/2018 marketing year. Exporters sell 168,300 metric tons of Soybeans for delivery to unknown destinations during the 2017/2018 marketing year. - USDA

 

The average trade guess for global ending stocks is to see a slight reduction in wheat, corn and soybeans from November forecast. Analysts are expecting to see wheat ending stocks at 267.07 million metric tons, corn ending stocks at 202.72 million metric tons and soybean ending stocks at 97.82 million metric tons.

 

Analysts are expecting to see revisions lower for corn and soybeans in both Brazil and Argentina. The average trade guess has Argentina corn production at 41.77 million metric tons and soybean production at 56.52 million metric tons. Brazil corn production is expected to be revised lower to 93.26 million metric tons while expectations are for a slight increase in soybean production 108.21 million metric tons.  


 

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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