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April 06, 2018 | Grain Hedge Insights | Kevin McNew | Views: 471

Grains Traded Sharply Lower in the Overnight Session

Weekend Precipitation to Favor KCBT Wheat Belt

Headlines

Trump directs U.S. trade officials to ID tariffs on $100 billion more Chinese imports. Argentina expecting rains this weekend and into next week. Cold temperatures across Mid U.S into next week. WASDE report next Tuesday. Exporters sell 458,000 MT of Soybeans for delivery to unknown destinations of which 327,00 MT is for 2017/2018 delivery and 131,000 MT is for 2018/2019 delivery.-USDA  Exporters sell 130,632 MT of Soybeans for delivery to Mexico of which 65,316 MT is for 2017/2018 delivery and 65,316 MT is for 2018/2019 delivery.-USDA Exporters sell 20,000 MT of Soybean Oil for delivery to unknown destinations during the 2017/2018 marketing year.-USDA Exporters sell 100,000 MT of Corn for delivery to Egypt during the 2017/2018 marketing year.-USDA

 

Trump calls for more tariffs

The market traded sharply lower in the overnight session after the White House directed U.S. trade officials to identify tariffs on $100 billion more Chinese imports. China announced it would counter U.S. protectionism “to the end, and at any cost,” in response. The Trump administration responded stated that China’s retaliation was “unfair”. In a statement on Thursday, Trump said “Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers.” He also stated that the U.S. is still open to discussions “in further support of our commitment to achieving free, fair and reciprocal trade and to protect the technology and intellectual property of American companies and American people.”  China formally launched a WTO challenge against Trump’s first round of proposed tariffs yesterday. The China commerce ministry is scheduled to hold a media briefing at 7AM CST.

 

USDA looking to protect farmers from trade war

The USDA is currently having discussions about ways to protect farmers from the fall-out of a trade war. Secretary Bill Northey stated that there are “a lot of good options out there” and that the USDA needs to “see the reaction of what tariffs will be and what the reaction of markets are”. There have been NO specific proposals yet.

Argentina

Rain is expected each day over the next week.  Rain is expected to impact central and southern production areas of Argentina over the weekend and into Tuesday. Rains will slow corn and soybean dry-down.

 

Plains Wheat

Weekend precipitation favoring southeastern KCBT wheat belt. Temperatures are expected to be colder than normal through Wednesday next week. Cold temperatures on Saturday could damage some plains winter wheat; but, damage is not expected to be major.    

 

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

April 05, 2018 | Grain Hedge Insights | Kevin McNew | Views: 580

Grains Extend Rebound in the Overnight Session

Grains Up This Morning

Headlines

Grains extend rebound in the overnight. Soybean export sales beat expectations. Slow planting progress expected to continue in Delta/Deep south.

 

Weather

Plains wheat remains dry in western KS, southeastern CO, western OK and northwestern TX. Southeastern Plains is forecast to receive moisture in the 6-10 day outlook.  The Delta is expected to continue receiving moisture in the 6-10 day outlook which is expected to continue slowing planting progress.

 

Argentina

Showers and thunderstorms are expected today and into the weekend in central and southern production regions of Argentina. More showers are expected to start in southern Argentina and move north from Monday to Wednesday.

 

Brazil

China’s tariff announcement yesterday drove the Brazilian soybean premium 37% higher after already being at record levels during harvest. Brazil soybean harvest is 72% complete up from 65% last week. This is on par with the average harvest pace of 73% at this time. Brazil harvest of 1st crop corn is 60% complete, up 9% from last week and on par with the average harvest pace of 58%.

Ethanol

Ethanol production was mostly unchanged this week at 1.038 million barrels per day vs LW production of 1.039 mbpd. Production was 1.9 percent ahead of last year during the same week. Production needs to maintain 2.5 percent above last year to meet the USDA’s expectations. If production holds steady around these levels and doesn’t dip during the April May time period, ethanol production has a chance to get back on track to meet USDA’s corn used for ethanol estimates. Ethanol stocks slipped lower last week to 942 million gallons from 957 million gallons the previous week. Stocks are now below last years levels by 54 million gallons    

 

Export Sales

Corn and wheat missed analyst expectations, but soybean sales soared. Corn sales were down 34% from LW and down 50% from the four week average. Wheat sales were down 69 percent from LW and 63% from the four week average. Soybean sales increased from last week with strong sales to unknown destinations and 137,400 MT sold to China.

 

 

Actual

Estimated

Wheat

109

200-500

Corn

898

1,000-1,300

Soybeans

1,133

600-900

 

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

April 04, 2018 | Coach’s Corner | Greg Martinelli | Views: 1160

Just Put Me in Coach!

I’ve been in sales for years, why would I need a coach?

Just Put Me in Coach!

As we wrap up the college basketball season, let’s take some time to reflect on all the time and effort the players put into their skills to be at the championship game.  Years and years of grade school basketball, travelling teams that single sported kids join, camps and clinics; all before they ever even get into high school.  Then it’s four years as a starter on the varsity team, followed by scouting trips and video clips sent to the different colleges.  Congratulations! They are now part of a championship team.  Now, it’s 20 hours minimum and maximum per week of practicing, mandated by the NCAA.  Each and every week for four years, it’s 20 hours to the minute, followed by regular classroom requirements. 

At 22 years old, the seniors on a championship college basketball team could have as much as 14 years of continuous training, practicing and preparation for the game. 

Do you think any one of the coaches of the 64+ teams in the bracket said, “Guys, you’ve been doing this for a long time and I don’t think you are really going to learn anything new?” “Let’s just take this month off from practice”?  Not likely. 

Do you think a single player on any of the 64+ teams in the bracket said, “Coach, I’ve been doing this a long time and I don’t need to practice or prepare?  Just put me in the game.”  Not likely. 

And neither should you!  You have way more at stake than they do. Yes, they are on TV and it’s a big deal, but for you, it’s your livelihood, your career and your financial success at stake.

 

What does a coach do?

  1. Help to establish accountability:  Even when we know what to do, we often don’t do it.  The coach helps to call out this behavior and how it holds us back.
  2. Connect the dots:  We are stuck or don’t see a way forward past the walls we run into.  We don’t see the connection between our behaviors and the results we get from those behaviors.  The coach holds up the mirror so we can see ourselves.
  3. Help us be our authentic selves:  We come to work and painstakingly try to be someone we are not.  The coach draws this struggle out into the discussion and holds you accountable to deal with it.
  4. Take us from good to great:  Given enough time, all of us get good at something.  Then we level off or possibly decline or become obsolete.  The coach keeps us moving to get out of this rut and towards greatness.
  5. Find the answers from within ourselves:  Good coaching is not telling, directing nor giving the answers.  It’s about getting the individual to come up with and see the answers for themselves.
  6. Get us from where we are, to where we want to be:  Like a good GPS, coaching involves a discovery process of first establishing where you are, where you want to go and the possible routes you can take.  And just like a GPS, there are several ways to get from point A to point B.  Some faster.  Some easier.  Some riskier, etc.  You choose which, and a coach reminds you to make your choice and keep moving.

Why does it matter?

It works.  Following the launch of a coaching program, companies feel the investment is worth it.  In a 2013 study by the Richardson Company, they surveyed companies that invested in a coaching program and found 86% affirmed they had a positive ROI from their coaching program.  You can ask the people who received the coaching and you hear similar responses.  All three generations in the work force (Baby Boom, Gen-X and Millennial) felt the impact from coaching was very effective.  You can look at their actual performance and again, you see improvement.  Across all three generations, their actual performance improved as well. 

From the Ken Blanchard Company to the ICF (International Coaching Federation), the below results were consistent.  Coaching helps employees:

  • Establish and take action towards achieving goals
  • Become more self-reliant
  • Gain more job and life satisfaction
  • Contribute more effectively to the team and the organization
  • Take greater responsibility and accountability for actions and commitments
  • Work more easily and productively with others (boss, direct reports, peers)
  • Communicate more effectively

So, whether it’s your 1st or your 21st spring planting in your agribusiness career, consider getting a coach to improve your already good performance in sales.

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

April 04, 2018 | Grain Hedge Insights | Kevin McNew | Views: 471

Grains Sink in the Overnight Session

China Announces 25 Percent Tariffs

Headlines

China tariffs on soybeans sink grains in the overnight. Nov Soybeans fell as low as $9.97 following tariff announcement. Exporters sell 129,000 metric tons of Soybeans for delivery to China during the 2018/2019 marketing year.-USDA Exporters sell 325,000 metric tons of Soybeans for delivery to unknown destinations of which 130,000 MT is for 2017/2018 delivery and 195,000 MT is for 2018/2019 delivery.-USDA

 

China tariffs announced on U.S soybeans

China announced 25 percent tariffs on 105 U.S. products including soybeans, frozen beef and cotton. The list of tariffs also included signature U.S. exports such as Jack Daniels whiskey, Ford automobiles, Tesla electric cars and Gulfstream Jets. China's list of tariffs is a direct response to the Trump administration's plans to add tariffs to $50 billion in Chinese goods announced on Tuesday. China’s counter-measures were announced only 11 hours following. China's rapid response caught many off guard. Analysts were expecting U.S soybeans to stay off limits in the trade dispute because of China’s massive demand for the oilseed. Traders believe China may still have to purchase U.S. soybeans if there is any disruption in South American supplies. The effective date for China’s of these tariffs will be announced at a later time. China shipped around 33 million metric tons of U.S. soybeans last year and replacing that amount of soybeans will not be easy.  

EPA grants major refiner bio-fuels exemption

On Tuesday, the EPA granted three of Andeavor’s smaller refineries with a “hardship” exemption from the bio-fuels regulation. Hardship waiver has been typically reserved for small refinery operations in financial trouble. This is the first example of the EPA granting a large profitable refinery with a waiver from the U.S. Renewable Fuels Standard. This also raises the question as to whether other large refineries will also seek such waivers. Andeavor is on of the nation's largest oil refining companies.  

 

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

April 03, 2018 | Grain Hedge Insights | Kevin McNew | Views: 394

KC Wheat is Trading Higher This Morning

Grains were Up in the Overnight Session

Headlines

Wheat higher on low crop rating. Soybeans rebounds from yesterday's losses. Argentina expecting precipitation

 

Argentina

Wetter weather pattern expected to develop in crop regions. Rainfall is expected to continue over the weekend and into next week bringing 1.5” to 3” of rain to much of the crop-growing regions. Precipitation could provide some benefit to late planted double crop soybeans, but is disrupting drydown and harvest for much of the corn and soybean crops. If rains materialize it could provide some stability to production estimates which have been trending lower since the beginning of the growing season.

Crop Progress and Conditions

KC Wheat is trading higher this morning after winter wheat conditions were lower than expected. The seasons first crop progress and conditions report showed that 32 percent of the winter wheat crop was rated good to excellent compared to 51 percent good to excellent last year. Winter wheat conditions are at their lowest beginning ratings since 2002. Dryness remains across central and southwestern parts of HRW wheat area with little relief in the forecast.   

China Tariffs on U.S Ethanol

China announced on Sunday it will add an additional 15 percent tariff on ethanol imports from the U.S. Analysts say this will keep Chinese buyers from buying U.S ethanol in the near term but that the country will eventually need to source additional ethanol to meet their gasoline blending target of 10 percent ethanol by 2020. Chinese tariffs on U.S ethanol have been at 30% since January 2017 which slowed imports to a trickle.   

 

China Ready for Proportionate Response

Additional tariffs are expected to be announced by the U.S. on $50-$60 billion in Chinese imports. The tariffs are following an investigation under Section 301 of the 1974 U.S. Trade Act.   China’s ambassador to the U.S said that the country is prepared to respond to any additional U.S. tariffs with counter-measures of the “same proportion.”

 

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

April 02, 2018 | Grain Hedge Insights | Kevin McNew | Views: 420

Acreage Surprise on Thursday will Drive Trades Today

Grains Up in the Overnight Session

Headlines

Acreage surprise on Thursday will drive the trade on Monday. First Crop Progress and Conditions report of 2018 scheduled for released today. Better than expected rains over the weekend in Argentina.  

 

Planting Intentions Give Bullish Surprise

Grains trade higher with follow-through buying after a bullish surprise in the planting intentions report. Soybean acres were lower than expected at 88.9 million acres vs 91.1 expected. This was a BIG surprise and was 1 million acres below the lowest estimate.

Corn acres were reported at 88 million acres vs 89.4 million acres expected. Spring wheat acreage was higher than expected with 12.6 million acres reported vs 11.4 million acres expected.

 

Argentina

Weekend rains were heavier and more widespread than expected. Rains covered western and south central parts of Argentina. Weather is expected to be drier over the next few days with temperatures dropping. More showers are expected by the end of the week and the 6-10 day outlook looks to bring more moisture. Corn harvest is 18 percent complete and soybean harvest is 8.8 percent complete according to the Buenos Aires Grain Exchange. Late and 2nd crop corn is at the grain-filling stage throughout Cordoba, Buenos Aires and Santa Fe.

 

Brazil

Showers over the weekend slowed soybean harvest but helped 2nd crop corn. Precipitation is expected in the northern grain producing regions over the next 10 days and stay dryer in the southern regions.   

Crop Progress and Conditions

The USDA will restart its Crop Progress and Conditions report today. The report is issued weekly from April through November. Traders are expecting winter wheat conditions to show significant damage to winter wheat crops over the winter. Recent conditions reports have been state specific reports.

 

Monthly Oilseed Crushings

Scheduled for release at 2 PM CST.  The average analyst guess expects 163.5 million bushels of soybeans were crushed in February. The range of guesses spans from 162.5 million bushels to 164.9 million bushels.  


 

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

March 29, 2018 | Grain Hedge Insights | Kevin McNew | Views: 598

Prospective Plantings and Quarterly Stocks Report Thursday Morning

Grains Were Mixed in the Overnight Session

Headlines

Prospective Plantings and Quarterly Stocks out @ 11 AM CST. Soybean export sales disappoint. Ethanol production & stocks decline. Exporters sell 266,500 metric tons of Soybeans for delivery to unknown destinations during the 2017/2018 marketing year. -USDA

 

Weather

Precipitation (.25”-1.5”) fell in east central CO, eastern OK and eastern TX yesterday. More precip in northeastern CO and eastern OK today. Dry weather in Argentina through Friday. Some showers (.25”-1.5”)  forecast for northern Santa Fe, La Pampa, southern Cordoba and western Buenos Aires late this weekend into Monday.

Rains in Brazil favor Safrinha corn crop.   

 

Ethanol Production

Ethanol production declined to 1.039 million barrels per day from 1.049 MBPD LW. Production was 1.4% below last years same week production. Ethanol needs to run 2.8 percent above LY production levels to meet USDA corn used for ethanol estimates.

2016 and 2017 both saw ethanol production decline slightly between late March and May. Ethanol production cannot afford to dip during that time period this year, in order to stay on track with USDA’s corn used for ethanol projections. Ethanol stocks declined last week to 957 million gallons from 998 million gallons. The sharp decline in stocks was the largest single week drop since 2013.  

Export Sales

Soybean sales missed expectations,and were down 58 percent from LW. Corn sales met expectations, but declined 8 percent from LW.  Wheat sales met expectations and was up 33 percent from LW.

 

 

Actual

Estimated

Wheat

353

200-400

Corn

1,353

1,200-1,500

Soybeans

317

600-900

 

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

March 27, 2018 | Grain Hedge Insights | Kevin McNew | Views: 490

Weekly Export Inspections were on the Low End of Estimates

Grains Were Up in the Overnight Session

Headlines

Lighthizer and Mnuchin are in talks with Chinese on trade. Export inspections within expectations. KC Wheat ratings improve.

 

HRW Wheat Weather

Today and Wednesday showers are expected in south eastern KS, OK and TX with precip ranging from .25” to 1.5”. Dry weather is expected to follow through the end of the week.  The 11-15 day forecast is wetter in the southern areas and is expected to bring moisture to southeastern KS, central OK and central Texas. Western KS, western OK, southeastern CO and the panhandle of Texas are all expected to stay dry. Hard red winter wheat ratings showed improvement after rains last week, but are still the worst on record for this time of the year. KS wheat rated poor/very poor declined to 49% from 55%. Wheat rated good to excellent increased to 13% from 11%. OK wheat rated poor/very poor declined to 54% from 66%. Wheat rated good to excellent increased to 9% from 5% LW. TX wheat rated poor/very poor increased to 63% from 60%. Wheat rated good to excellent increased to 12% from 10%.  

 

Argentina

The 1-5 day weather outlook remains dry for the remainder of the week with a few showers in northern Santa Fe into the weekend and missing the majority of the crop production region and driest areas.  The recent weather model increased moisture in Cordoba, western Buenos Aires and la Pampa in the 6-10 day outlook. Crop analyst from Rosario grains exchange Sofia Corina said on Monday “No matter how much it rains now, it won’t help. Yields are fixed”.

Brazil

Showers throughout Brazil continue to benefit second crop corn.

 

U.S. in Negotiations with China

White House trade adviser Peter Navarro confirms that U.S. trade representative Robert Lighthizer and treasury secretary Steven Mnuchin are in talks with the Chinese in hope of avoiding a trade war. In an interview on Fox news Sunday, Mnuchin said he is seeking an agreement “for them to open up their markets, reduce their tariffs, stop forced technology transfer. These are all the things we want to do.”  U.S. stocks traded higher following the news of trade talks.

 

Weekly Export Inspections

Export inspections were on the low end of estimates for both wheat and corn. Soybean inspections were strong this week.

 

 

Actual

Estimated

Wheat

278

250-500

Corn

1,153

1,250-1,500

Soybeans

584

450-650


 

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

March 26, 2018 | Grain Hedge Insights | Kevin McNew | Views: 439

Active Rains in the Midwest This Week

More Showers at Middle of Next Week Raise Wetness Threat for Wheat

Headlines

The grains are higher in the overnight. Heavy rains over the weekend missed the main growing regions in Arg. Chinese Ethanol imports were up noticeably in February.

Market focused on Prospective Plantings report on March 29th. Exporters sell 132,000 metric tons of Soybeans for delivery to unknown destinations during the 2017/2018 marketing year. Exporters sell 120,000 metric tons of Soybean Meal for delivery to Spain during the 2017/2018 marketing year.

 

Argentina Weekend Update

Although rains fell in Argentina over the weekend, significant rains missed the most important grain producing regions. Santiago Del Estero, Córdoba, southern Santa Fe and La Pampa all remained mostly dry over the weekend and continue to have very dry topsoil. Heavy rains fell over the weekend in northeastern Santa Fe, Corrientes and Rio Grande Do Sul with rain totals between 2” to 5” inches. Some rains also fell in Buenos Aires with central and northeastern Buenos Aires reporting only 1.1 inch. Rains are expected toward the end of this week in the northeastern part of the country, but meaningful precipitation is expected to miss the main growing regions again. Majority of crops entering late grain fill and full maturation stages.

 

Last Friday’s Trade Action was Supportive

Trade action on Friday seemed bullish after selling pressure in the first half of the day, which was triggered by trade tensions between the U.S. and China, was erased by the close of the session. On Friday, May corn traded a low of $3.69 ¼ but closed the day at $3.77. May soybeans traded as low as $10.09 ¼ but closed at $10.27 ¾. The days trading range was large and the fact that early and hard selling pressure could be turned around by the end of the day is a strong vote of confidence in the fundamentals of this market.

Commitments of Traders- (Week Ending March 20th)

The latest commitments of traders marks the end of an eight week long trend of buying corn and soybeans. This should not come as too much of a surprise as the chart clearly showed technical selling during that time window. Money Managers (MM) cut their net long position in corn to 213,231 from 233,063 LW.  MM cut their net long position in soybeans to 195,522 from 208,200 LW. MM increased their net short position in CBOT wheat to -56,207 from -35,684 LW. MM increased their net long position in KCBT wheat to 29,586 from 28,947 LW. MM decreased their MGEX wheat position to net short 653 from a long position of 1,239 LW.

 

China Ethanol Imports Surge

China purchased the most ethanol since May 2016. Chinese demand for U.S. ethanol slowed last year following a tariff increase.  China bought 197,652 cubic metres of ethanol in Feb. sourced almost entirely from the U.S. which was up 64% from January. The recent demand for U.S. ethanol is a sign that China will need to rely on trade to achieve the government mandate to mix biofuel into the nations fuel supply by 2020.

 

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

March 23, 2018 | Grain Hedge Insights | Kevin McNew | Views: 729

As Trade Tensions Mount, China Soybean Buyers Devise Contingency Plans

Grains down in the overnight session

Headlines

Grains lower in the overnight. Trump signs $60 Billion tariff memorandum.

China threatens 25 percent duty on pork products. Congress passes omnibus spending bill. Export sales on the lower side of expectations.

 

U.S. Import Tariffs

On Thursday, Trump signed a Memorandum that could impose tariffs on $60 billion of imports from China. There will be a 30 day consultation period once the list of Chinese goods are published.  US Grains council expresses concern that the tariffs will trigger a “painful retaliation against U.S. agriculture.” On Friday China declared plans to levy additional duties on U.S. imports valued at around $3 billion including a 25 percent duty on pork products. Soybeans were not included in the list of U.S. products.  

 

Omnibus Spending Bill

Congress passes $1.3 trillion omnibus spending bill. Omnibus spending bill included changes to Section 199A of the President's Tax Cuts and Jobs Act which was better known as the “Grain Glitch”. Omnibus spending bill reduced the deduction by the lesser of either 9% of farmers income from sales to a coop or 50% of wages attributed to those sales.

 

Argentina

Showers over the weekend concentrated in northeastern and southern regions.

Dryness is expected to continue in central and western crop region. The 6-10 day forecast turns dry again. Buenos Aires exchange cut its forecast for 2017/18 soybean production to 39.5 MMT from 42 MMT. (USDA @ 47 MMT). The exchange cut its corn production forecast for 2017/18 to 32 MMT from 34 MMT previously. (USDA @ 36 MMT)

 

Brazil

Rains in the west central and northwestern crop regions in the 1-5 day outlook helping the second corn crop. The 6-10 day forecast continues to bring beneficial showers, but will slow soybean harvest in the far south. Brazil soybean harvest is 58% complete, ahead of the five year average of 55%. Second corn crop planting has reached 92% complete ahead of five year average of 90%.

 

Export Sales

Wheat sales were down 63 percent from LW Corn sales were on the low side of expectations and down 41 percent from LW. New optional origin sales were reported for South Korea totaling 278,000 MT. Soybean sales were also on the low side of expectations, down 40 percent from LW.  

 

 

Actual

    Estimated

Wheat

265

    100-300

Corn

1,470

    1,400-2,100

Soybeans

759

    700-1,400


 

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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