June 05, 2017 | Kevin McNew | Views: 398
June 05, 2017 | Grain Hedge Insights | Kevin McNew | Views: 143

Wheat Harvest Slowed in Texas and Oklahoma

US Northern Plains weather to be Mostly Dry thru mid-June

Grains were holding on to modest gains heading into the morning break after a night of fairly limited two-sided trade.

 

USDA reported a 120,000 MT sale of soybeans to unknown destinations. Half of it is for OC delivery and the remaining half for NC 2017 delivery.

 

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Wheat harvest was slowed last week in TX/OK as rains kept farmers from making much progress. According to US Wheat Associates, the TX crop was 27% cut while the OK crop was 16% cut. A high percentage of wheat acres in SW OK extending southward into C TX Texas have been swathed for hay, or otherwise abandoned, in favor of planting cotton.

 

In Argentina, rains have slowed the corn harvest there as farmers have cut only 40% of the crop versus a normal pace of 60% at this time of year. This could lead to a glut of corn on the market later this summer. Argentina is expecting a record overall 2016/17 corn crop of at least 39 million tonnes, with about 60 percent, a bigger proportion than ever, planted late in the season. Brazil is usually the dominant exporter in August and US supplies are generally just coming to market in September, so Argentina’s crop getting such a late start and slow harvest could add to the price pressure.

 

In the US Northern Plains, the weather continues to point to mostly dry conditions thru mid-June. A small amount of moisture is expected in the next day for SD/ND but after that it will be another before week before any noticeable precip shows up.
 

 

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June 02, 2017 | Grain Hedge Insights | Kevin McNew | Views: 74

Crude Oil Continues to Sink Hitting a Three Week Low Mark

Grains Mixed in the Overnight

Grains were mixed overnight with modest changes heading into the morning break. In outside markets, crude oil continued to sink to hitting its lowest mark in three weeks.

 

USDA reported the sale of 200,000 MT of soybeans to Spain this morning. The deal was for 70,000 MT of OC 2016 delivery and the remaining 130,000 MT for NC 2017.

 

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US weather is leaning towards the dry side which should aid the Southern Plains wheat harvest. Meanwhile in France, the wheat crop there declined slightly as FranceAgriMer estimated that 75 percent of soft wheat was in good or excellent condition by Monday compared with 76 percent a week earlier. Last week’s heatwave may have impacted the crop there.

 

Yesterday after the market closed USDA reported their monthly industrial crushing data. That showed soy crushings in April of 149.8 MB vs expectations of 148.1 MB. For corn, 432.8 MB were used for fuel alcohol in April, that is up from 400.7 MB in the same month last year.

 

South Korea feed buyer NOFI bought 138,000 MT of corn and 64,000 MT of feed wheat. The source is optional origin. Weekly export sales released this morning by USDA were strong for NC wheat and OC soybeans, but otherwise at the low end of expectations or below expectations.
 

 

Export Sales-

    

   Actual

  Estimated

Wheat - OC

   -29

  (100)-100

Wheat - NC

   810

  250-450

Corn - OC

   412

  450-650

Corn - NC 

   139

  0-200

Soybeans-OC

   610

  200-400

Soybeans-NC

    16

  0-150

 

 

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June 01, 2017 | Kevin McNew | Views: 89
June 01, 2017 | Grain Hedge Insights | Kevin McNew | Views: 70

Corn Steady to Firm this Morning, but Range Bound

Traders continue to weigh the impact of excessive spring rains in the eastern Midwest

Grains continued to inch higher overnight while crude oil moved lower in the night session.

 

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Soybeans have found some support thanks to a labor strike at Argentina ports. The strike is expected to persist thru the weekend and will stall the flow of soybeans, soymeal and some by-products.

 

In international deals, Egypt bought 180,000 MT of wheat which will be sourced from Russia and Romania. The previous Egyptian deal had seen the US garner some of the business but this tender saw the US shut out. Two South Korean feed groups bought 60,000 MT of corn which could be of optional origin.

 

The European Commission on Thursday lowered its monthly estimates of EU production of 2017/18 wheat. They pegged the 28-country European Union wheat crop at 141.3 MMT from 141.9 MMT a month earlier. Russia’s Ag Minister also downgraded the expected size of the wheat there to 100-105 MMT.

Crude oil found support from yesterday’s report from American Petroleum Institute (API) showed crude inventories were down by 8.7 million barrels at 513.2 million in the week to May 26.

 

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May 31, 2017 | Grain Hedge Insights | Kevin McNew | Views: 309

USDA’s Crop Progress Data Shows Weaker than Expected Corn and Soybean Ratings

Grains Higher in the Overnight

Grains were higher overnight trying to recover some of Tuesday’s steep sell-off.

 

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Yesterday after the market close, USDA’s crop progress data showed weaker than expected corn and soybean ratings. The US corn crop was rated as 65% good-to-excellent vs 68% expected while winter wheat ratings slipped 2% on the week to only 50% good-to-excellent. For spring wheat, the crop was rated at a sub-bar level of 62% good-to-excellent versus expectations of 71% going into the report. For planting, both corn and soy plantings were off the expected pace by only 1% with corn at 91% completed and soybeans at 67%.

 

Soy crushing margins in China are at 3-year lows, which is forcing some buyers to try and cancel shipments. Losses on the margin are around $43/MT. China was a heavy buyer from Brazil at the beginning of the year and lower prices following bumper harvests. But those profits have swung to the biggest losses in nearly three years after China's edible oil markets were flooded with rapeseed oil auctioned from national reserves and by growing imports of other alternative vegetable oils.

 

Egypt’s GASC issued a tender to buy wheat. The last Egyptian tender saw US garner some business for the first time in two years after the GASC upped their protein requirements. A South Korea feed group was also tendering for 140,000 MT of corn.

 

In weather, longer-term forecasts for the US in June and into July see no major threats to crop growing regions. June is expected to remain slanted towards cool temps and active moisture patterns. The only regions expected to be on the dry side are the high Plains of Western ND/Eastern MT. Some heat and dryness could materialize in the Eastern Cornbelt, but with high soil moisture values right now in much of the grain belt, meteorologists suggest that should put a downward bias in temps over the next few months.

 

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

May 30, 2017 | Kevin McNew | Views: 249
May 30, 2017 | Grain Hedge Insights | Kevin McNew | Views: 170

Weather Forecasts Continue to Point to Rain for much of Grain Belt

Grains in a Sour Mood after Long Holiday Weekend

Grains came back from the long holiday weekend in a sour mood with wheat leading the complex lower in overnight trade.

 

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The French wheat crop improved slightly with 76% of the crop there rated good-to-excellent vs 75% last week. In Russia, cold and wet weather is leading to concerns about crop quality problems. In Argentina, farmers are expected to boost wheat production in 2017/18 to 17.5 MMT, up from 16.3 last year.

 

USDA reported a 130,000 MT sale of old-crop 2016 soybeans were sold to unknown destinations

 

On Friday, USDA’s Cattle on Feed report showed much higher than expected placements of 111% vs 106.8% expected. Overall cattle on feed numbers were 102% as compared to 100.8% which was projected by the trade.

Weather forecasts continue to point to rain and cool temps for much of the Grain Belt over the next week. The forecast into June is said to be a bit murky by meteorologists as indicators suggest some areas may warm up.  The areas that demonstrate the highest probability of experiencing a warm month include the Southeast, Northeast, and Western regions of North America. There is also some consensus in a cool pattern persisting from May into June over the U.S. Southern Plains to some extent. The June precipitation forecast shows continued rainfall from the Southern Plains through the eastern U.S. Corn Belt, including some areas that have been wet over the last several weeks. On the other hand, it also shows more of the dryness that began to develop during May across the Northern Plains and into Alberta.


 

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

May 26, 2017 | Kevin McNew | Views: 154
May 26, 2017 | Grain Hedge Insights | Kevin McNew | Views: 158

Weekly Cash Comments

Weekly Cash Commentary for week ending 5/26/2017

Basis levels continued to rise this week with corn and soy basis advancing about 2.5 cents across the US on average.

 

Active farmer planting and weaker futures prices have helped to support basis in the past two weeks. For corn, basis in Western Kansas continues to be an area of notable strength. This week we also saw some activity good movement by Corn plants in Southern Indiana, although basis improvements were relatively short-lived for only a couple of days. There are also some reports of a few isolated push opportunities by buyers that look to get short-term needs covered.

 

For soybeans a few soy crushing plants in the Western Cornbelt increased their basis this week, and plants in Northern Indiana and Ohio were trying to bid up basis as well with gains of 3 to 5 cents fairly typical in these regions.

 

On the river, market basis for corn was notably weaker this week with a 2.5 cent loss on average across buyers. The Gulf was off 1 cent, but some river markets were off 3 to 5 on the week.  For soybeans, basis levels at river terminals were up 1.5 cents on average, lagging the broader market gains of 2.5 cents.

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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