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May 27, 2016 | Grain Hedge Insights | Kevin McNew | Views: 270

Weekly Cash Comments

Weekly Cash Commentary for week ending 5/27/2016

US soybean basis showed good strength this week. While corn lagged behind, mostly steady to weaker loosing half a cent on the week.

Corn basis levels at the Gulf were off sharp this week,  giving up  7 cents  a bushel.  River terminals managed to resist the drop in the Gulf at basis level were only off about one cent a bushel.  Recent export deals in corn should underpin river bids and probably keep them moving higher in the summer. Meanwhile, ethanol plants as a group were down this week by one cent suggesting that ethanol plants aren’t eager for corn. 

Overall, we saw a rise in soybean basis by two and half cents. River thermals were leading the rise higher with changes of nearly eight cents per bushel, moving in lockstep with the Gulf. Soy meal is on a sharp upward trajectory. We saw crush facilities increase basis by almost a nickel.  Strengthening soy crushing margins all the way out to January are encouraging some to increase new crop bean basis. 

 

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May 27, 2016 | Grain Hedge Insights | Kevin McNew | Views: 230

Grains were mixed and Crude Oil Gave Back on Recent Gains

USDA announced flash sales with China

Grains were mixed with little change from yesterday’s close while crude oil gave back some of its recent gains.

 

USDA announced three flash sales deals this morning with 130,000 MT of China for old crop delivery and 110,000 MT to China for new-crop delivery. A deal for 100,000 MT of soymeal for new crop was also sold to an unknown destination.

 

The Buenos Aires grains exchange said Argentina’s soy harvest was progressing smoothly after drier weather in recent weeks.  Storms that flooded half the agricultural region prompted the loss of 1.65 million hectares dedicated to soybeans. However, the group kept output forecasts for the bean on hold at 56 MMT this season following a recent cut, thanks in large part to record yields in provinces like Buenos Aires and La Pampa. That is only slightly lower than USDA’s estimate of 56.5 MMT.

China has begun to offer up corn reserves to their domestic market to try and eliminate massive stockpiles that have been accumulating over the past 15 years. This morning they announced they auctioned off 889,000 MT.

 

The Western Cornbelt will likely see active rain systems in the next 5 days before turning drier in the 6 to 10 day forecast. Showers will be intermittent and limited in the eastern Midwest and much of the Delta in the next two weeks to aid fieldwork, as the best rains focus west of the Mississippi River. A tropical disturbance will bring some wet weather to the Carolinas this weekend as well, but damage threats are low. Follow-up showers in the 6 to 15 day will keep late fieldwork sluggish in the region.




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, 2016 | Grain Hedge Insights | Kevin McNew | Views: 294
May 26, 2016 | Grain Hedge Insights | Kevin McNew | Views: 309

Grains were Higher than Soybeans and Weekly Export Inspections

Crude hit its highest mark since last October

Grains were Higher than Soybeans and Weekly Export Inspections

Grains were higher this morning with soybeans reaching new heights on the rally, briefly getting close to $11 a bushel on front-month July futures. In outside markets, crude oil was also chartering fresh ground eclipsing $50 a barrel, its highest mark since last October.

 

Soybeans continue to be fueled by a surge in soymeal prices tied to the crop shortfall in Argentina. Meal prices bested $400 a ton in the last session and continue to move higher overnight. With Argentina’s soy crop problem, traders are looking for much lower soymeal exports from the world’s #2 supplier.

 

Russia's Sovecon agriculture consultancy has raised its forecast for Russia's 2016 grain crop to 107 MMT from a previously expected level of 105.4 MMT, its presentation at a conference in Moscow showed on Thursday. Its forecast for the wheat crop was raised to 64 MMT from 61.1 MMT. USDA currently has the Russian wheat crop at 63 MMT.

 

Overnight export deals saw Jordan tendering for 100,000 MT of optional origin milling wheat. Meanwhile, South Korea’s MFG walked away from the tender to buy 70,000 MT of corn, citing prices that were too high.

 

Crude oil continues to climb thanks to EIA data on Wednesday showing a 4.1 million barrel drawdown in crude stocks. Expectations were for only a 2.4 million barrel drop in inventories.

 

WEEKLY EXPORT INSPECTIONS

 

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

Corn                          1,381       1,000-1,300         246        250-450

Soybeans                    456            300-500           150         300-500

Wheat                         -9               0-200             354         300-500


 

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

May 25, 2016 | Grain Hedge Insights | Kevin McNew | Views: 427
May 25, 2016 | Grain Hedge Insights | Kevin McNew | Views: 206

Grains Start the Day in Positive Territory

Crude Oil added to yesterday's gains

Grains were in positive territory to start the day with soybeans leading on a 10-cent advance. In outside markets, crude oil and equity futures continued to add to yesterday’s gains.

 

Soybeans were up today buoyed by strength of late in soymeal. Slow farmer selling in Argentina is helping support soymeal prices as international buyers usually find ample supplies from South America this time of year. Also supporting soymeal was word that ADM’s Frankfurt, IN soybean plant was idling for maintenance.

 

In weather, rains is expected to be focused on the center of the US with rains across the W. Midwest will keeping planting slow. The western Midwest finally gets a needed break beginning the middle of next week which promises a longer window to catch up soy seeding and this will extend into the eastern Midwest as well.

 

In overnight export deals, a South Korea feed dealer bought 60,000 MT of feed wheat optional origin while another group in South Korea issued a tender for 70,000 MT of corn.

 

API crude stocks data on Tuesday was supportive as weekly inventories shrunk by 5.1 million barrels versus trade estimates of a 3.3 million barrel decline. That marks the 2nd week in a row of declining API crude stocks, and is the first time since early January that crude stocks reported by API fell for two weeks in a row. Official government data from EIA will be released at 9:30 am CDT today with the data expected to show a 2.4 million barrel drop from last week.

 

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

May 24, 2016 | Grain Hedge Insights | Kevin McNew | Views: 259
May 24, 2016 | Grain Hedge Insights | Kevin McNew | Views: 230

Grains Moved Lower Overnight

US Dollar was stronger...

Grains moved lower yet again overnight with soybeans continuing their sell-off reaching their lowest mark since the May 10 crop report. In outside markets, the US dollar was stronger as was equity futures and crude oil.

 

After the close on Monday, USDA released their weekly crop progress report showing a big jump in soybean plantings from 36% last week to 56% this week. Corn planting looked to be mostly wrapped up with 86% of the crop planted. And winter wheat conditions held steady at 62% good-to-excellent versus last week. Spring wheat is also faring well at 76% good-to-excellent versus last year of 69%. Indiana and Ohio still lagging on planting.  For corn, Indiana is 62 percent planted (vs 5-year avg of 77 pct) and Ohio reaches 51 pct (vs 5-year avg of 66 pct).

 

In export news on Monday, weekly inspections from USDA showed sub-par movement for soybeans while corn and wheat were in-line with expectations. With only a few weeks left in the wheat marketing year it seems likely final year exports will come up 20 to 30 MB shy of USDA’s forecast. Corn is also lagging but the pace has been brisk of late and with 3 months left in the marketing year will likely meet USDA’s benchmark.

 

Overnight, Taiwan's maize industry procurement association MFIG has purchased 65,000 MT of corn to be sourced from the United States in an international tender which closed on Tuesday, European traders said. The tender had sought corn from either the United States, Brazil, Argentina or South Africa. This morning USDA announced a 140,000 MT of soybeans for new-crop to unknown destinations. That makes two days in a row of new-crop bean deals.

 

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

May 23, 2016 | Grain Hedge Insights | Kevin McNew | Views: 247
May 23, 2016 | Grain Hedge Insights | Kevin McNew | Views: 221

Grains Start the Week in Negative Territory

Crude Falls Yet Again

Grains started the week in negative territory with soybeans facing the biggest brunt of the selling pressure. In outside markets, crude oil fell for a 4th consecutive session and equity futures were steady to weaker in early trade.

 

Soybeans got pressured overnight on improved crop weather in the U.S. Midwest and a "risk-off" mood in the broader commodity sector. Ahead of USDA's weekly crop progress report, early trade estimates were for the government to show U.S. soybean planting at 58 to 60 percent complete.

 

Overnight news saw some export tender activity. Taiwan’s MFIG purchasing group issued a tender to buy 40,000 to 65,000 MT of corn, while a group of Israeli buyers issued a tender to purchase 108,000 MT of corn. This morning USDA announced two export deals. Exporters sold 140,000 MT of new-crop soybeans to unknown destinations and a 20,000 MT deal for old-crop soybean oil.

 

In outside markets, the US dollar continued to climb higher this morning as the market starts to expect the US Fed to raise interest rates. The US dollar is at 2-month highs and posing problems for commodity prices in general. Crude oil in particular is off from its highs by $2 a barrel.

 

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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