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May 04, 2016 | Grain Hedge Insights | Kevin McNew | Views: 108

Corn Hit Fresh Weekly Lows

Crude Oil posted modest gains

Grains continued to move lower following yesterday’s sharp selloff. Corn hit fresh weekly lows, while soybeans got closer to short-term support in the $10.18 to $10.20 area. In outside markets, crude oil posted modest gains after yesterday’s steep slide while the US dollar index continued to drift lower.

 

Yesterday brought heavy selling to soybeans as a sharp drop in the Brazilian Real and Argentina crop estimates that were not as bad as expected. Informa on Tuesday pegged the Argentina soybean crop at 55 MMT. Early in the week Argentina’s state weather agency suggested a crop of 51 MMT.  Another analyst, Dr Cordier who specializes in South America, said the crop could come in at 53 to 54 MMT but it is still too early to tell.

 

In wheat, the Kansas crop tour on Tuesday found above average yields in much of Northern Kansas. Recent rains have boosted crop prospects following excessively dry weather earlier in the year but also raised the threat of diseases such as the stripe rust that was detected in some fields surveyed by crop scouts.

 

In corn, Brazil saw no rain in the last 18 hours. Brazil rain forecasts remain mixed. Private analyst Celeres trimmed their estimates of Brazil second crop corn production by 10% from prior to 52.8 mmt – a call echoed today by Agroconsult.  A boost in Brazil rain is still needed from Goias into Minas Gerais and northern Sao Paulo.

 

In crude oil, prices were awaiting direction from the weekly EIA crude stocks report later this morning. Analysts expect a 1.2 million barrel build in stocks on the week, which would mark another weekly inventory high. The American Petroleum Institute, an industry group, said late Tuesday that its own data for that week showed a 1.3-million-barrel increase in crude supplies. In addition, a gauge of China’s manufacturing industry reported Tuesday by Caixin Media Company Ltd. and Markit Economics fell in April, marking the 14th straight month of contraction.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 030793

May 03, 2016 | Grain Hedge Insights | Kevin McNew | Views: 101
May 03, 2016 | Grain Hedge Insights | Kevin McNew | Views: 199

Soybeans Climbed to New Heights Overnight

US Dollar was making a run at 7 days of losses

Soybeans climbed to new heights overnight while corn and wheat posted modest gains. In outside markets, the US dollar index was making a run at 7 days of losses while equity futures and crude oil were also weaker.

 

Soybeans got a boost overnight when news late Monday suggested crop losses in Argentina were going to be around 9 MMT versus previous estimates of 5 MMT.  In other South America news, crops analyst Celeres sharply lowered its forecast on Monday for Brazil's second annual corn crop by 10 percent to 52.8 MMT from the previous month due to bad weather over the main growing areas.

 

However, US early season growing conditions continue to be nearly ideal. Planting progress for both corn and soybeans sped along last week with US corn planting reaching 45% complete as compared to 30% last week, while soybeans are at 8% planted versus only 3% last week. Winter wheat crop ratings also continued their uptrend hitting 61% good-to-excellent versus 59% previously.

 

In currency news, Brazil’s Real took a second day to the downside, giving up nearly 3% from the high’s set on Friday. Monday’s closing prices for Brazil & US port export prices for soybeans showed Brazil at a $10/MT premium to US beans. Two weeks ago US soybeans were $3/MT more expensive than Brazil.

 

Oil futures dropped on Tuesday, with renewed fears of a supply glut hitting investor confidence ahead of weekly inventory data that are expected to show an increase in crude supplies. Reports said on Monday that energy data provider Genscape reported a weekly climb in crude stockpiles of more than 800,000 barrels at Cushing.  API weekly crude stocks will be released this afternoon.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 030793

May 02, 2016 | Grain Hedge Insights | Kevin McNew | Views: 137
May 02, 2016 | Grain Hedge Insights | Kevin McNew | Views: 117

Grains Subdued in The Overnight Session

US Dollar hit fresh lows late in the morning session.

Grain markets were subdued overnight with grains showing modest losses in fairly limited trade. In outside markets, the US dollar hit fresh lows late in the morning session while crude oil was weaker on the night but was coming back closer to unchanged.

 

On Friday a number of analysts trimmed the Brazil corn crop estimate as heat stress has taken its toll on the 2nd crop there. Analyst AGR BRASIL reduced its Brazil 2015/16 corn forecast to 79.6 MMT from 85.1 MMT in March. Meanwhile analyst Franca pegged it at 79.5 MMT versus 87.1 MMT in March.

 

Most of this week will be dry in Brazil’s main agricultural areas. Some random showers will occur near the coast from Minas Gerais and Rio de Janeiro to eastern Bahia and a few may occur infrequently from northern Mato Grosso to Tocantins. The impact will be one of net drying for most of the nation and immature second season corn production areas will slowly dry out once again, but many crops will be in favorable condition because of rain that fell last week.

 

In Argentina, A favorable weather pattern is expected through the next ten days with restricted rainfall and mild to warm temperatures. The environment will favor better harvest conditions as time moves along. No meaningful rain is expected through Thursday morning. Some showers will evolve Thursday afternoon and Friday in portions of the nation. Some of the shower activity will linger into early next week.

 

Oil prices edged back from 2016 highs on Monday as rising production in the Middle East outweighed a decline in U.S. output and a sliding dollar. Crude production by the Organization of the Petroleum Exporting Countries rose in April to 32.64 million barrels per day (bpd), close to the highest level in recent history. Iraq's April exports from southern fields increased, as did seaborne exports from Russia, the biggest exporter outside OPEC.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 030793

April 29, 2016 | Grain Hedge Insights | Kevin McNew | Views: 177

Weekly Cash Comments

Weekly Cash Commentary for week ending 04/29/2016

Grain basis was flat this week with both corn and soybean basis holding steady at week ago levels.

 

However, the river markets continue to push basis levels higher as export demand continues to be robust, especially for this time of year. Corn basis at river terminals averaged a 2-cent advance on the week while soybean basis was up only modestly.

 

End users as a group were relatively flat this week with no significant change in corn or soybean plant basis on the week.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 030793

April 29, 2016 | Grain Hedge Insights | Kevin McNew | Views: 187

Corn Finds Strength Overnight

Crude Continues to Climb

Corn found more strength overnight while soybeans was off slightly but improved from its lows on the nights. Wheat was higher as well. In outside markets, crude oil continued to climb getting above $46 a barrel while the US dollar came under pressure.

 

Corn continues to find strength from yesterday’s big export sales report showing 2.6 MMT combined for old- and new-crop deliveries, the highest weekly total in 4 years. The weakness in the US dollar continues to make US grains more attractive. Argentina’s port price is running at $6 a MT higher than the US price versus in December when Argentina’s price was $7 a MT cheaper than the US.

In weather, rains will favor much of the Plains hard red winter wheat belt, with weekend showers reaching much of the central/southern Midwest and Delta. The Midwest/Delta then will see favorably dry weather for seeding in nearly all areas for most of next week, with a return of 11 to 15 day rain posing the next interruption to fieldwork. Overall, planting should remain at a favorable pace, and any concerns with excess moisture will remain localized.

 

In weather, rains will favor much of the Plains hard red winter wheat belt, with weekend showers reaching much of the central/southern Midwest and Delta. The Midwest/Delta then will see favorably dry weather for seeding in nearly all areas for most of next week, with a return of 11 to 15 day rain posing the next interruption to fieldwork. Overall, planting should remain at a favorable pace, and any concerns with excess moisture will remain localized. 

 

In South America, Argentina was dry yesterday, with lows in the mid-30s to low 40s. Unseasonably cold air lingers this weekend, but frost threats remain minimal for double-crop soy. Mostly dry weather now looks likely to persist through much of the next two weeks, allowing corn/soy harvest to recover. Second season corn in Brazil from Mato Grosso through southern Goias to Sao Paulo and Parana will not receive much precipitation over the next week. Brazil showers this weekend will produce 0.10 to 0.75 inch of rain from far northeastern Sao Paulo, Rio de Janeiro and Minas Gerais to northern Goias and parts of Tocantins.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 030793

April 28, 2016 | Grain Hedge Insights | Kevin McNew | Views: 190

Why US Exports Are So Strong

If you watch one video about US exports, let it be this one. Kevin gives a massive breakdown of the driving forces behind strong US exports. Don't miss this one.

April 28, 2016 | Grain Hedge Insights | Kevin McNew | Views: 138

Corn and Soybeans Posted Small Losses in the Overnight Session

In the outside markets, US Dollar Continues to Sink

Grains were mixed overnight with corn and soybeans posting small losses while wheat posted a modest gain. In outside markets, the US dollar continued to sink while crude oil had a modest drop after hitting fresh highs in the previous session.

 

On Wednesday, Argentina’s grain exchange said one third of soybean farms remain swamped after early April storms, with crop loss estimates at 5 MMT as harvesting starts in areas dry enough to support field work. The exchange estimates this year's crop at 59 MMT, a forecast that is likely to fall in the weeks ahead as the sun comes out and farmers measure flood-related losses. Last week the Buenos Aires Grains Exchange chopped its harvest forecast to 56 MMT from 60. The first cold front of the Southern Hemisphere autumn hit Argentina on Sunday, ending the rains. Mostly fair weather is expected in May, which should allow harvesting machines to get to farms left isolated when floods washed out the poorly maintained roads that crisscross the Pampas.

 

In the US, the Midwest is slightly drier Sunday. Abundant rains in central and southern areas through the weekend will slow corn and soybean planting, but will improve soil moisture, especially in western areas. The 6-10 day outlook is warmer in northwestern areas. The Plains are wetter in northwestern areas in the 6-10 day period. Additional widespread showers through the weekend will continue to build moisture and winter wheat conditions. The rains will be most beneficial in southwestern areas.

 

Saudi Arabia's main state grain agency, the Saudi Grains Organization (SAGO), said on Thursday it was seeking 550,000 MT of hard wheat in a tender.   The wheat should contain 12.5 percent protein and will be for shipment from July to August, SAGO said in a statement.   The deadline for offers is Friday, it said.

 

The Federal Reserve kept interest rates unchanged on Wednesday but signaled confidence in the U.S. economic outlook, leaving the door open to a hike in June.   The U.S. central bank's policy-setting committee said the labor market had improved further despite a recent economic slowdown and that it was keeping a close eye on inflation.   It added that global economic headwinds remained on its radar, but removed a specific reference from its last policy statement to the risks they posed. The US dollar initially reversed its recent slide on this news but continued lower in the night session, giving up 0.5%. The US dollar index has lost 5% of its value since March 1.

 

WEEKLY EXPORT SALES

 

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

Corn            2,160     1,000-1,300         440       200-400

Soybeans        226        400-600            720       300-500

Wheat         351.9         75-175           454.7      300-450

 

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

April 27, 2016 | Grain Hedge Insights | Kevin McNew | Views: 191

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