July 29, 2016 | Grain Hedge Insights | Kevin McNew | Views: 85

Weekly Cash Comments

Weekly Cash Commentary for week ending 07/29/2016

Spot grain basis found modest support this week as futures markets continued to erode in the face of ample supplies this fall. On the week, spot corn basis was up 1.6 cents on average while spot soybean basis was up 1.2 cents on average.

 

For corn, river terminals were the big winners this week gaining nearly 4 cents a bushel. Unseasonably strong exports continue to keep basis levels firming at export sensitive markets. Meanwhile, ethanol plants were up only 1.5 cents on average this week.

 

Conversely, soybeans saw only fractional gains of 0.3 cents a bushel at river terminals as export activity slows down along normal seasonal lines. However, soybean plants were up 3.2 cents a bushel on the week.

 

Looking ahead to new-crop bids, basis levels are generally weaker for corn when comparing the same elevator new-crop basis now versus 2015. On average, new-crop corn basis is off 4 cents from the same time last year, but beans are on par with basis levels being offered this time last year.

 

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

 

New-Crop Basis Bids For Same Elevator Comparisons: 2016 vs 2015

July 29, 2016 | Grain Hedge Insights | Kevin McNew | Views: 64

Grains Continue to Grind Lower

Crude Oil hits fresh lows in the overnight session

Grains continued to grind lower overnight with soybeans suffering the biggest loss. Outside markets were also weaker as crude oil hit fresh lows, approaching $40 a barrel.

 

The International Grains Council on Thursday raised its forecasts for global corn production in the 2016/17 season, largely reflecting improved crop prospects in the United States.  World corn production was upwardly revised to 1.017 billion tonnes, up from a previous projection of 1.003 billion and the prior season's 968 million.
The IGC also raised its forecast for global wheat production in 2016/17 to 735 million tonnes, up from a previous projection of 729 million but still marginally below the prior season's 736 million.

 

On Thursday, USDA’s export sales report was disappointing for soybeans, but flash sales announcements by USDA added 457,000 MT to potential future sales. Year-to-date new-crop soybean deals stand at 9.7 MMT well off of recent years where the US has booked 15 MMT by this time of year.

 

Crude oil continues to slump on oversupply fears. Along with oversupply in oil, there continues to be a gasoline glut worldwide. Investors will be watching for the weekly U.S. drilling report due later Friday for clues to the supply situation. Previous data from industry group Baker Hughes has shown an increase in oil drilling activities in the U.S. for four consecutive weeks.

 

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

July 28, 2016 | Grain Hedge Insights | Kevin McNew | Views: 128
July 28, 2016 | Grain Hedge Insights | Kevin McNew | Views: 162

Corn and Wheat Post Modest Gains Overnight

Crude Oil continues to come under pressure

Grains were mixed overnight with corn and wheat posting modest gains while soybeans sank into negative territory by the end of the night session.  Crude oil continued to come under pressure, falling below $42 for the first time since April.

 

Spring wheat yield prospects in central and northwest North Dakota are down from a year ago but still above average, scouts on an annual crop tour said on Wednesday.  The Wheat Quality Council tour calculated an average yield for 158 hard red spring wheat fields scouted in the region at 46.9 bushels per acre (bpa) on the second day of a three-day crop tour. The figure compares with the 2015 Day Two yield of 47.3 bpa and the five-year average of 45.7.

 

French consultancy ODA said it expects soft wheat production in the European Union to drop to 134 million tonnes this year, down 17 million from a record 2015 harvest, due to weather hit-yields in France and other parts of western Europe.


The estimate, posted late on Wednesday on ODA's Twitter account, was well below the European Commission's current forecast of 144.6 million tonnes made at the end of June and the 145.5 million tonnes estimated by fellow consultancy Strategie Grains in mid-July. As well as a widely expected plunge in French production, due to the impact of torrential rain, limited sunshine and crop disease, ODA said it expected similar problems in the Benelux countries, southern England and southern and western Germany.

 

    Weekly Export Sales

 

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

Corn                  438      300-500          476       450-650

Soybeans             -1      250-450          678        600-800

Wheat                                                506        400-600

 

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

July 27, 2016 | Grain Hedge Insights | Kevin McNew | Views: 213

Soybeans Advance above $10 in the Overnight Session

US Equity Futures in Positive Territory

Soybeans Advance above $10 in the Overnight Session

Grains were higher overnight with soybeans leading the complex by advancing above $10. Corn and wheat followed with more lackluster gains. In outside markets, crude oil dipped a bit while US equity futures were in positive territory to start the morning.

 

Spring wheat yield prospects are lower than last year in southern North Dakota and neighboring sections of South Dakota and Minnesota, scouts on an annual crop tour found on Tuesday.  The Wheat Quality Council tour calculated an average yield for hard red spring wheat fields scouted in the region at 43.1 bushels per acre (bpa) on the first day of a three-day crop tour. That figure compares with the 2015 Day One yield of 51.1 bpa and the tour's five-year average of 45.0 bpa. Scouts on the tour sampled 177 fields overall on Tuesday, including 173 hard red spring wheat fields, four durum wheat fields and no hard red winter wheat fields.

 

Analyst UkrAgroConsult has raised its forecast for Ukraine's 2016 wheat harvest to 24.8 million tonnes from 23.3 million, it said on Wednesday. UkrAgroConsult said that the new outlook was based on a fresh government data on the sowing area, showing the wheat area had increased to 6.2 million hectares from 6 million hectares.

 

In weather, cool air currently moving into the US Corn Belt continues through the weekend, but also pushes heaviest rains the next five days south of the region; temperatures bounce back to 5°F to 10°F above normal next week, but yet another weekend cool-down likely to follow.

 

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


 

July 26, 2016 | Kevin McNew | Views: 199
July 26, 2016 | Grain Hedge Insights | Kevin McNew | Views: 138

Crude Oil Continues Its Slump

USDA Crop Progress Report shows corn and soybean conditions unchanged for the week.

Grains were mixed overnight with wheat lower while corn and soybeans had modest advances in the overnight session. Crude oil continued to slump adding to yesterday’s sharp losses.

 

Yesterday after the close USDA’s crop progress report showed both corn and soybean condition ratings unchanged for the week at 76% and 71%, respectively. Also, both crops are developing ahead of normal. Corn is currently 79% silking versus a 5-year average of 70% while beans are 76% blooming versus 66% for normally for this time of year.

 

In world news, China has experienced heavy rains of late bring 6 to 9 inches in core corn producing areas of North China. While difficult to assess immediate damage to the corn crop, rain of this intensity has likely resulted in some widespread flooding across much of the region. The situation could be made even worse if the heavy rainfall were to continue over the next several weeks, but a dry and pattern would allow fields to dry down more rapidly.

 

The European Union's crop-monitoring service (MARS) raised its forecast slightly for the average soft wheat yield in this year's EU harvest as a sharp increase in the projection for Bulgaria offset a cut in rain-affected France. In its monthly report the MARS service pegged the average EU soft wheat yield at 6.10 tonnes per hectare (t/ha), up from 6.07 t/ha seen in June. The estimate was 2.9% below last year's yield but 4.6% above the five-year average. MARS cut its soft wheat yield estimate for France, whose wheat crop has been hit by torrential rain in the spring and low sunshine, to 7.37 t/ha, from 7.45 t/ha estimated last month. It would be 6.9 percent below 2015, but 0.5 percent above the five-year average.

 

Oil on Tuesday hit its lowest mark since May, falling towards $44 a barrel, pressured by concerns that a long-awaited rebalancing of the market would be delayed due to excess supply. Record crude output from the Organization of the Petroleum Exporting Countries, a glut of refined products and signs of more drilling activity in the United States in the face of low oil prices have added to concern about excess supply. U.S. drillers added oil rigs for a fourth consecutive week and traders fear continued increases would threaten a market weighed by excess supply for two years.

 

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

July 25, 2016 | Grain Hedge Insights | | Views: 168
July 25, 2016 | Grain Hedge Insights | Kevin McNew | Views: 127

Morning Commentary -July 25

Soybeans was a leader to the downside

Soybeans was a leader to the downside this losing 51.25 cents. Compared to soybeans, corn and wheat were down modestly, off 23.5 and 16.25 respectively.

 

Weather models continue to show a wet and cooling trend from the recent heat wave. Temperatures should return to seasonal norms by early next week and even dip below normal by late next week.

 

USDA's crop progress report on Monday showed no material changes in crop conditions with both corn and soybean crop ratings holding steady at 76% and 71%, respectively from the previous week. Spring wheat dropped 1% to 69%. But the overall trend is still better crops ratings than what traders have been expecting as well as conditions that are generally better than last year.

 

US Exports were mixed this week. Old and new crop corn came in slightly lower than analysts expectations. Old crop soybeans were in line with expectations, but new crop came in almost 300,000 MT above expectations.

 

Wheat exports have the potential to increase in the next few months. News out of Europe points to disappointing yields with French wheat yield estimates at the lowest seen in 13 years.

 

Crude oil continues to move lower. Rebalancing may take longer than expected as huge amounts of crude remain in vessels at sea and storage tanks on land. Data from the U.S. Energy Information Administration also showed a surprise build in supplies of the motor fuel despite forecasts of American drivers hitting the road in record numbers this summer.

 

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

July 22, 2016 | Grain Hedge Insights | Kevin McNew | Views: 159

Weekly Cash Comments

Weekly Cash Commentary for week ending 07/22/2016

Ethanol plants saw a slight rise higher this week up 1.5 cents per bushel. Ethanol production continues to stay strong, particularly in the midwest where we saw the highest production numbers this month. Corn along the river saw an average increase of 3.5 cents per bushel even with old crop and new crop exports coming in below expectations.


Plummeting futures prices kept soybean basis levels mostly stable to slightly stronger across some sectors this week. River terminals as a group were steady as old-crop business starts to trickle off. However, crush plants moved higher by 3.2 cents a bushel 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: 0307930)

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