May 18, 2018 | Grain Hedge Insights | Kevin McNew | Views: 174

Weekly Cash Comments

Cash Commentary for week ending May 18th

Corn basis was fractionally higher on the week while soybeans put on an impressive 3-cent advance on the week.

 

For corn, it was a mixed week with ethanol plants generally higher while river terminals were broadly weaker. Gulf basis was off 5 cents on the week but the PNW export market was 6 higher. Barge freight appears to be tightening on the Mid-Miss River and higher but lower stretches of the MS River and OH rivers seem to have ample barge capacity.

Soybeans saw a bit more strength at river terminals which posted an average gain of 3.5 cents while soy plants were up 2.5 cents on the week. Nonetheless, some soy plants were up 5 to 12 in the Upper Midwest as farmers are actively trying to catch up on planting there.

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

May 18, 2018 | Grain Hedge Insights | Kevin McNew | Views: 224

China Retreats from U.S. Sorghum Probe Amid Global Market Havoc

Grains were up in the overnight session

China Retreats from U.S. Sorghum Probe Amid Global Market Havoc

Export Sales

Cancellations of export sales of 949,000 metric tons of soybeans for delivery to unknown destinations.  Of the total 829,000 metric tons is for delivery during the 2017/2018 marketing year and 120,000 metric tons is for delivery during the 2018/2019 marketing year; and

Export sales of 168,000 metric tons of soybeans for delivery to unknown destinations.  Of the total 56,000 metric tons is for delivery during the 2017/2018 marketing year and 112,000 metric tons is for delivery during the 2018/2019 marketing year.

 

China’s Anti Dumping Claim on Sorghum Ends

China abruptly ended it’s anti-dumping claim on US sorghum today in a sign of good-will to the US during China’s Vice Premier visit to the US to improve trade tensions. The Commerce Minister said in a statement that the penalties imposed would hurt China’s consumers causing meat prices to rise. It’s not thought much sorghum will flow there now at this late in the marketing season. Furthermore, sorghum is still on the list of ag products the Chinese government would include 25% tariffs on. Ongoing China-US talks in Washington this week had been rumored to include a Chinese concession to reduce the trade imbalance from $375 billion to $200 billion. But that rumor was quashed quickly by Chinese foreign ministry spokesman Lu Kang who told a regular news briefing."This rumor is not true. This I can confirm to you.”

 

Overnight Tenders

Iraq bought 100,000 MT of hard wheat with 50K coming from the US and the other 50K coming from Australia. South Korea's largest animal feed maker Nonghyup Feed Inc. (NOFI) bought about 63,000 tonnes of feed wheat in a tender which closed on Friday, European traders said.

South America Estimates Slip Further

The Buenos Aires Exchange pegged Argentina’s soy crop at 36 MMT, down from their previous forecast of 38 MMT and below USDA at 39 MMT.  FC Stone is expecting further downward revisions to its projections for Brazil's main corn crop after rains in the first half of May were again below-average, worsening conditions for corn growth in key regions. "Earlier in May, our numbers indicated losses of 21 percent in Sao Paulo, 16 percent in Mato Grosso do Sul and 15 percent in Paraná. But considering the weather in the first half of May, it is almost certain that those losses will be bigger," FC Stone analyst João Macedo said in a report.   The expectation is that losses in those regions could go up to between 20 percent and 30 percent, Macedo said.
 

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May 17, 2018 | Grain Hedge Insights | Kevin McNew | Views: 288

Weekly Export Sales Mostly Within Expectations

Grains trading higher on optimism toward U.S./China trade talks

Weekly Export Sales Mostly Within Expectations

Headlines

Grains trading higher on optimism toward U.S./China trade talks. Wheat higher on crop damage concerns. Ethanol production stronger again this week. Private exporters reported to the USDA export sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2017/2018 marketing year.

 

U.S. to hold trade talks with China on Thursday and Friday

Treasury Secretary Mnuchin is hosting trade talks with Chinese Vice Premier Liu today and tomorrow. Many speculate that Liu is coming to the U.S. to make a deal. However, rhetoric on Tuesday from U.S. trade representative to China indicated that the two countries are still “far apart.”

 

Wheat Trading Higher

Chicago and Kansas winter wheat are both trading higher this morning after reports of crop damage from high wind and hail from storms in Kansas and Colorado. Australia weather continues to be very dry during fall planting. Recent satellite imagery shows record lows for vegetation density across all of Australia’s major wheat growing region.

 

Ethanol Production

Ethanol production increased to 1.058 million bpd from 1.040 mbpd last week. Weekly production was 3% above LY during the same week. LY production levels declined from late May through June which will provide further opportunity for TY ethanol production to make significant gains over LY. Ethanol stocks declined this week to 903 million gallons from 922 million. Ethanol stocks usually reach a peak in April and decline until August during the summer driving months.  The decline in ethanol stocks from the seasonal peak to mid-May was 11% this year, which is significantly larger than 2017 when ethanol stocks were reduced by only 4%.

Weekly Exports

Export sales were mostly within expectations this week with soymeal beating expectations.

Wheat sales were up 79% from last weeks terrible performance. Corn sales were up 42% from last week and were on the high side of analyst expectations. Soybean sales were down 20% from last week and narrowly missed expectations to the low side.

 

  

   Actual

Estimated

Last Week

Wheat-OC

   63

0-200

   35

Wheat-NC

   131

100-300

   48

Corn-OC

   985

700-1,000

   695

Corn-NC

   129

50-200

    90

Soybeans-OC

   281

300-600

   354

Soybeans-NC

   224

100-400

   278

Soymeal-OC

   376

100-300

    90

Soymeal-NC  

    45

0

    -6

 

 

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

May 16, 2018 | Grain Hedge Insights | Kevin McNew | Views: 315

U.S. Soy Plantings Well Ahead of Usual Pace

U.S. winter wheat production down on continued dry & warm weather in southern plains

U.S. Soy Plantings Well Ahead of Usual Pace

Headlines

  • Corn and wheat higher in the overnight as soybeans slip.
  • NOPA crush within expectations.
  • Brazil soybeans cheaper than U.S.

 

Weather Updates

Precipitation in Brazil brings relief to 2nd crop corn in south and western Parana. More rains are expected this weekend. Rains will be limited throughout Argentina over the next week bringing some relief to an over-saturated soybean crop during harvest. 1-5 day GFS forecast brings moisture to western Kansas and Oklahoma. 6-10 day GFS forecast bring significant precipitation into Northern Texas, Oklahoma  and southern Kansas.

 

NOPA Crush Results

The NOPA Crush report showed that the amount of soybeans crushed in April met analyst estimates. April soybean crush was reported at 161.016 MB, compared to analyst estimates of 160.966 MB. Last year April soybean crush totaled to just 139.134 MB. April Soyoil stocks were reported at 2.092 billion pounds, up from 1.946 billion pounds at the end of March. Soyoil stocks were above the average analyst guess of 1.98 billion pounds and are at a five year high.

 

Brazil soybean prices dip below U.S.

The price of Brazilian soybeans for export has dropped below U.S. export prices as Chinese buying has cooled. Brazilian soybeans were quoted at $389.10 a MT compared to U.S. cargoes being offered at $405.50. With pork margins compressed, Chinese buyers have slowed purchases of soymeal in recent weeks. Some traders expect soybean exports to be slow for the next month as Chinese crush facilities have ample supplies of soymeal and there is indications that near-term demand for the feed ingredient is weaker than expected.  

Informa Economics latest Forecast

Informa revised 2018 corn and soybean planted acreage estimates in their latest report. Informa estimates corn acreage planted at 89 million acres compared to the USDA estimate of 88 million acres. The group also estimates soybean planted acreage at 89.4 million compared to the current UDSA figure at 89 million acres. All wheat other than Durum was estimated at 12.4 million planted acres compared to USDA’s 12.6 million acres.  

 

Overnight Tenders

Taiwan Flour Millers’ Association purchased 83,350 MT of milling wheat from the U.S in an international tender that closed on Wednesday.

 

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

May 16, 2018 | Greg Martinelli | Views: 564

‘Yes’ is Just the Beginning

Your prospect agreed to buy — great, now the work begins

'Yes' is Just the Beginning

You spent months, maybe years calling on this prospect. You did all the right things and the customer said the magic word, “Yes” or “Ok” or “Sure” or “Why not” or maybe just nodded. Either way, you now have your first order from them. Many salespeople make the mistake of thinking this is the end of their role in the sale.

You have only just begun. Keep reading if you ever want a second order from them.

In your administration department, there’s account set up paperwork, credit applications and order entry information. In your production department, there’s coordinating any custom manufacturing requirements. In your distribution, we make sure packaging and freight are coordinated, with delivery instructions in place.

Are we done yet? Not yet. This is just your internal coordination. Often, we call on a retail buyer or owner, who aren’t the end user or seller of our products. This is where the real work begins. You need to coordinate all the above-mentioned areas with their store locations and warehouses.

I can hear you now, “I don’t do all that” or “That’s not my job” or “We have people that do all that” Well, maybe, but don’t count on it. Often, new sellers are surprised to discover the internal process of a sale is more difficult than selling the actual customer. If you just spent weeks or months making promises to sign the prospect, make sure it happens just as you promised. If not, it’s unlikely you will get another order.

Ok, now that the nitty gritty is over, are we done? Can I go spend the commission check now? Not yet. That was just the detailed work it takes to get a product from your point A to the customer’s point B. Now you have to make your product perform and get your customer to reorder.

Ensuring our product performs

This includes product training, in-store setup, ensuring inventory is stocked, displayed and priced. If in a retail setting, there’s product training to be done for the store employees. You want the store employees to know how your product performs compared to the competition. Especially if the retailer also carries one of your competitor’s product lines. If your customer is in crop or animal production, your product has an application or feeding program. This needs to be followed to reap the benefits of your product.

Sound like a lot of detail work? Certainly. Feel like celebrating the sale and skipping all these details? Certainly. Are you going to? Not if you want a reorder.

When training and coaching salespeople, they often will say they don’t want to appear “salesy”. We all know what they are referring to. They want to use consultative selling skills and not use high-pressure tactics that seem shady or annoying. Great, I agree. However, these same salespeople will then tell me how poorly they follow up after a sale is made. “Why” I ask them. “Oh, I get so busy” or “I just don’t think I have to do it all!” Sure, we’re all busy but it’s a poor excuse. In addition, making promises to your prospect to get the sale and then not following through is about as “Salesy” as you can get.  

Start today and set yourself apart by following through on the sale from the moment you get the “Yes” until you get the next order – and the next!

Now that we understand “Yes” is just the beginning, join us next time in Coach’s Corner when we discover how “No” is just the beginning in our sales process.

May 15, 2018 | Grain Hedge Insights | Kevin McNew | Views: 417

Planting Progress Surges Ahead

USDA planting estimates beat trade expectations

Planting Progress Surges Ahead

Headlines:

  • USDA corn and soybean planting estimates exceed trade expectations
  • Rain expected over the Dakotas and Minnesota
  • US-China trade talks spur rally in soybeans

 

Beans Buoyed by Policy Movements

 

Soy prices escalated Monday after news hit that President Trump would would open the US market to China’s telecom manufacturer ZTE.

Some press outlets were reporting that the White & China reached a deal that would prevent ag products from having tariffs imposed in exchange for US access by ZTE

The bean market viewed this news as a sign that US/China would come to some resolution on broader trade issues.

However, just before the close US Commerce Sec Ross said the “Gap remains wide between the US, Chinese Demands on Trade” which took some of the momentum out of the rally.

 

Planting Progress Hits Stride, But Some Areas Lag

 

USDA’s planting progress showed US corn at 62%, another nice boost from last week’s 39% and above trade estimates at 59%.

The problem areas of MN/ND gained grown this week moving to 40% and 35% planted. SD still struggles at only 21% planted.

For soybeans planting pace hit 35% that was up from 15% from last week and above trade estimates of 30%

 

 

 

NOPA Crush Today

 

NOPA Crush estimates are coming out today with analysts pegging the number at 161 MB.

The last two months have seen well above expectation crush figures.

Spot crush margins are record-high for this time of year which is encouraging full-throttle processing at US plants.

 

Weather Outlook

 

The trade may start to become concerned with some planting delays in SD and parts of MN/ND leading to switching out of corn.

May 15 is generally a suggested date when corn may get switched and with 80% of SD corn yet to be planted as of Sunday then there may be issues.

The latest GFS weather model shows 1 to 3 inches in parts of E SD/ND & MN on Fri/Sat so producers won’t get much chance to catch up

Overnight Tenders

South Korea's KOCOPIA rejected all offers and made no purchase in a tender for up to 55,000 tonnes of corn which closed on Tuesday. The low offer was $229 CIF from South Africa, but prices were considered too high by the buyer.

Japan's Ministry of Agriculture tendered for 89,937 MT of food-quality wheat from the United States, Canada and Australia in a regular tender that will close late on Thursday.

Egypt's GASC set a tender on Monday to buy an unspecified amount of wheat from global suppliers for shipment from June 15 to June 25.

 

 

 

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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May 14, 2018 | Grain Hedge Insights | Kevin McNew | Views: 377

Corn Traded Lower in the Overnight

Trend for higher corn prices is still intact

Corn Traded Lower in the Overnight

Headline

Grains mixed in the overnight. Trump closer to proposing revisions to RFS. Bullish corn trend still intact.

 

Summary

Corn prices traded slightly lower in the overnight. The trend for higher corn prices is still intact despite the pullback in Friday’s trade. Multiple support levels are just below current prices. The December contract is currently trading at the 20 day MA and prices are also trading at previous resistance level from April 2nd and 10th. Trendline support is around $4.07 and the 50 day MA sits at $4.09. The July KC Wheat contract slipped another 4 cents in the overnight on improved weather outlook in the Plains. Precipitation on Wednesday and Thursday should bring some moisture into some of the driest areas of the winter wheat crop. Some short covering in soybeans this morning as prices reached the bottom side of the range it has traded in since March 7th.    

 

Trump Close to Proposing Changes on U.S. RFS

The Trump administration says it is in the last stages before proposing changes to the U.S. Renewable Fuel Standard. The changes would include a temporary lift in the ban on sales of higher ethanol blends during summer months. This could make E15 available year round and improve ethanol demand. The plan will propose counting ethanol exports toward the annual biofuels quota and reducing the number of small refinery waivers.

 

Brazil

The Brazilian oilseed group Abiove increased Brazil’s 2017/18 soybean production forecast to 118.4 MMT. This compares to the latest USDA forecast of 117 MMT.  Abiove also increased Brazil’s soybean export forecast to 71.2 MMT. USDA’s May forecast estimated 73.3 MMT of soybeans would be exported from Brazil in the 17/18 crop marketing year.

Argentina

Corn and soybean harvest has been slowed by humidity and precipitation over the last week. Corn harvest has progressed into the center of the Agricultural area. Soybean harvest was 66.7% complete last Thursday, while corn harvest was only 33.3% complete. The Buenos Aires Grain Exchange maintains their soybean production forecast at 38 MMT (May USDA 39 MMT) but believes it is possible that recent weather has made further reductions in the crop.

 

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

May 11, 2018 | Grain Hedge Insights | Kevin McNew | Views: 450

Wheat Faces Biggest Weekly Fall Since Mid-March on USDA Forecast

Grains Down in the Overnight

Wheat Faces Biggest Weekly Fall Since Mid-March on USDA Forecast

USDA Report Signals Change in Corn, Status Quo for Wheat/Beans

For corn, USDA came in a bit higher than the trade on NC carryout with USDA pegging it at 1,682 MB versus a trade pre-report average of 1,628 MB. Nonetheless this is a big drop from old-crop carryout at 2,182. Global stocks were a big surprise at a slim 159 MMT. If realized that would be the lowest global cushion since 2012.

 

Beans had a surprisingly low US new-crop carryout at 415 MB, well below trade estimates of 535 thanks to a meteoric rise in US exports of 225 MB on the year that  USDA has penciled in. The soy trade is obviously skeptical of that result given the soy market failed to hold early gains after the announcement. Winter wheat production was higher than expected which led to US stocks only slightly off of this year’s 30-year high carryout relative to use. At 955 MB of new-crop stocks projected for 2018, that means the US still is plagued by nearly a half a year’s worth of use on hand at the end of the year.

 

Brazil Rain Outlook Diminishing

The latest GFS/EC weather models point to some rain potential next Tuesday and then a better total a week out in key growing area of Parana. The 2nd largest state for Safrinha corn has not seen any meaningful rain since April 2nd. USDA lowered their Brazil corn crop forecast to 87 MMT from previous the estimate of 92 MMT. The biggest state of Mato Grosso has seen limited rain since mid-April but has not been as parched as Parana.

Export Tenders

South Korea’s MFG passed on 70,000 MT of corn after receiving offers it said were too high. Taiwan’s MFIG bought 65,000 MT of corn with optional origin from Brazil or the US.


 

The risk of trading futures, hedging, and speculating can be substantial.

May 10, 2018 | Grain Hedge Insights | Kevin McNew | Views: 421

Export Sales Miss the Mark This Week

Wheat, corn and soymeal all missed analyst estimates

Export Sales Miss the Mark This Week

Headlines

  • Grains mixed in the overnight
  • Ethanol production climbs as stocks fall
  • Export sales miss the mark this week
  • WASDE

Weekly Ethanol Production Climbs

Ethanol production increased this week to 1.040 million bpd, up from 1.032 million bpd LW. TW production was 3.4% above last year during the same week, while cumulative YTD ethanol production has averaged 2.3% above LY. U.S. Ethanol stocks declined to 21.964 million barrels from 22.142 million barrels LW. Stocks remain below LY by 4.7%.

 

Export Sales

Wheat, corn and soymeal all missed analyst estimates when it came to export sales this morning.  Old crop wheat sales were down 85% from LW. Old crop corn sales were down 32% from LW. Soymeal reported a marketing year low, down 63% from LW.

 

 

Actual

   Estimated

   Last Week

Wheat-OC

  35

   0-350

   234

Wheat-NC

  48

   200-350

   210

Corn-OC

  695

   700-1,000

   1,019

Corn-NC  

  90

   50-300

   49

Soybeans-OC

  354

   300-600

   416

Soybeans-NC

  278

   100-300

   469

Soymeal-OC

  90

   100-400

   246

Soymeal-NC

  -6

       -

   61

 


 

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

May 09, 2018 | Grain Hedge Insights | Kevin McNew | Views: 534

Corn, Soybeans Steady to Slightly Higher as Rains Slow Planting

Grains flat to down in the overnight session

Corn, Soybeans Steady to Slightly Higher as Rains Slow Planting

Headlines

Grains slightly lower in the overnight. Argentina weather damages soybean quality. China ramps up inspections on U.S. pork imports.

 

Weather

Additional precipitation is expected across NE, IA, S. MN, WI, N. IL and MI over the next 1-5 days, bringing 2-3 inches across the central and northern midwest. The 6-10 day forecast shows additional precipitation is expected in MO, E. KS,  W. OK and parts of the TX panhandle which will benefit the winter wheat crop.

 

South American Weather

Rains in 6-15 day forecast for central and southern Brazil will help late pollinating corn. Heavy rains recently in Argentina has bogged down harvest and damaged crop quality. Rosario grains exchange said that in some areas waterlogged soybean pods have sprout or burst before being harvested which will lower Argentina soybean prices. Rains are expected to ease in 6-15 day forecast which will help with harvest progress.

 

Trump Renewable Fuel Meeting

Following a closed door meeting in the White House, sources say that Trump will NOT implement a cap on renewable fuel credits. The President expressed that he is considering letting exported ethanol count towards the RFS mandate. He also seeks to make E15 available all year long.  Senator Cruz considers the meeting a win-win while Senator Grassley was supportive of the efforts to increase higher ethanol blends but expressed caution on the ethanol export plan. Ethanol RINs sold off following the White House meeting.

China Increases Checks on U.S. Pork Imports

WH Group Ltd Director said “ports are opening and inspecting every cargo that arrives.” This compares to “random” checks in the past. The checks increase the amount of time that the products sit in the port from just days up to two weeks. USDA attache in Beijing noted in an April 30th report that inspection and sampling efforts were increased.

This news comes after China announced it was stepping up quarantine checks on apples and logs from the U.S. after “detecting pests in the imports”.  Many see these efforts as a warning after trade tensions between the U.S and China have increased.

 

 

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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