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April 22, 2016 | Grain Hedge Insights | Kevin McNew | Views: 201
April 22, 2016 | Grain Hedge Insights | Kevin McNew | Views: 198

Grains Head Lower in the Overnight

Markets seemed poised to turn to the reality of the fundamentals.

Grains head lower overnight with soybeans taking the biggest hit giving up 20 cents. In outside markets, crude oil recovered from yesterday’s losses while equity futures had a slightly weaker tone in the night session.

 

Markets seemed poised to turn to the reality of the fundamentals. Overnight, Goldman Sachs stated to clients “While this recent rally has the potential to run further to the upside ... we believe that it is not yet driven by a sustainable shift in fundamentals.” Yesterday, the Buenos Aires Grains Exchange dropped its 2015-16 soybean crop estimate to 56 million tonnes from its previous 60-million-tonne forecast. Minutes later the agriculture ministry marked its estimate down to 57.6 million tonnes from 60.9 million tonnes. Some analysts have been talking about a 15 MMT loss in Argentina but the reality could be something substantially smaller like 5 MMT.

 

Corn and wheat made bearish key reversals on the charts yesterday which could cause selling pressure to intensify. Brazil corn sees showers expand into the southwest 2/3 of the belt early next week to ease stress. Showers remain limited in the northeast 1/3, leading to ongoing stress into early May. Rains in the far south stall soy harvest, but the 6 to 10 day turns drier. In Argentina, rains (.25 to 1”, locally 2”) were confined to northeast fringes of the corn/soy yesterday. Light weekend showers (.25 to .75”, locally 1.5”) cross the belt. Drier conditions then settle in for much of the next 10 days. Harvest should improve in the southwest 2/3 of the belt, while recovery in the northeast 1/3 will still be very slow.

 

NOTE: CME Margin Rates for soybeans have increased from $1,500 to $1,750 per contract on hedge accounts

 

In outside markets, crude oil was moving higher and seemed poised to make a run at the near-term high of $44.45 a barrel. Later today the Baker Hughes rig count will be out and will likely show a continued decline in active US rigs.

 

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

April 21, 2016 | Grain Hedge Insights | Kevin McNew | Views: 221

Weekly Export Sales Numbers

Wheat has Blown thru Some Key Levels

The wet conditions continue to hamper operations in NE Arg but dries in the
SW part of the country with some harvest resuming next week. As the storm system moves north, it is expected to give some relief to the drier areas of the southern Brazil safrina crop. 
 

Short covering in wheat hit day 3 hard yesterday with total gains approaching 50-cents over that 3-day period. With wheat, you have to ask whether we really need this big a rally in the face of burdensome supplies, lackluster export demand and better than normal crop conditions in US winter wheat. It's difficult to pick a top, but in the case of wheat we have blown thru some key levels and made our export deals even less competitive in the world's eyes.

 

WEEKLY EXPORT SALES

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

Corn           1202.8       900-1,200       123.1     100-200

Soybeans     407.7           100-200       339.7     200-500

Wheat         295.1              0-300        325.6    100-250

 

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

April 20, 2016 | Grain Hedge Insights | Kevin McNew | Views: 242
April 20, 2016 | Grain Hedge Insights | Kevin McNew | Views: 216

Soybeans Weak in the Overnight Session

In crude oil, prices were off about $0.80 a barrel overnight

Soybeans were weaker overnight following yesterday’s 30-cent advance while wheat and corn held onto modest gains.

 

Overnight, new-crop November soybeans took a run at the milestone $10 mark, but fell short hitting an intra-day high of $9.99 before returning to the low $9.90 mark. Funds were heavy buyers on Tuesday, buying 25,000 contracts.

 

This morning’s weather forecast suggests Argentina’s corn and soybean harvest could resume in much of the country next week after being plagued by flooding which put harvest at a standstill and potentially damaged crops there. In Brazil, stress to the 2nd season corn crop in the South may be eased as wet weather and cooler temps are expected early next week.

 

In crude oil, prices were off about $0.80 a barrel overnight after yesterdays API crude stocks number came in higher than expected. Average expectations were for a 1.6 million barrel build, but came in at a 3.1 million barrel build. Also pressuring crude, Kuwait oil workers called off a three-day strike, a key support that kept oil prices afloat after major global producers failed to agree to a production freeze last weekend.

 

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

April 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 297
April 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 146

Corn and Soybeans Higher Overnight

Crude Oil continues to find support

Corn and soybeans were higher overnight while wheat gave up some of yesterday’s impressive gains. In outside markets, crude oil continued to find support from a Kuwait oil strike while silver reached its highest mark in a year.

 

After the close Monday, USDA’s crop progress report showed 13% of the corn crop planted versus 4% last week and an expectation of 14%. Wheat condition was also up following beneficial rains in HRW wheat country. The percent of the crop rated good-to-excellent inched higher to 57% versus 56% last week.

 

Weather over the next few weeks continues to favor crop planting. Patchy showers linger in the central Midwest today, scattering into the southwest again tonight/tomorrow and shifting through the Delta/eastern Midwest by Thursday. The heaviest totals occur in the Lower Mississippi Valley, and only minor interruptions are expected to Midwest seeding. Showers scatter into the northern/eastern Midwest again by Sunday/Monday, but broader Midwest/Delta coverage occurs at the middle of next week and again early the following week. While the more active pattern will hinder corn seeding, risks of excessive rain are limited, and fieldwork still occurs in between rain events.

 

In South American weather, the latest model runs show wetter Argentina weather in the coming week although there is no agreement from various models. But, if realized, there would be some additional harvest delays across key summer crop areas. The second week outlook is still looking better for most of Argentina.  In Brazil, there is some potential rain for center west, center south and northeastern Brazil next week.

 

In crude oil, prices continued to be supported from a Kuwait oil workers strike, now in its third day. However, analysts said Kuwait's disruption would likely be brief and investors would soon refocus on the market's oversupply given the failure of major exporters on Sunday to agree to freeze output to avoid worsening the glut.

 

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

April 18, 2016 | Grain Hedge Insights | Kevin McNew | Views: 185
April 18, 2016 | Grain Hedge Insights | Kevin McNew | Views: 208

Soybeans Rose for a Sixth out of Seven Sessions

In outside markets, Oil was off sharply

Grains were mixed overnight with soybeans advancing to fresh 8-month highs and wheat also posted positive gains. Corn was flat in early trade. In outside markets, oil was off sharply but recovered from early losses of over a $2 a barrel slide on Sunday following the failed oil minister meeting in Doha.

 

Soybeans rose for a sixth session out of seven, with heavy rains in Argentina raising fears of crop damage. Also, current Brazil President Rousseff suffered a humiliating loss in a crucial impeachment vote in the lower house of Congress on Sunday and is almost certain to be forced from office, which could add more strength to the Brazilian Real. In Argentina, Rosario grains exchange left its soy crop forecast unchanged at 59 million tonnes, saying it would take time to gauge the damage from rains. Rain in Argentina was somewhat restricted during the Friday into Sunday morning period with some welcome drying noted. Rain fell from La Pampa and Buenos Aires to southern Santa Fe and southern Entre Rios. Amounts varied from 0.05 to 0.75 inch most often, although as much as 1.69 inches occurred in southeastern Entre Rios. Rain will move through central and northeastern Argentina today and Monday with some of it heavy from Uruguay and Entre Rios to northeastern Santa Fe and Corrientes. The rain event will become confined to Corrientes, northeastern Santa Fe and eastern Chaco during mid-week this week and showers may linger in the region daily through the weekend.

 

Rainy weather occurred as expected across nearly all of the U.S. hard red winter wheat country. A few counties in the Texas Panhandle did not receive much precipitation. In contrast, rain totals in portions of southern Nebraska, northern to south-central Kansas and areas in central and southwestern Oklahoma to north-central Texas reported 2.00 to more than 5.00 inches.

 

Oil prices pared some of the over 5 percent losses seen in early trade, after the world's largest oil-producing countries failed to strike a deal to freeze output. Some 18 oil-exporting nations, including OPEC members, had gathered in Doha, the capital of Qatar, over the weekend in an attempt to agree to stabilize output at January levels until October 2016. The pact fell apart after Saudi Arabia demanded that Iran join in.

 

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

April 13, 2016 | Grain Hedge Insights | Kevin McNew | Views: 306

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Grains Weaker Overnight

April 27, 2016 | Grain Hedge Insights | Kevin McNew

Grains were weaker overnight but seemed to finding some pullback heading into the morning break. Meanwhile, crude oil continues to hit fresh highs on this rally, posting a $1 a barrel gains going into the day while equity futures were sharply lower.

[Read More]

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