March 22, 2017 | Grain Hedge Insights | Kevin McNew | Views: 80

US Equities and the Dollar Index Come Under Selling Pressure

Rain is still in the cards for the coming weeks over the Southern Plains.

Grains inched lower overnight with KC wheat continue to take the leader position on the downside. In outside markets, crude oil was pushing into new lows, off 60-cents a barrel and the US dollar and equities were pointing slightly lower following yesterday’s sharp slide.

 

USDA reported a 120,-000 MT of HRW wheat was sold to Saudi Arabia and 120,000 MT of soybeans were sold to China.

 

Rains is still in the weather cards for the coming weeks over the Southern Plains. However, overnight model guidance shows less rainfall (vs. yesterday) through month's end across the Texas and Oklahoma US wheat crop areas, but maintains near to above widespread 1.0 inch totals across much of Kansas.

 

In China, soy crush margins continue to come under pressure with crush margins dipping to their lowest level in 18 months. Rapid expansion of the soy crush margin in the Fall of 2016 helped push a buying spree of US soybeans, but with China’s margins under pressure and South America competition, it could be a dismal period of US export activity.

 

 

Yesterday, US equities and the dollar index came under selling pressure. In part, the dollar continued its lower trend on the Fed’s announcement they would take a less hawkish approach to future rate hikes than investors had thought. Furthermore, stocks are seeing pressure in auto- and consumer-sensitive areas suggesting the economy may not be as strong as expected. Also, investors will be watching the political theater around Thursday's House vote to repeal Obamacare, as these battles are threatening to push out tax reform and more stimulus well into the end of 2017 or 2018. A defeat in Thursday's vote would send a clear signal that the rest of Trump's agenda — taxes, the budget, and infrastructure — could be on shaky ground.

 

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

March 21, 2017 | Kevin McNew | Views: 86
March 21, 2017 | Tech Talk | Charlie Trauger | Views: 808

How Old is That Mission Critical Software That You Are Using?

It's never an easy decision to update old software but companies will reach a point where the future risk outweigh the present pain

How Old is That Mission Critical Software That You Are Using?

The issues that several of the large airlines have had recently caught my eye when they experienced delays, all due to software. The primary reason for the issues was after an interruption, the old systems had issues reconnecting to the newer systems. When the power goes out, or some other event, it can take hours, sometimes days to get everything communicating again. Kind of like my farm when the duct tape or baling wire breaks!

If, or more likely when you have a software related failure, have you tested your backup system? What if that does not work, what is your plan then? So who gets the blame? IT? It really needs to be on the radar of top management, but in many cases, it is not.

There are many reasons we end up keeping and maintaining old software applications. Mergers, acquisitions, as well as a just plain old lack of time and capital to upgrade. Not to mention the downtime to install, test, and learn new applications as that creates an immediate pain before you solve a future pain. Never an easy task or decision.

One thing to look at is what is the cost to support it today?  What is the loss of business from any disruptions in older software applications? Inconvenience? Total disaster, or perhaps frustrated employees and customers. It might be worth taking a hard look at where your business is in regards to this. Software can fail due to hackers, and lack of redundancy, but more likely human prone issues prevail.

Not that the Government might be the best comparison, but 75% of Fed IT spending is on operations and maintenance of old technology – just keeping the lights on! www.gao.fov/products/GAO-16-468

What is your company spending on just keeping your old systems running? This really needs to be decisions made at the board level.

It might be a good idea for you to take a good assessment of all the systems in your business and perhaps test out some of your back-ups but taking them offline (during a slow time) and see if what you think you have really works.

There is some good news – SaaS solutions for many business related software applications are available now. Many are low cost and take the burden off the company for ongoing maintenance including upgrades, back-ups, etc. 

At least if something happens at your business, you probably have much more comfortable places to wait out the problem than in an airport or on a plane!


Charlie Trauger is Global Director of Agriculture for GlobalView Software, Inc. of Chicago IL.  He received his Bachelor of Science degree from the University of Nebraska and also completed course work in computer science from Metropolitan Technical College in Omaha, NE.  Charlie was raised on a row crop and cow calf operation in Nebraska and is still involved in the family business.  Charlie has spent over 25 years in the agricultural software and data business and recently relocated back to the family farm in Nebraska. Follow him on Twitter @charlietraug

March 21, 2017 | Grain Hedge Insights | Kevin McNew | Views: 172

USDA State Offices Release Winter Wheat Condition Scores

Grains Continue to Sink Lower

Grains continued to sink lower following Monday’s sharp sell-off in wheat. In outside markets, the US Dollar index fell below 100 for the first time since early February while crude oil was trying to find stability in the $49 a barrel territory.

 

After the market closed on Monday, USDA state offices in OK/KS/TX released their winter wheat crop condition scores which showed a mostly deteriorating crop. Kansas slipped from 42% good-to-excellent last week to 40% this week, while OK saw a similar deterioration from 40% to 38% over the past week. TX slipped from 35% last week to 34% this week. While these ratings are substantially below last year’s ratings at this time of year (47% to 63%), they are only slightly off of the long-term averages for the 3-state region, generally around 40%.

 

Japan's Ministry of Agriculture is seeking to buy a total of 117,689 tonnes of food quality wheat from the United States, Canada and Australia in a regular tender that will close late on Thursday.

Yesterday, Agroconsult a private analyst pegged Brazil’s soybean crop at 111 MMT up from their previous forecast of 107.8 MMT and above USDA’s estimate of 108.

 

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

March 20, 2017 | Kevin McNew | Views: 111
March 20, 2017 | Grain Hedge Insights | Kevin McNew | Views: 169

HRW Wheat Belt Expected to See Beneficial Rains

Grains Start with a Good Bounce on Sunday Night

Grains started with a good bounce on Sunday night but by early Monday gains were starting to erode.

 

USDA reported a 132,000 MT of corn was sold to South Korea.

 

Friday’s CFTC report on managed money showed funds had sold more positions than originally thought in the past week. The soybean long was off, the wheat short was larger than expected and corn went from net long to net short.

 

The US HRW wheat belt is expected to see some beneficial rains in the coming two weeks with about 75% of the crop expected to see beneficial moisture. In international news, Turkey denied reports that it has banned imports of certain products from Russia, after traders warned shipments of Russian wheat to its second-biggest export market face disruption. But, Turkish buyers are said to be on hold for purchasing Russian ag products.

 

In South America, Brazil is about 62% harvested on beans vs 56% average. In Argentina, port workers at Rosario are said to be taking a one-day strike on March 30 to demand better wages. About 80% of Argentina’s exports go thru Rosario.

The Taiwan Flour Millers' Association has issued an international tender to purchase 98,200 tonnes of grade 1 milling wheat to be sourced from the United States.

 

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

March 17, 2017 | Kevin McNew | Views: 122
March 17, 2017 | Grain Hedge Insights | Kevin McNew | Views: 90

Weekly Cash Comments

Weekly Cash Commentary for week ending 03/17/2017

Cash grain basis showed modest strength this week after futures prices stabilized en-route to a two week slide. For the week, US average corn basis was up 1.1 cent a bushel while soybeans were higher by 1.0 cents per bushel.

 

Weekly Basis Changes-

  Corn Soybeans
US Average +1.1 C +1.0 C
Processor +1.9 C +0.6 C
River Terminals +2.1 C +3.8 C

 

Corn basis had a little more life at ethanol plants this week as processors bid basis higher by 1.9 cents on average. Ethanol production surged this week following a 5-week decline. Farmer selling has slowed considerably thanks to the slide in futures and with a warm spring approaching soon, it seems likely corn plants will have to pull basis up to attract sales in the coming months. For river terminals they were also higher on the week as solid export business continues to keep grain outflows on the move.

 

For soy plants, they continue to have no real interest in bidding up basis with only a modest 0.6 cent advance on the week. Meanwhile river terminals were up 3.7 cents on the week. River basis for soybeans continues to be below norm for this time of year and will eventually need to move higher as we approach delivery of May futures. Of the two, soybean basis seems to have the most upside in the coming 6 weeks as compared to corn.

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

March 17, 2017 | Grain Hedge Insights | Kevin McNew | Views: 148

Grains Listless in Overnight Trading

US Government weather outlook predictions

Grains Listless in Overnight Trading

Grains drifted listlessly in overnight trade with no firm direction heading into the weekend.

 

The Buenos Aires Grains Exchange said that Argentina’s corn and bean crop is benefitting from optimal soil moisture. If the positive trend in yield expectations is strengthened over the weeks ahead, volumes at the end of the season could be higher than our current estimate," the report said. Argentine soy planting starts in mid-October, with harvesting ending mid-year. Corn goes into the ground in September through December. Harvesting is usually from March through July. The report said 10 percent of the 2016/17 corn area has been brought in so far. Although harvesting machines have gotten bogged down in the wettest areas, the fields that are being harvested are showing better-than-expected yields, it added. The exchange kept its 2016/17 corn crop estimate unchanged at 37 MMT.

The latest outlook from the U.S. government predicts warmer-than-average weather that could have a game-changing impact when the U.S. corn and soybean planting campaign gets underway in a few weeks. The U.S. Climate Prediction Center on Thursday said the warm trend will start in April and strengthen through June, except in the Dakotas and Minnesota.

 

In the US Midwest, the SRW wheat crop should benefit from milder/wetter pattern, allowing regrowth after freeze event. Plains wheat warm/dry over next week, depleting moisture; at least SW 1/3 of belt misses relief late next week.


 

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

March 16, 2017 | Grain Hedge Insights | Kevin McNew | Views: 181

Grains Move Higher in the Overnight

USDA Weekly Exports Show a Good Week for Corn

Grains moved higher overnight led by soybeans as they moved above $10 a bushel on front month May. Outside markets saw crude oil and equities higher while the US dollar hit their lowest mark since early February.

 

USDA said exporters sold 120,000 MT of Hard Red Winter wheat to Algeria and 120,000 MT of soybeans to unknown destinations.

 

Traders are keenly watching the weather outlook in the dry Southern Plains. Warm temperatures Thursday through Sunday will increase some of the need for moisture as the crop develops further. The latest weather models show a rain system for Mar. 22-24 in this region but it will likely miss where the Texas and Oklahoma Panhandles miss out A second system is expected in western Hard Red Winter Wheat areas Mar. 26-28 but again the SW Plains are expected to miss out.

USDA weekly exports showed a good week for corn with both old- and new-crop sales beating the high end of expectations. Meanwhile wheat was at the low end of expectations for both old- and new-crop while soybean old-crop sales were at the low end of expectations but new-crop exceeded expectations.

 

Export Sales-

 

Actual

    Estimated

Wheat - OC 

 264

    250-450

Wheat - NC

 74

    25-200

Corn - OC

 1,255

    700-1,000

Corn - NC

 218

    0-200

Soybeans-OC

 471

    400-600

Soybeans-NC

 225

    0-200

 

On Wednesday, the US Federal Reserve raised interest rates as expected and signaled that they expect a total of 3 rate hikes in 2017 and 3 more hikes in 2018 based on the strong economic signals.

 

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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More Articles

Weekly Cash Comments

March 24, 2017 | Grain Hedge Insights | Kevin McNew

Grain basis continued to show little upside life this week even with the ongoing slide in futures prices. For the week, spot corn basis across the country managed a 1.3 cent advance while soybean basis was up 0.8 cents a bushel.

[Read More]