July 14, 2017 | Grain Hedge Insights | Kevin McNew | Views: 191

Weekly Cash Comments

Weekly Cash Commentary for week ending 07/14/2017

Grain basis was mostly steady this week in spite of wide swings in the underlying futures market. On the week, US average corn and soybean basis were unchanged.

 

Corn basis continues to show more strength in the Western and Northern Plains as dry conditions and heavy cattle feeding activity continues to underpin the market. In North Dakota, ethanol plants there raised their basis 3 to 9 cents a bushel over the last week. But other plants around the country were more stable, and stretching into the Eastern Cornbelt there was some modest weakness.  River terminals as a group were off 2 cents a bushel with the Gulf bid giving up 1 cent on the week.

 

In soybeans, basis levels were 2-cents weaker at crushing plants and 4-cents weaker at river terminals. There was some modest improvement in bean basis in the Central and Northern Plains on the week.

Weather in recent weeks has spelled some problems for corn yield in certain regions of the country. Private forecaster Planalytics, utilizing satellite imagery data, has pegged the US corn yield at 165.3 bushels per acre, which is 3 bushel an acre below their trend yield forecast. The worse state is SD where they are at 24 bushels below trend. So far, there has been only modest movement in New-Crop 2017 corn basis with the last 30 days seeing modest gains in the Western Plains of OK/KS/NE. If yield continues to be subpar pin these areas and with strong cattle feeding, we would expect basis levels in the WCB to start to respond higher. 

 

 

To Learn More about Planalytics Ag Business Services contact Jed Lafferty, (610) 854-2245

 

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

July 14, 2017 | Grain Hedge Insights | Kevin McNew | Views: 171

Latest Weather Models Still Show Significant Heat in the Central Plains

Grains trying to recover some of Thursday's sharp sell-off

Grains tried to recover some of Thursday’s sharp sell-off.

 

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The latest weather models still show significant heat in the central Plains with Kansas expected to see 8 days running of better than 100 degree temps and Nebraska should see 4 days besting the 100-degree mark. For Iowa and states to the East it seems temperatures should stay out of the extreme heat through the end of July. Moisture should also be a regular occurrence in these areas as well over the next two weeks.

 

Private forecaster Planalytics came out with their latest yield estimates, pegging US corn at 165.3, off from their trend yield estimate of 168.2 at the beginning of the season and well below USDA’s own estimate of 170.7 on Wednesday. For soybeans, they see yields at 46.7, slightly below their own trend of 47.1 and USDA’s estimate of 48.0.

 

 

The Buenos Aires grains exchange cut the forecast for Argentina's 2017-18 wheat area to 5.4 million hectares on Thursday from 5.5 million hectares seen previously, citing excess rain and humidity during the season. The Rosario exchange on Wednesday cut the estimated planted area to 5.45 million hectares from 5.6 million hectares previously.

 

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July 13, 2017 | Grain Hedge Insights | Kevin McNew | Views: 147

Weekly Export Sales Numbers Are In

Grains Had More Losses in the Overnight Session

Grains had more losses overnight with soybeans leading the complex lower on a 20-cent slide.

 

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Weather models have started to lessen the heat impact in the Plains for the coming two weeks. In addition, scattered rains could provide some modest relief in some of the drier areas. The drought monitor this morning showed mild expansion of the drought over the past week in Iowa but with more intense expansion in SD/ND/MT.

 

Yesterday’s USDA report showed better than expected wheat production by a small margin but combined with lower feed use and exports, this led to carry-out being raised to 938 MB up from 924 last month and well above 876 expected by the trade going into the report. For corn and beans, USDA left their yield forecast unchanged from their trend estimate, albeit even though crop conditions are subpar compared to normal.

 

Export sales were mixed this morning with new-crop corn and soybean sales beating expectations. But old-crop corn was disappointing coming in at a meager 161,000 MT vs 300-500,000 expected.

 

Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

357

300-500

Corn - OC

161

300-500

Corn - NC

279

50-200

Soybeans - OC

228

200-400

Soybeans - NC

455

50-200


 

 

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July 12, 2017 | Grain Hedge Insights | Kevin McNew | Views: 126

USDA Crop Out Today at 11 am CST

Grains Lower in the Overnight

Grains were lower overnight as grains take back some of the gains made on the recent highs. USDA’s crop report comes out at 11 am CDT, which should provide some further gyrations in the market.

 

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The US weather continues to point to extreme heat in the Northwestern Plains for the remainder of this week, with the high temperature dome moving more to the East next week. July 18-Jul 21 Nebraska is expected  see highs above 100 in this 4-day period.

Precipitation over the next 2-week period should also be limited for the Plains and Western Cornbelt. Moisture totals will be running 1 to 1.5 inches below normal.

 

 

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July 11, 2017 | Kevin McNew | Views: 141
July 11, 2017 | Grain Hedge Insights | Kevin McNew | Views: 113

Grains Were Lower Overnight

Rains Bringing Relief in parts of Nebraska and Iowa

Grains were lower overnight taking back some of the steep gains posted in Monday’s trade session.

 

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After the close on Monday, USDA’s crop progress report showed a further deterioration in the grain crops. Corn and beans both dropped 2% in their good-to-excellent ratings with corn now at 65% good-to-excellent and soybeans at 63%. The trade had expected only a 1% drop on the week. For spring wheat conditions fell to 35% good to excellent, in-line with expectations and off from 37% previously.

 

Brazil’s CONAB kept their soybean crop estimate for 2016/17 unchanged at 113.9 MMT but bumped up their corn crop estimate to 96 MMT vs 93.83 MMT last month. USDA has Brazil’s soy crop at 114 MMT and their corn crop at 97 MMT.

Rains are bringing some needed relief to parts on NE/IA today. Lingering showers are expected for the rest of the week in the Central and Southeast Midwest. But the driest areas will continue to be SD, ND, parts of MN, IA & NE. Temperatures in NE are expected to soar into the 100s Jul 17th thru 20th.

 

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

July 10, 2017 | Kevin McNew | Views: 122
July 10, 2017 | Grain Hedge Insights | Kevin McNew | Views: 121

Grains Climb Higher to Start the Week

Weather Continues to be Hot and Dry for the Plains

Grains climbed higher to start the week fueled by extreme heat in the Western Cornbelt over the weekend.

 

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Weather for this week continues to point to hot and dry for the Plains and Western Cornbelt. Nebraska should see high temperatures over the next two weeks that range from 95 to 103 with no real chance of meaningful moisture over that two week period. However, just to the East in Iowa high temps will be mostly in the mid-80s over the next two weeks with limited precip. Rainfall is expected in the ECB over the next week with IL, IN & OH expected to see accumulations totaling 2 inches over the two-week horizon.

Wednesday brings new data from USDA with their monthly supply and demand estimates. US wheat production is expected to slip to 1.748 billion bushels from the June forecast of 1.824 driven by falling spring wheat production. For corn, analysts expect the US yield to fall to 169.6 vs 170.7 by USDA in June.

 

In international news, Iraq's state grains board has purchased about 50,000 tonnes of wheat from Australia. Egypt's GASC continues to be an aggressive buyer of wheat tendering twice over the last week.


 

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July 07, 2017 | Grain Hedge Insights | Kevin McNew | Views: 140

Next Weeks Rain Forecasts should promote Favorable Conditions for Crop Development

Grain Catapulted higher this week

US wheat futures were lower on Friday, retreating further from a two-year high touched earlier in the week, while corn and soybean prices also weakened. The price retreat comes despite further forecasts for hot dry weather in key US wheat-growing regions that have sparked worries about widespread production losses.

 

The most active wheat future (SRW) on the CBOT was down 1.2 percent after closing down 3.8 percent on Thursday. Wheat hit a two-year high earlier in the week of $5.74 ½ a bushel.

 

Exporters sell 143,000 MT of corn for delivery to Mexico, of which 11,000 MT is for 2016/2017 delivery and 132,000 MT for 2017/2018 delivery.

 

Showers Great Lakes/SE OH and TN Valleys/W Plains for the past day; low 90s W Midwest, 90s/low 100s C & NW Plains. Scattered showers in the OH Valley today and N & E Midwest late Sun through Wed (easing dry spots around Great Lakes). Showers next week to be more limited in C IL; dryness also to build in S ND/SD/N. NE/W. IA/SW MN. US spring wheat areas hottest (90s/100s) this weekend and 6-10 day; notable yield loss for at least west two-thirds of belt.

 

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Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

375

300-500

Corn - OC

140

350-550

Corn - NC

74

0-200

Soybeans - OC

365

200-400

Soybeans - NC

73

50-250

 

 

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

July 06, 2017 | Grain Hedge Insights | Kevin McNew | Views: 579

Wheat Down in Early Morning Trading

Corn also Heading Lower for the first time in five sessions

Wheat Down in Early Morning Trading

Corn traders have been back and forth for a month now on whether the weather forecasts are threatening to the US crop, but potentially damaging hot temperatures have been absent since mid-June. The forecast for the next two weeks is largely devoid of heat but is also lacking rainfall, which is not viewed favorably by the market as many areas of the Corn Belt have had below-normal precip in recent weeks. Most of the US Corn Belt has not dealt with unseasonable heat since the first half of June and notably cooler temps have prevailed ever since. Weather forecasts as of Wednesday call for the continuation of average-to-cooler conditions for the next two weeks; but without abundant rainfall.

 

The situation in the Dakotas is different, though, as farmers there are dealing with a significant drought that has been laced with frequent bouts of extreme heat. And unfortunately, considerable relief may not be on its way anytime soon. Moisture stress focuses on 20-25% of corn; heat mainly limited to Plains. Limited showers and frequent 90s/100s (including yesterday) stress at least ⅔ of N Plains spring wheat in the next two weeks.

 

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USDA is reporting 4.72 MT of US Soybeans were crushed in May; which calculates to 157.25 million bushels. The following is crop progress reporting:

US Corn; 68% good-to-excellent vs 67% a week ago

US Soybean; 64% good-to-excellent vs 66% a week ago

US Spring Wheat; 37% good-to-excellent vs 40% a week ago

US Winter Wheat; 48% good-to-excellent vs 49% a week ago

US Corn; 10% silking vs 4% a week ago

US Spring Wheat; 59% headed vs 36% a week ago

 

The dollar’s bounce stalled on Thursday after the US Federal Reserve’s policy minutes failed to provide a clear picture of futures interest rate increases, although investors were reluctant to add bearish bets before some key US data. Federal Reserve policymakers were increasingly split on the outlook for inflation and how it might affect the future pace of interest rate rises.

 

 

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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