November 24, 2015 | Grain Hedge Insights | Cody Bills | Views: 326

Grains were Modestly Lower in the Overnight

Wheat had the biggest losses in the overnight

Grains were modestly lower overnight following Monday’s strong turnaround in prices. S&P futures were lower while crude oil was higher after Turkey shot down a Russian warplane overnight, increasing global tensions.

 

Wheat had the biggest losses overnight as USDA reported another uptick in US winter wheat conditions on Monday. Winter wheat is rated at 53% good-to-excellent versus 52% last week, but still off from last year’s reading of 58%. India's wheat planting has been delayed by at least a week due to high temperatures, threatening its output of the grain yet again after hailstorms during harvest earlier this year dragged down annual production levels for the first time since 2007.  Lower wheat acreage, down around 26% so far this season, in the world's No. 2 wheat producer.

 

In Brazil, the northern region has seen less rainfall than normal as the region is running 30% below normal. While there was a spurt of rain in the past week that helped seeding activities, rainfall of late has been irregular and the forecast for rain is somewhat limited. Predicted totals range between 70-110mm, below the norm of 133mm for this time of year.

 

Ukraine's corn harvest is likely to increase by 12% to 25.76 MMT next year due to a larger sowing area, analyst UkrAgroConsult said on Tuesday. Ukrainian farmers are likely to increase the area sown for the 2016 spring crops, including corn and oilseeds, after a severe drought forced them to cut the area sown for winter grains, UkrAgroConsult said in a statement.

 

Overnight, a Russian warplane was shot down by Turkey, which claimed the plane ignored the country’s airspace and repeated warnings. S&P futures (ESZ5) were lower on the news, while crude oil (GCLF6 / QMF6) was sharply higher on increased tensions.

 

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

November 23, 2015 | Grain Hedge Insights | Kevin McNew | Views: 404
November 23, 2015 | Grain Hedge Insights | Cody Bills | Views: 285

Grains Start the Week on a Down Note

In wheat news, France is set to export wheat to Indonesia for the first time since the 2008/09 marketing season

Grains started the week on a down note, with soybeans leading the sell-off to the downside while wheat and corn were slightly lower in quiet trade. In outside markets, S&P futures and crude oil were off slightly from Friday’s close.

 

Soybeans came under pressure as Argentina’s presidential election results. Conservative challenger Mauricio Macri turned Argentine politics on its head on Sunday, kicking the ruling Peronist movement out of power with a promise to liberalize the ailing economy and end a culture of divisive politics. For grains, this would mean an elimination of stiff export taxes and quotas that have restrained the country’s ability to ship to world markets.

 

In wheat news, France is set to export wheat to Indonesia for the first time since the 2008/09 marketing season after private animal-feed companies were attracted by unusually competitive French prices. Exporters have turned to French wheat to cover optional-origin deals after Ukrainian supply became less readily available and in view of relatively expensive prices for Australian wheat. French shipments have become cheaper due to a weaker euro and a slide in ocean freight rates, while exporters are keen to find overseas outlets for a record-large French wheat harvest after a slow start to the export season.

 

In crude oil (GCLF6 / QMF6), prices were off sharply on Sunday’s open, but recovered this morning as Saudi Arabia's cabinet said on Monday it was ready to cooperate with OPEC and non-OPEC countries to achieve market stability. The council (of ministers) ... stressed the kingdom's role in (achieving) the stability of the oil market and its continuous readiness and efforts to cooperate with all OPEC and non-OPEC countries to maintain the stability of the market and prices," the cabinet said in a statement following its weekly meeting.

 

S&P index futures (ESZ5) were little changed on Monday, coming off strong gains last week, with the S&P 500 posting its biggest gains in almost a year and the Dow Jones industrial average turning positive for the year.  The U.S. Federal Reserve is widely expected to raise interest rates next month as labor conditions continue to improve and inflation stabilizes. Geopolitical security issues also weighed on investors' minds with a lockdown in Brussels continuing for a third day as police hunt for a suspected Islamist militant on the run since the Nov. 13 attacks in Paris.

 

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

November 20, 2015 | Grain Hedge Insights | Cody Bills | Views: 385

Weekly Cash Comments

Cash Commentary for week ending 11/20/2015

Grain basis was mixed this week as soybean basis took a break from its steep incline since harvest to finish the week unchanged, while corn basis continued to press higher advancing 2 cents a bushel.

 

In corn, gains were largely driven by ethanol plants this week. As a group, they were up 3 cents a bushel, but in the Western Cornbelt there was fairly widespread gains of 5 to 10 cents a bushel.  At river terminals, basis levels were in line with the US average gain of 2 cents a bushel as Gulf export bids remained flat for the week.

 

For soybeans, the biggest driver this week was a lower Gulf basis, which gave up 6 cents a bushel. That had an impact at upstream river terminals, which lost 3 cents on the week. Soy plants were unchanged as a group for the week.

 

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

November 20, 2015 | Grain Hedge Insights | Cody Bills | Views: 271

Grains Mostly Lower in the Overnight with Soybeans Leading the Losses

USDA Reports that Corn, Soybeans and Wheat posting better than expected export sales for the week.

Grains were mostly lower overnight with soybeans leading the losses to the downside.  In outside markets, S&P futures were higher while crude oil was under pressure.

 

Thursday brought a round of unexpectedly good news for grain with USDA reporting that corn, soybeans and wheat posting better than expected export sales for the week.  Corn sales were 779,000 MT versus trade expectations of 500-700,000 MT while wheat was 722,000 MT as compared to expectations ranging from 200-400,000 MT. Soybeans were also well above expectations which were 700-1,100,000 MT, coming in at 1,797,000 MT.

 

In overnight news, the International Grains Council (IGC) trimmed its forecast for world corn production in 2015/16 by 3 MMT to 967 MMT, reflecting drought-related cuts to production in China, Ethiopia and South Africa. In world wheat production, IGC pegged 2015/16 at 726 MMT, unchanged from last month's forecast, with an upward revision from Ukraine (to 27.5 million from 26.0 million) offset by cuts for Egypt (to 8.5 million from 9.2 million) and Brazil (to 6.2 million from 6.6 million). The IGC also said that wheat's global harvested area for the 2016/17 season was forecast to fall by almost 1 percent to 221.8 million hectares. World soybean production in 2015/16 was projected to equal the previous season's record high of 321 MMT.

 

S&P futures (ESZ5) are heading for its biggest weekly gain since October. Traders will be watching  Federal Reserve Bank of St. Louis President James Bullard and Fed Bank of New York President William C. Dudley comments today for insight into the state of the US  economy.  Recent data has bolstered the case for raising borrowing costs for the first time since 2006, with the latest payroll report -- released after the Fed’s October meeting -- showing the biggest increase in hiring this year.

 

Crude oil (GCLF6 / QMF6) continued to drift lower overnight as oversupply continues to be the driving theme of the market. Market data suggests oil traders are preparing for another downturn in prices by March 2016, as forecasts for an unusually warm winter dent demand and Iran prepares for post-sanctions crude oil exports.

 

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

November 19, 2015 | Grain Hedge Insights | Kevin McNew | Views: 509
November 19, 2015 | Grain Hedge Insights | Cody Bills | Views: 311

Grains Were Mixed in the Overnight

In wheat, prices have been battered down in the past 4 trade sessions on improved weather in key wheat growing regions around the globe.

Grains were mixed overnight with soybeans drifting lower while wheat and corn tried to hold on to modest gains. In outside markets, S&P futures were trying to take another run at the 2,100 mark while crude oil was trading lower.

 

In wheat, prices have been battered down in the past 4 trade sessions on improved weather in key wheat growing regions around the globe. Overnight, the Ukrainian agriculture ministry and traders' unions have agreed to limit wheat exports from Ukraine to 16.6 MMT in the 2015/16 season. The figure could be reviewed depending on the outlook for next year's winter wheat harvest, which may fall sharply due to unfavorable weather this fall. The 16.6 MMT figure is still above USDA’s export projection for Ukraine of 15 MMT.  Farmers in the European Union have sown 23.9 million hectares with soft wheat ahead of the 2016 harvest, an estimate reduced by 100,000 hectares from last month, and now down 1 percent on 2015/16, consultancy Strategie Grains said on Thursday.

 

Japan's Ministry of Agriculture bought a total of 114,941 MT of food quality wheat from the United States and Canada in a regular tender that closed late on Thursday. Of the total, 80,000 MT was sold by the US.

 

In Brazil, expansive coverage in the next two weeks remains likely to further limit any near-term dryness concern and will recharge topsoil moisture, although rains may be very heavy (6 to 10” or more) in parts of Parana over the next ten days. This will threaten some pockets of excess moisture for corn/soy and will slow port loading, but the pattern otherwise aids corn and soybean development elsewhere. The Center-West soy will see showers peak Friday/Saturday, with additional chances at the middle of next week and in the 11 to 15 day.

 

S&P futures (ESZ5) were higher on Thursday, a day after minutes from the Federal Reserve's October meeting flagged a December interest rate hike and pointed to a cautious approach after that. The minutes showed that central bankers are grappling with longer-term issues that may be relevant to the pace of subsequent rate hikes. U.S. interest rates futures implied a 72 percent chance of a liftoff next month, up from 64 percent on Tuesday.

 

On Wednesday, crude oil (GCLZ5 / QMZ5) fell below $40 a barrel for the first time since August as an EIA report showed higher crude stocks. Crude inventories rose by 252,000 barrels to 487.3 million barrels in the last week, compared with analysts' expectations for an increase of 1.9 million barrels. Eight straight weekly increases have boosted stockpiles to close to their modern-day record 490.9 million barrels in April.

 

WEEKLY EXPORT INSPECTIONS

                                                    Actual            Expected

Corn                                               779.8             500-700

Soybeans                                     1,797.6          700-1,100

Wheat                                            721.9             200-400

 

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

November 18, 2015 | Kevin McNew | Views: 501
November 18, 2015 | Grain Hedge Insights | Cody Bills | Views: 295

Ample Supplies Continue to Weigh Down Grains

Grains were modestly higher overnight with soybeans trying to lead a feeble recovery on a 2 cent advance.

Grains were modestly higher overnight with soybeans trying to lead a feeble recovery on a 2 cent advance. In outside markets, S&P futures and crude oil put up slight advances in the night session.

 

In grain markets, there was little fresh news on Tuesday to change the course of trading. Grain prices continued to be weighed down by ample supplies not only in the US, but in global warehouses as well. Also, the US dollar continues to show signs of moving higher after a month of nearly vertical increases. The US dollar index is up 6% in the past month, which weighs heavily on US grain prices which depend on export business to foreign countries.

 

In weather, areas of the world where weather was of concern have since given way to an improved growing condition. The Former Soviet Union is expected to see warm and wet weather in the next week should aid the winter wheat crop there, while precipitation expected across the US Plains this week should also be beneficial for US wheat development.  Likewise, in Brazil an increasingly wet pattern should continue to bolster the summer crop prospects of our biggest competitor in the global soybean market.

 

S&P futures (ESZ5) were little changed on Wednesday as investors remained cautious after a shootout between French police and militants in Paris and a bomb scare at a German soccer match. Investors are also awaiting the minutes of the Federal Reserve's policy meeting last month. The minutes will be analyzed for clues on the central bank's reading of the economy. The Fed is widely expected to raise interest rates at its December meeting. U.S. stocks forfeited gains on Tuesday after a soccer match between Germany and the Netherlands, which German Chancellor Angela Merkel was due to attend, was called off over fears of a bombing.

 

Crude oil futures (GCLZ5 / QMZ5) rose on Wednesday on reports of falling stockpiles and rising refinery activity in the United States. The American Petroleum Institute (API), an industry group, said on Tuesday that U.S. crude stockpiles fell last week by 482,000 barrels due partly to higher refinery runs. Official inventory data is due from the U.S. government's Energy Information Administration (EIA) today, with a poll of eight analysts predicting a crude stock build of 1.9 million barrels on average in the week ended Nov. 13.

 

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

November 17, 2015 | Grain Hedge Insights | Cody Bills | Views: 264

Wheat Drops for Third Straight Day

Corn and Soybeans posted small gains in the overnight.

Corn and soybeans posted small gains in the overnight session while wheat continued to dip for a third consecutive day. In outside markets, S&P futures extended Monday’s gains while crude oil was lower.

 

Corn found some support on Monday as a large export deal was announced by USDA that saw Mexico buying over 900,000 MT of US corn for 2015/16 and 487,000 MT of corn for 2016/17 delivery.  This helped offset the poor export inspections data also released on Monday that showed only 373,000 MT of corn for the week, versus trade expectations of 650- to 850,000.

 

Soybeans also were helped by another deal by China which saw the number one soybean buyer purchasing 180,000 MT of US soybeans. The deal was announced on Monday from the USDA’s export sales program. Weekly export inspections for soybeans of 2,169,000 MT also topped analyst expectations which ranged from 1,900,000 to 2,100,000 MT. Also on Monday, NOPA’s October crush estimate was released showing 158.9 MB of soybeans crushed for October. This compared to a 161 MB expectation by the trade, with the range of analyst estimates varying from 58.5 to 164.8 MB.

 

In wheat, USDA reported a slight bump in the condition of the US winter wheat crop as it went from 51% good-to-excellent last week to 52% this week. This still remains off from last year’s reading of 60%. Export inspections for the week were also disappointing coming in at 279,000 MT versus a trade expectation ranging from 300- to 450,000 MT.

 

S&P futures (ESZ5) were higher Tuesday as investors anticipated data on consumer inflation, earnings from retailers, and a number of speeches from Federal Reserve officials. The Consumer Price Index, after declining for two months because of lower energy and import costs, is forecast to increase by 0.2% in October. CPI will be released at 8:30 a.m. EST. Industrial production for October will be released at 9:15 a.m. and is expected to show a slight gain of 0.1% after two months of declines.

 

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

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