December 04, 2017 | Grain Hedge Insights | Kevin McNew | Views: 563

Grains Higher in the Overnight Session

Cash Markets Moved Higher Last Week

In the overnight session the grains were higher with March corn up ½ of a cent, January Soybeans up 10 cents and March Wheat up 2 ¼ cents. January soybeans is now trading above the $10.00 mark, an area of strong resistance all Fall. Soybeans is now back to price levels that we have traded at prior to the November WASDE report with a resistance level at $10.08 ¼.  

 

Argentina precipitation over the last seven days has been strongest in the western part of the growing regions and relatively dry to the east. The soil moisture shows short to very short topsoil moisture in northern Argentina and marginally adequate to short moisture the other growing regions throughout the nation. The forecasts expects a ridge of high pressure to develop over Argentina next week which is expected to produce a number of high temperature days with little precipitation. There is concern that a net evaporation effect and deplete topsoil moisture which is critical for emergence of the newly planted crop.       

 

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The monthly Oilseed Crushings report released at 2 PM CST on Friday from the USDA estimated that 175.9 million bushels of soybeans were crushed in the month of October, this was a strong increase from September of 145 million bushels.  The estimates were above analyst expectations which averaged at 174.7 million bushels and ranged from 171 to 175.8 million bushels. The report also showed that 2.22 billion pounds of soybean oil was produced which was a 19 percent jump from September.  

 

 

The cash markets moved higher last week with corn basis up 3 cents and soybeans up 2 on average across the U.S. With harvest almost completely wrapped up, basis will have an opportunity to gain some ground going into the new year as farmers have filled and locked the bins and marketing stored grain is not necessarily high on their priority list.   


 

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

December 01, 2017 | Grain Hedge Insights | Kevin McNew | Views: 712

US Wheat Prices Edge Higher Today Supported Partly by Potential Demand from Saudi Arabia

Overnight Session Has Grains Trading Higher

In the overnight session the grains are trading higher with March corn up ¾ of a cent, January soybeans up 2 cents and March wheat up 1 ¼ cents. March wheat prices tested resistance yesterday which held. The contract notched an intraday high of $4.39 and finished the day near the lows at $4.33 confirming selling pressure around the lows in late October. Corn prices are also near a resistance level that held on November 22nd near the $3.58 price level.

 

EXPORTERS SELL 130,000 METRIC TONS OF CORN FOR DELIVERY TO UNKNOWN DESTINATIONS DURING THE 2017/2018 MARKETING YEAR- USDA

 

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Argentina is expected to receive precipitation starting today and continuing throughout the weekend. On Friday, the rain is expected to cover southwestern Buenos Aires, northeastern La Pampa and San Luis with the weekend precipitation covering western Buenos Aires and parts of Cordoba and western Santa Fe. Brazil is also expected to receive favorable precipitation throughout the west central part of corn and soybean production regions, but the far south is expected to be dry through the remainder of the week.

Heavy rains are expected to intensify throughout Victoria and parts of South Australia threatening a standing wheat crop that is close to harvest. On Friday, Australia Bureau of Meteorology issued a “Severe weather warning for heavy rainfall.” These heavy rains and thunderstorms are expected to continue over the weekend and threaten to damage up to 4 million metric tons of wheat.

 

It was announced this morning that Taiwan Flour Millers Association purchased 81,780 metric tons of wheat to be sourced from the U.S in an international tender.   

  

 

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

November 30, 2017 | Grain Hedge Insights | Kevin McNew | Views: 654

Weekly Export Sales Disappointing for Corn and Wheat

Grains Trade Lower in the Overnight Session

In the overnight session the grains traded lower with March corn down 1 ¼ cents, January Soybeans down 4 ¾ cents and March wheat at 3 ¾ cents. Corn had nice bounce yesterday after prices approached previous lows set back in the middle of November. The Dec17-Mar18 corn spread widened out to -14 ½ cents, the most we have seen this year.

 

EXPORTERS SELL 525,000 METRIC TONS OF SOYBEANS FOR DELIVERY TO CHINA DURING THE 2017/2018 MARKETING YEAR. EXPORTERS SELL 132,000 METRIC TONS OF SOYBEANS FOR DELIVERY TO UNKNOWN DESTINATIONS DURING THE 2017/2018 MARKETING YEAR. EXPORTERS SELL 110,000 METRIC TONS OF GRAIN SORGHUM FOR DELIVERY TO CHINA DURING THE 2017/2018 MARKETING YEAR- USDA

 

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Ethanol production declined slightly over the last week to 1.066 million barrels per day. Despite the decline this week's production was 5.3 percent above last year and was the 2nd highest weekly production on record. Ethanol production is 3.7 percent ahead of last years pace in the first few months of the marketing year which is well above the pace needed to meet USDA demand estimates. Ethanol stocks increased sharply to 22.044 million barrels, up 147,000 barrels from the previous week. Stocks have been seasonally very strong as we head into a time of the year when stocks continue to get bigger. Ethanol stocks this week are now 20 percent over last year's levels.  

 

Export sales were disappointing for both corn and wheat this morning. Old crop corn only posted 599,200 metric tons of sales which was down 45 percent from the previous week. Wheat sales also disappointed, missing estimates by a substantial margin and declining 8 percent from the previous week. Soybean sales met expectations and increase 9 percent from last week.

 

Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

184

250-450

Corn - OC

599

700-1,100

Soybeans - OC

942

800-1,200

 

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

November 29, 2017 | Grain Hedge Insights | Kevin McNew | Views: 1153

USDA Releases Their Latest Estimates on Planting Acreage

Grains Were Mixed in the Overnight Session

In the overnight session the grains traded mixed with December corn down ¾ of a cents, January soybeans down 1 ¾ cents and December Chicago wheat up 2 ¾ cents. First notice day for December corn and wheat contracts is Thursday the 30th. Most basis contracts that you may have with a grain buyer will need to be priced by noon today and any long futures contracts will need to be rolled by the end of today’s trading session.  

 

Exporters sell 263,000 metric tons of soybeans for delivery to China during the 2017/2018 marketing year. Exporters sell 101,600 metric tons of corn for delivery to unknown destinations during the 2017/2018 marketing year. -USDA

 

March wheat traded at a low yesterday of $4.24 ¼ cents before turning around and closing near the high side of its trading range. The next overhead resistance appears to be around $4.33 ¾ which was supported in late October but was broken last Friday.   

 

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In the past month China has purchased 10 to 12 cargoes of corn. The corn was sourced primarily from the U.S and it would appear that more purchases may be yet to come. Corn prices in China have been relatively high recently after the government encouraged farmers to plant less of the crop this year to help deplete the country's sizeable reserves. In the latest report from the Agricultural Ministry, China is expected to produce 210.1 million metric tons of corn this year which was lower than previous forecasts. With the country's demand for corn revised higher to 215.62 million metric tons there is a need to import corn to meet demand. China corn demand was revised higher after the government announced plans to roll out ethanol blending into fuel across the country's gasoline supply.  

 

 

Yesterday, the USDA released their latest estimates on the planting acreage for the 2018/19 crop year. They pegged soybean acreage at 91 million acres, up from 90.2 in 2017. The USDA also estimated an increase in corn acreage by 600,000 acres to 91 million acres. These forecasts and are not survey based.     

 

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

November 28, 2017 | Grain Hedge Insights | Kevin McNew | Views: 886

US Wheat Export Inspections Down 5.9% for this Marketing Year

Grains Trade Mostly Lower in the Overnight Session

In the overnight session the grains traded mostly lower with December corn down 1 ¼ cents, January soybeans down 4 ¼ cents and December Chicago wheat down ¼ cent. The corn chart shows prices cupping back over toward the lows that were set in the middle of the month. January soybeans was able to trade at $10 briefly yesterday before selling pressure pushed it back under the strong psychological resistance level.

 

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In the latest Crop Progress report released out yesterday afternoon corn harvest progress has progressed to 95 percent complete from 90 percent last week. The states that still lag behind in harvest pace are Ohio at 87 percent complete, Wisconsin at 81 percent complete and Michigan at 84 percent complete. Soybean harvest pace was not reported on this week.

 

Winter Wheat conditions were downgraded this week to 50 percent of the crop rated good-to-excellent from 52 percent last week. Despite the slight decline in the winter wheat crop prices continue to be pressured lower by ample global stocks and strong export competition.

Argentina is expected to get some precipitation starting on Friday and continuing into Sunday, but below average rainfall in the first few weeks of December could cause trouble for late planted corn and soybeans.

 

The latest GASC tender on November 15th resulted in the purchase of 240,000 metric tons of Russian wheat.  


 

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

November 26, 2017 | Grain Hedge Insights | Kevin McNew | Views: 869

Wheat Trades at New Lows This Morning

Dec Corn, Jan Soybeans and Dec Wheat all down in Trading

In the overnight session December Corn is down ¾ of a cent, January Soybeans is down 1 cent and December wheat is down 3 cents this morning. Both December Wheat and December Corn contracts will go into first notice day on Thursday November 30th.

 

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Wheat trades at new lows this morning after Friday’s export sales disappointed traders. Russian wheat prices in the Black Sea also fell last week to $190.5 a metric ton as prices in the U.S and Europe become more competitive. Russian wheat sales will continue to weigh heavily on U.S. wheat prices. Russia has exported 20.2 million metric tons of grain this marketing year as of November 22nd which is up 27.6 percent from the previous year with wheat exports up 25.4 percent year over year.

Brazil soybean planting has increased to 84 percent complete this week, up 11 percent from last week. This is ahead of the five year average pace of 79 percent with the majority of the key growing regions now seeded. In Argentina planting made little progress last week. Soybean seeding now stands at 11.7 percent complete and corn planting is 34.5 percent complete up 5.9 percent from last year. Weather in Brazil continues to bring precipitation in the north but the far south is beginning to see dry areas. Argentina continues to see precipitation in the far North and east central parts of the growing region, but 1/3rd of the crop still needs precipitation. The regions 6-10 day outlook shows improved chances for moisture.

Saudi Arabia’s state grain buyer purchased 723,000 metric tons of feed barley sourced from Australia, North and South America, the EU and the Black Sea.

 

On Friday China announced that it will cut import taxes on 187 imported products including meats in an effort to stimulate consumer spending. The cuts will take place on December 1st and help U.S products become more competitive.

 

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

November 22, 2017 | Grain Hedge Insights | Kevin McNew | Views: 1010

Fall Weather Continues to be Challenging for Harvest

January Soybeans Up in the Overnight Session

In the overnight session the December corn is unchanged, January Soybeans up 5 ¼ cents and December wheat is down ¾ of a cent. December corn continues to trade around resistance at $3.44 ¾ per bushel after breaking below that support level last week. Weather in Brazil looks beneficial to the corn and soybean crop with an active rain pattern across most all of the grain growing regions. Argentina continues to have areas of dryness for their corn and soybean crop, but the 11-15 day weather outlook points to some precipitation.

 

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The grain markets will be closed for the Thanksgiving holiday, but will reopen Friday morning at 8:30 AM CST. Friday’s trade session will close early at 12:05 PM CST.  

 

Weather this fall has been challenging for harvest. The cooler weather and rain delays made it hard for later planted crops to dry down naturally in the field. Corn has been delivered wet from the field and has experienced moisture deductions and the size of the crop has put pressure on infrastructure.  Some elevators have shortened dump hours for high moisture grain as they try to work through their inventory. We have seen a 3 to 4 cent premium for 14.5 percent moisture corn at the Gulf.   


 

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

November 20, 2017 | Grain Hedge Insights | Kevin McNew | Views: 757

Jan Soybeans Lower This Morning after a Light Setback after Friday’s 1.9 percent Jump

Corn and Wheat Also Lower this Morning

In the Sunday night session the grains traded lower with December corn down ¼ cent, January soybeans down 2 ½ cents and Chicago Wheat down 4 cents. The sharp rally on Friday brought corn prices back from the lows of the week, but will likely lead to upward resistance around $3.42 ½ early in the trade this week. Resistance at this level is from a level of previous support which was broken, often causing a role reversal where previous support turns into price resistance.  

 

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Last week the cash market firmed as basis moves out of harvest lows. Corn improved 2 cents and soybeans rallied 4 cents on average across the country. Soybean basis was driven by a sharp rise in the export markets. The PNW increased their soybean basis by 22 cents and the Gulf lifted theirs by 14 cents on average this week. Basis along the river system reacted to the strength out of the Gulf by improving 8 cents on average this week. Soybean plants increased an average of 3 cents this week. Corn basis also improved this week, but only by an average of 4 cents along the river and 4 cents at Ethanol facilities.

The latest commitment of traders report showed that money managers extended their net short positions to 230,556 contracts from 205,625 short last week. This is a record net short position that surpases the previous record of 229,176 net short positions on March 8, 2016. The managed money net position in soybeans fell 24,187 contracts last week to a net positive 22,550 contracts.    

 

 

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

November 17, 2017 | Grain Hedge Insights | Kevin McNew | Views: 679

Weekly Cash Comments

Weekly Cash Commentary for week ending 11/17/2017

Basis levels were bolstered this week by improving export basis and a surge in end-user bidding out of harvest lows. On the week, corn was up 2 cents while soybeans climbed 4 cents.

 

Soybeans big lift came from a completing harvest and a sharp climb in export basis with the PNW up 22 and the Gulf basis up 14 on the week.  This helped push river terminals to an 8-cent advance on the week.  On the Upper Mississippi the shipping season winds down as winter freeze stops barge traffic and basis levels are starting to soften. For crush plants, they were up a solid 3-cent on the week but gains were not universal as some plants continue to hold steady.

 

 

For corn, export locations were more subdued but river terminals still managed to climb 4 cents on the week. Ethanol plants as a group were also up 4 on the week but gains were clearly less prominent in the Upper Midwest where fresh supplies continue to flow into the pipeline.

 

Carry in the futures market continues to widen on the market slump as ample supplies force wide spreads to encourage storage. For corn, the Dec-Jul spread stands at 29-cents, well above the 20-year average of 23 cents for this time of year. Meanwhile soybeans face an exceptionally large carry as Jan-Jul holds at 28-cents a 4x multiple of the 7-cent norm for this time of year.

 

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

November 17, 2017 | Grain Hedge Insights | Kevin McNew | Views: 1077

Grains Move Higher in the Overnight Session

Rains in the Midwest This Weekend Delay Corn and Soy Harvest

In the overnight session the grain moved higher with December corn up 1 ¼ cents, January Soybeans up 3 ¼ cents and December Chicago Wheat up 3 cents. Brazil rains will be scattered for the remainder of the week and provide widespread coverage for the rest of the month benefiting the corn and soybean crops. Argentina weather is more of a concern, with some isolated light showers expected today and Monday but the overall moisture profile declining over the rest of the month. Some crop stress may start to develop in North East Cordoba, Southern Santa Fe and Northern Buenos Aires.   

 

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Informa Economics announced their latest 2018 corn planting estimates at 91.415 million acres, revised higher compared to 90.460 million. They also estimated that soybean plantings in the same year at 89.627 million acres compared to 90.347 in their previous estimates. Informa also sees all wheat plantings at 45.625 million acres compared to 45.875 million acres.  In the latest WASDE report the USDA estimated that planted acres for the 17/18 crop was 90.4 million acres for corn, 90.2 million acres for soybeans and 46 million acres planted to wheat.

 

The latest harvest report from France showed that 99 percent of the corn harvest is complete for crops that were rated good-to-excellent. It also showed that SRW crop is 95 percent planted with 97 percent of the crops in good-to-excellent condition.    

 

It was announced that Iraq purchased direct from the U.S 90,000 metric tons of Rice outside of the tender process. Also in the news was Egypt’s GASC bought 240,000 metric tons of Russian wheat in a purchase tender.  

 

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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