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April 04, 2016 | Grain Hedge Insights | Kevin McNew | Views: 393

Soybean Prices Continue to Move Higher

Crude was in Positive Territory after being off as much as 50 cents a barrel

Grains started the Sunday night session in positive territory with soybeans leading the complex higher, but by morning the market began to fade. Wheat and corn were in negative territory while soybeans held on to slim gains. In outside markets, crude was in positive territory after being off as much as $0.50 a barrel while the US dollar and stock futures had small gains.

 

In soybeans, prices continued to move higher hitting their highest mark since August. But, weakness in palm oil overnight kept soybean prices in check. Malaysian palm oil futures slid in early trade on Monday as a stronger ringgit and expectations for a drop in exports as an export tax restarts this month weighed on the market. The palm oil contract fell 0.7%.

 

In export news, three South Korean groups purchased a total 192,000 MT of corn set to be sourced from the United States or South America in private deals on Friday, European traders said on Monday. The deals followed a purchase of some 272,000 MT of corn also likely to be sourced optionally from the United States or South America by South Korea's largest feedmaker Nonghyup Feed Inc. (NOFI) in a tender which closed on Friday, traders said.

 

For wheat, rains looked more likely in key US HRW areas in the coming week with the best chance for rain in the window Apr 10-15. On Friday, Western KS had only about a 20% chance of rain during this time period but by Monday that probability had grown to about 60%.

 

In crude oil, Friday swathe latest US rig counts fall to 362 from 372 in the previous week marking the lowest weekly total since November 2009. However, Iran’s oil minister on Sunday said the country’s oil exports jumped again in March, potentially undermining a global deal to limit crude output and raise prices.

 

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

April 01, 2016 | Grain Hedge Insights | Kevin McNew | Views: 260

Weekly Cash Comments

Weekly Cash Commentary for week ending 04/01/2016

Soybean basis was on the defensive this week as higher futures and a sharp sell-off in corn pushed farmer sales towards cash beans. For the week, US average soybean basis was off 2.3 cents while corn basis was flat.

 

In soybeans, the biggest losses occurred at river terminals with the average decline at 5 cents on the week. Part of the weakness was tied to a 4-cent loss at the Gulf, but higher barge rates and active farmer selling put some losses as much as 8 to 12 cents a bushel on the week for key river terminals. At soy plants, basis was also weaker by 1.9 cents on the week, but the weakness at soy facilities has been muted as crush margins re higher as of late.

 

For corn, basis levels were mostly flat this week although river terminal strengthened slightly on a 1-cent gain out of the Gulf. Ethanol plants were unchanged as a group although there was some noted bidding up by 2 to 4 cents in the Western Cornbelt.

 

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

April 01, 2016 | Grain Hedge Insights | Kevin McNew | Views: 319

Grains Mostly Weaker in the Overnight

In outside markets, stocks were lower on unemployment ticking up

Grains were mostly weaker overnight with corn still feeling the sting from yesterday’s shockingly high corn acre number. In outside markets, stocks were lower on unemployment ticking up slightly to 5% from 4.9%.

 

Yesterday brought news that US farmers intend to plant 93.6 million acres of corn, 5.6 million more acres than in 2015. This was well above average estimates of 90 million acres and above the high end of analyst estimates at 91. The increase was most prominent in the Plains and Delta region which combined added 3.4 million acres, and the states of AR, LA & MS where flooding is a major issue were pegged to increase by 1 million acres combined.

 

Wheat was definitely the benefactor of higher corn acres seeing a 5 million acre drop to 49.6 million. This would be the lowest wheat acres in 45 years if realized.  This has the potential to draw down carryout in 2016 especially if exports recover from their big slump in 2015. With a weakening US dollar it seems likely wheat exports will come back in 2016.

 

For soybeans, acreage estimates of 82.2 million were just below the average estimate of 83.1 and below last year’s plantings of 82.7. However, even with normal yields and usage numbers on par with this year it would still lead to a jump in carryout from 460 MB to over 600 MB. Also, many analysts expect farmers to be more likely to switch out of corn into soybeans as prices have rallied since the March 1 survey of farmer planting intentions.

 

Overall this report was not favorable for the long-term outlook on grains. Even wheat which saw the biggest bullish input faces a big uphill climb to gain more competitiveness in the world market as the global glut keeps prices on the defensive.

 

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

March 31, 2016 | Grain Hedge Insights | Kevin McNew | Views: 285
March 31, 2016 | Grain Hedge Insights | Kevin McNew | Views: 344

Traders Await Results of USDA Report Today

In outside markets, stock futures and crude oil were mildly higher while the US dollar made fresh lows.

Grains were mixed overnight as traders await the results of USDA’s planting and stocks reports at 11 am CDT today. In outside markets, stock futures and crude oil were mildly higher while the US dollar made fresh lows.

 

Join us at 10:30 am CDT in our live trading room to hear Kevin McNew and discuss the reports and trade action. Goto http://grainhedge.com/live.aspx

 

Wheat fell hard on Friday thanks to an outlook for rains in the US Plains. The best chance for rain remains in the 11 to 15 day, and some GFS guidance remains more generous in the southwest Plains than some private weather analyst models. However, the precip still misses the southwest 1/3, although rain chances do still improve in late April for the region.

 

Traders look for USDA’s planting reports to show 90 million acres of corn versus a range of estimates from 89 to 91, while soybean acres are pegged at 83.1 million versus estimates ranging from 81.6-84.2. Wheat is expected to see a 3 million acre drop in plantings and to come in at 51.7 with estimates from 50.7-54.8.

 

WEEKLY EXPORT SALES

 

                         Actual OC            Actual NC          Expected OC        Expected NC

Corn                       790                      70                   800-1,000              0-100

Soybeans                271                      90                      300-600             75-300

Wheat                    317                      86                      150-350             75-200

 

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

March 30, 2016 | Grain Hedge Insights | Kevin McNew | Views: 344
March 30, 2016 | Grain Hedge Insights | Kevin McNew | Views: 300

USDA Crop Intentions Report Due Out Tomorrow

Crude oil reversed course posting a nearly $1 a barrel gain and stock futures are higher.

Grains were lower overnight leading up to tomorrow’s USDA report as gains over the past two trade sessions were met with some selling pressure. In outside markets, crude oil reversed course posting a nearly $1 a barrel gain and stock futures are higher.

 

Grain traders worried on Tuesday about the risk for reduced demand from China after the government said it would scrap its corn stockpiling program at a time when global markets are awash with excess supplies. Traders said importers in China would likely reduce purchases of farm products used to feed livestock, including sorghum and the ethanol byproduct distiller’s dried grains (DDGs). They said the policy shift is expected to bring domestic corn prices in line with cheaper foreign supplies. Last year, China imported about 40 million tonnes of substitutes for corn, including sorghum, DDGs and barley, from the United States and other countries, said Fred Gale, a senior economist for the U.S. Department of Agriculture. At times, corn prices in China were double those of the import.

 

Thursday, USDA is expected to report higher corn acres for 2016 with expectations running at 90 million acres planted versus 88 million in 2015. For soybeans average estimates look for a 83.1 million acre planting, which is a modest 400,000 acre increase over last year. However, the variance in the estimates is quite large, ranging from 81.6 to 84.2. USDA will also release their quarterly stocks report next week.

 

In crude oil, prices found support late yesterday as API crude stocks estimates were only modestly higher than expected at 2.6 million barrels higher versus an expectation of a 2.0 million barrel build on the week. This was off sharply from last week’s build of 8.8 million barrels.  IA will release official government data later this morning at 9:30 CDT and traders look for a 3.3 million barrel increase in stocks compared to last week’s 9.3 million barrel increase.

 

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

March 29, 2016 | Grain Hedge Insights | Kevin McNew | Views: 268
March 29, 2016 | Grain Hedge Insights | Kevin McNew | Views: 225

Corn Slightly Weaker in the Overnight

Crude sinks nearly $1 a barrel

Grains were mixed in the overnight trade with corn slightly weaker and soybeans posting modest gains. Wheat managed to add to yesterday’s rally in the overnight session. In outside markets, crude oil sunk nearly $1 a barrel and stock futures were lower as well.

 

Crop condition reports released on Monday from key winter wheat states showed little change in the crop’s quality. Number 1 producing state Kansas slipped from 57% to 56% good-to-excellent while Oklahoma was unchanged on the week at 63%. Texas inched higher to 48% versus 47% last week. Colorado showed a bigger bump going from 43% last week to 51% this week.

In corn, prices are getting closer to short term highs of $3.73 ½ against May futures set back on Feb 22. Yesterday, Mexico hedge accounts were noted as active buyers of corn calls for July, suggesting there are looking to shore up price protection on purchases.

 

Crude oil came under sharp selling pressure as the two-month rally has left traders wondering if it is overdone. Crude stock numbers from API will be released at 3:35 PM CDT today. Last week’s estimate showed a huge weekly build of 8.8 million barrels with traders only expecting a 2.7 million barrel build.

 

Fed chair Yellen is giving a speech today which will be monitored by investors. Most experts expect Yellen to re-emphasize on Tuesday her previous insistence that all meetings were “live”, meaning that rate decisions could happen at any point in time, though markets place low odds on any action happening in April.

 

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

March 28, 2016 | Grain Hedge Insights | Kevin McNew | Views: 238

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