June 02, 2016 | Grain Hedge Insights | Kevin McNew | Views: 205

Soybeans Reach New Heights

Crude oil was unchanged in the overnight

Soybeans reached new heights overnight with front month July briefly touching $11.10 a bushel. Corn and wheat were mostly unchanged in rather directionless trade. In outside markets, crude oil was unchanged while equity futures and the US dollar drifted lower.

 

On Wednesday, grains got a boost as problems with South America’s crops continue to mount. Yesterday, weather forecaster Lanworth pegged Brazil’s corn crop at 75 MMT, off 5% from their previous estimate citing issues associated with the second season corn crop.

 

Also, exporter association ANEC said Brazil’s soy exports would be 57 MMT this year vs USDA’s 59.5 MMT, while corn exports would be 23 vs 30 MMT as previously predicted. A drop in Brazil’s corn crop is stimulating demand for feed wheat from Asia. Indonesia has bought over 1 MMT of feed wheat this year, while Thailand has locked in close to 2 MMT. That compares to limited shipments a couple of years ago.

 

In crude oil., traders await guidance from today’s OPEC meeting in Vienna. Saudi Arabia promised on Thursday not to flood the oil market with extra barrels as OPEC entered a heated debate about production policy, with Iran insisting on the right to raise output steeply. Several OPEC sources said Saudi Arabia and its Gulf allies would propose to set a new collective ceiling in an attempt to repair OPEC's waning importance and end a market-share battle that has sapped prices and cut investment. Failure to reach any deal would revive market fears that OPEC's largest producer Saudi Arabia, already pumping near record highs, may raise production further to punish rivals and gain additional market share.


 

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

June 01, 2016 | Grain Hedge Insights | Kevin McNew | Views: 303
June 01, 2016 | Grain Hedge Insights | Kevin McNew | Views: 312

Grains Under Pressure

Corn and Soybeans Drift Lower

Grains were under pressure to start Wednesday with corn and soybeans drifting lower while wheat reversed some of Tuesday’s sharp losses.

 

On Tuesday after the close, USDA’s crop progress report showed corn plantings at 94% complete versus 86% last week. Also, the first crop condition rating of the season showed the crop at 72% good-to-excellent, which is slightly off the score of 74% last year. Winter wheat conditions inched higher to 63% as compared to 62% last week. Meanwhile, soybean plantings breezed along reaching 73% completed, up from 66% last week.


Overnight export deals were fairly limited. Egypt’s FIHC bought 30,000 MT of soybean oil from ADM while Jordan’s start grain buyer relaunched a failed wheat tender on 100,000 MT. Jordan has failed to make purchases in a series of tenders, with traders citing quality controls and payment terms that have reduced participation.

 

Monthly USDA soy crushings are expected at 2 PM CDT today. The report is expected to show April soybean crush at 156.8 MB, off from March’s monthly figure of 166.4 MB. The National Oilseed Processors Association, a trade group, estimated that its members crushed 147.6 MB of soybeans in April, down from 156.7 MB during March.

 

Oil declined for a fourth day on concern recent gains were unsustainable, while shuttered Canadian operations started to reopen.The OPEC meeting on Thursday in Vienna is expected to show a continued policy of squeezing out rivals by maintaining production as the price rally helps justify the group’s strategy. Saudi Arabia will use the meeting to repair relationships with fellow producers after the failure of an April accord to freeze crude output in Doha, according to people familiar the matter. The kingdom’s Minister of Energy Khalid Al-Falih will reassure other members his nation won’t flood the oil market and may be open to the reintroduction of a production target for the group, the people said.


 

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

May 31, 2016 | Grain Hedge Insights | Kevin McNew | Views: 291
May 31, 2016 | Grain Hedge Insights | Kevin McNew | Views: 291

Mixed Grain Prices to Start the Week

US Dollar fractionally higher

Grain prices were mixed to start the week with corn and wheat lower while soybeans were higher. In outside markets, the US dollar was fractionally higher while crude oil also moved up slightly.


Moscow consultant IKAR pegged the Russian wheat crop at 63.5 MMT, up 1 MMT than previous forecasts but only 0.5 MMT higher than the latest USDA forecasts. Wheat prices in Russia were firmer last as the rouble strengthened by 1% against the dollar and global price benchmarks rose.


China will postpone a state soybean reserves auction, the National Grain Trade Center said in an online statement on Tuesday. The statement didn't provide a new auction date. According to an earlier statement, China had planned to auction 300,400 MT of soybeans from state reserves on June 1.
 

Weekend rains over the Midwest were not as abundant as predicted Friday and some fieldwork may have advanced, but more importantly fieldwork will be quicker in resuming this week as soon as abundant sunshine returns. Rainfall reached 1.00 to 2.00 inches in eastern Nebraska, southeastern. Similar rainfall occurred in eastern Iowa and northeastern Missouri and in South Dakota and in random locations from northern Iowa and southern Minnesota to parts of Wisconsin random locations across central Ohio.


 

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

May 27, 2016 | Grain Hedge Insights | Kevin McNew | Views: 368
May 27, 2016 | Grain Hedge Insights | Kevin McNew | Views: 315

Weekly Cash Comments

Weekly Cash Commentary for week ending 5/27/2016

US soybean basis showed good strength this week. While corn lagged behind, mostly steady to weaker loosing half a cent on the week.

Corn basis levels at the Gulf were off sharp this week,  giving up  7 cents  a bushel.  River terminals managed to resist the drop in the Gulf at basis level were only off about one cent a bushel.  Recent export deals in corn should underpin river bids and probably keep them moving higher in the summer. Meanwhile, ethanol plants as a group were down this week by one cent suggesting that ethanol plants aren’t eager for corn. 

Overall, we saw a rise in soybean basis by two and half cents. River thermals were leading the rise higher with changes of nearly eight cents per bushel, moving in lockstep with the Gulf. Soy meal is on a sharp upward trajectory. We saw crush facilities increase basis by almost a nickel.  Strengthening soy crushing margins all the way out to January are encouraging some to increase new crop bean basis. 

 

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May 27, 2016 | Grain Hedge Insights | Kevin McNew | Views: 269

Grains were mixed and Crude Oil Gave Back on Recent Gains

USDA announced flash sales with China

Grains were mixed with little change from yesterday’s close while crude oil gave back some of its recent gains.

 

USDA announced three flash sales deals this morning with 130,000 MT of China for old crop delivery and 110,000 MT to China for new-crop delivery. A deal for 100,000 MT of soymeal for new crop was also sold to an unknown destination.

 

The Buenos Aires grains exchange said Argentina’s soy harvest was progressing smoothly after drier weather in recent weeks.  Storms that flooded half the agricultural region prompted the loss of 1.65 million hectares dedicated to soybeans. However, the group kept output forecasts for the bean on hold at 56 MMT this season following a recent cut, thanks in large part to record yields in provinces like Buenos Aires and La Pampa. That is only slightly lower than USDA’s estimate of 56.5 MMT.

China has begun to offer up corn reserves to their domestic market to try and eliminate massive stockpiles that have been accumulating over the past 15 years. This morning they announced they auctioned off 889,000 MT.

 

The Western Cornbelt will likely see active rain systems in the next 5 days before turning drier in the 6 to 10 day forecast. Showers will be intermittent and limited in the eastern Midwest and much of the Delta in the next two weeks to aid fieldwork, as the best rains focus west of the Mississippi River. A tropical disturbance will bring some wet weather to the Carolinas this weekend as well, but damage threats are low. Follow-up showers in the 6 to 15 day will keep late fieldwork sluggish in the region.




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

May 26, 2016 | Grain Hedge Insights | Kevin McNew | Views: 339
May 26, 2016 | Grain Hedge Insights | Kevin McNew | Views: 340

Grains were Higher than Soybeans and Weekly Export Inspections

Crude hit its highest mark since last October

Grains were Higher than Soybeans and Weekly Export Inspections

Grains were higher this morning with soybeans reaching new heights on the rally, briefly getting close to $11 a bushel on front-month July futures. In outside markets, crude oil was also chartering fresh ground eclipsing $50 a barrel, its highest mark since last October.

 

Soybeans continue to be fueled by a surge in soymeal prices tied to the crop shortfall in Argentina. Meal prices bested $400 a ton in the last session and continue to move higher overnight. With Argentina’s soy crop problem, traders are looking for much lower soymeal exports from the world’s #2 supplier.

 

Russia's Sovecon agriculture consultancy has raised its forecast for Russia's 2016 grain crop to 107 MMT from a previously expected level of 105.4 MMT, its presentation at a conference in Moscow showed on Thursday. Its forecast for the wheat crop was raised to 64 MMT from 61.1 MMT. USDA currently has the Russian wheat crop at 63 MMT.

 

Overnight export deals saw Jordan tendering for 100,000 MT of optional origin milling wheat. Meanwhile, South Korea’s MFG walked away from the tender to buy 70,000 MT of corn, citing prices that were too high.

 

Crude oil continues to climb thanks to EIA data on Wednesday showing a 4.1 million barrel drawdown in crude stocks. Expectations were for only a 2.4 million barrel drop in inventories.

 

WEEKLY EXPORT INSPECTIONS

 

                               OC-Act            OC-Exp        NC-Act      NC-Exp

Corn                          1,381       1,000-1,300         246        250-450

Soybeans                    456            300-500           150         300-500

Wheat                         -9               0-200             354         300-500


 

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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