March 10, 2017 | Kevin McNew | Views: 189
March 10, 2017 | Grain Hedge Insights | Kevin McNew | Views: 184

Weekly Cash Comments

Weekly Cash Commentary for Week Ending 03/10/2017

Weekly Cash Comments

Grain basis levels were mostly stagnant this week even with the sharp sell-off on the board. For the week, US average corn basis was mostly unchanged while the US average soybean basis inched up by 1 cent a bushel.

Processors continue to show very little interest in bidding up basis levels, although this week did bring some modest movement to bean basis at crush facilities as collectively they raised their bids by 1.4 cents. But, ethanol plants were less inclined to move it higher, showing only a modest 0.4 cent advance.

WEEKLY BASIS CHANGES

 

CORN

SOYBEANS

US AVG

-0.1 C

+1.2 C

PROCESSOR

+0.4 C

+1.4 C

RIVER TERMINALS

-2.8 C

-2.0 C

 

For river terminals, there was some noticeable weakness for both corn and soybeans. Corn basis at river terminals was off 2.8 cents on the week, while soybean basis was down 2 cents.

Seasonal patterns for corn basis continue to show processors running well below normal for this time of year. Current basis levels are about 20-cents a bushel below the 7-year average basis for ethanol plants. However, river terminals continue to be mostly on par with basis levels for this time of year.

 

For beans, crush facilities are running nearly 40-cents below their normal basis for this time of year while river terminals are about 20-cents below. Look for river basis to improve steadily heading into May 1. Also, slow farmer selling in April will likely be the norm which should give an added boost to basis levels helping to push them higher.

 

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

March 10, 2017 | Grain Hedge Insights | Kevin McNew | Views: 258

Grains Continue their Sell Off

US Jobs Report Out this AM

Grains continued to sell-off over night with soybeans again leading the complex down. In outside markets, a positive US jobs report this morning helped push equity futures higher higher.

 

After holding pat on Brazil’s production forecasts for the past several months, USDA finally bumped their production forecasts higher in yesterday’s report and in the case of corn, USDA came in well above expectations with a crop of 91.5 MMT vs 87.7 expected. For soybeans, they came in at 108.0 vs 105.9 expected.

 

The market seems to be reaching a critical mass as fundamentals are getting more bearish while the technical chart picture is turning decidedly negative. Dec Corn breaking below $3.90 gives a new target of $3.76 from the double-top formation on the charts established from the $4.04 highs. Likewise, Nov beans have a triple top of the $10.33 highs with a close below $10 signalling a move to the $9.70 area.

 

This morning’s US jobs report showed more bullish news for the economy as 227,000 jobs were added in February. That was well above expectations of 193,000 jobs.


 

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

March 09, 2017 | Kevin McNew | Views: 102
March 09, 2017 | Grain Hedge Insights | Kevin McNew | Views: 232

USDA Supply and Demand Report out Today at 11am CST

Grains Continue to sink lower

Ahead of USDA’s crop report, grains continued to sink lower with soybeans trading below $10.17 for the first time since Feb 27. In outside markets, crude oil was on a $5 downside beating in the last two days thanks to a huge build in crude stocks over the last week.

 

USDA reported a 120,000 MT of corn sales to Japan.

 

Brazil's agricultural statistics agency Conab on Thursday raised to 107.6 MMT its estimate for the country's 2016/17 soybean crop, up 2 MMT from its previous forecast. The agency said corn output in the season should reach 88.9 MMT, compared to 87.4 MMT estimated last month, as favorable weather for grains production continue to boost crop prospects.

 

In overnight news, a South Korea feed group was in the market for 66,000 MT which may come from optional origin sources. Saudi Arabia was looking to buy 720,000 MT of hard wheat. No origins were specified but it is thought EU origins might have an inside track to the business.

USDA’s supply and demand report will be out at 11 am CDT and is not expected to change the tone of traders attitudes. Attention will focus on SA crop projections with the trade looking for a bump higher in Brazil’s corn and bean estimates. This morning’s export sales report was mostly in line with expectations, which are nothing impressive on a seasonally-adjusted basis.

Fresh export business continues to be light. Meanwhile spot basis at river terminals took a fairly substantial hit yesterday. Corn basis at river terminals across 87 buyers tracked by Grain Hedge fall a collective 3 cents a bushel yesterday. Soybean basis was a bit weaker at IL river terminals. Corn plants were mixed  with 12 plants raising their basis yesterday, 9 dropping their basis and the remaining 121 plants holding steady. For soy crushing plants 4 out of 52 plants raised their basis yesterday.

 

Weekly Export Sales-

 

Actual

Expected

Wheat - OC

391

300-500

Wheat - NC

40

50-200

Corn - OC

741

700-1,000

Corn - NC

93

0-100

Soybeans-OC

485

350-550

Soybeans-NC

29

0-100


 

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

March 08, 2017 | Kevin McNew | Views: 481
March 08, 2017 | Editor's View | Elise Schafer | Views: 593

One Week Left to Add Your Facility to List of Exporters to China!

Let AFIA know by March 15 if your company exports or wishes to export to China

One Week Left to Add Your Facility to List of Exporters to China!

Attention all feed additives or feed premix exporters! If you are currently exporting or wish to export products to China within the next five years, you must fill out this form (one for each facility), and email it to the American Feed Industry Association (AFIA) by March 15.

In 2009, the Chinese government released Decree 118, requiring all feed facilities exporting non-medicated feeds to China to register with their Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).

According to Gina Tumbarello, AFIA’s director of international policy and trade, since there was no mechanism for facilities to register for export when the decree was announced, AQSIQ has been implementing protocols for facility registration by feed product groups since 2011. The Chinese agency is currently on the feed product group “feed additives and premixes.” As part of its process of establishing a protocol for feed facilities to become registered, China has requested from industry an all-inclusive list of U.S. facilities currently exporting and/or wishing to export feed additives and premixes to the country.

This facility list will be used to determine which facilities will participate in a visit by AQSIQ to a sampling of facilities, so they can determine a checklist of requirements for all U.S. facilities wishing to export feed additives or premixes to China.

Tumbarello said once the protocol is established for “feed additives” and “premixes,” from then on, all U.S. facilities wishing to export feed additives and/or premixes to China will have to follow this new protocol.

Once the protocol (checklist of requirements) is determined by AQSIQ, and is implemented, the facilities on the list originally provided to AQSIQ will be able to apply for facility registration for export of feed additives and premixes to China. If your facility is NOT included on AFIA’s initial facility list, the next opportunity to register your facility with AQSIQ may not be for several years. See AFIA's infographic below for a detailed explanation.

How can you ensure that your business with Chinese customers will not be interrupted? Simply follow these two steps:

  1. Complete the online form (one for each facility) and submit to Gina Tumbarello, gtumbarello@afia.org, and
  2. Pay administrative fee* online, per facility
  • AFIA Member: $250 per facility
  • Non-member: $500 per facility

*This administrative fee will help AFIA offset the administrative expenses associated with AQSIQ’s travel to the U.S. to conduct the systems audit required to establish the protocol for U.S. facilities to obtain the facility registration that will be needed export feed additives/premixes to China.

NOTE: By completing the form, your facility will be included on the facility list for consideration by AQSIQ to obtain the required facility registration needed for export of feed additives and/or premixes to China. This will NOT automatically approve you or register your facility with China AQSIQ. However, as part of this process for consideration, your facility may be audited by China AQSIQ.

March 08, 2017 | Grain Hedge Insights | Kevin McNew | Views: 240

US Southern Plains Continue to be Dry

Grains Continue to Bleed Lower Overnight

US Southern Plains Continue to be Dry

Grains continued to bleed lower overnight with front-month May beans trading to their lowest level in two weeks. In outside markets, crude oil gave up 50 cents a barrel while the US Dollar and equity futures trended higher.

 

Soybean imports for February were 5.5 MMT which is 23% below the January import total but still 28% above the same month last year. Both the hog margin in China and soybean crush margins have been moving lower over the past month.

 

The US Southern Plains continue to be dry with high wind conditions. The winter wheat crop is reportedly 3 weeks ahead of normal in terms of maturity with only modest chances of rain in the SE Plains over the next two weeks. However, ample global supplies should keep prices in check, while also giving the market a break was news that Japan would skip its regular weekly wheat tender.

 

Tomorrow’s USDA report is expected to show no major changes to US carryout figures. However, traders do expect USDA to ratchet up Brazil crop forecasts for soybeans to 105.9 (vs 104 in Feb) and corn to 87.8 (8.5 previously). Argentina crop estimates are expected to stay mostly the same from February.

 

U.S. private employers added 298,000 jobs in February, well above economists' expectations, a report by a payrolls processor showed on Wednesday. Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 190,000 jobs, with estimates ranging from 150,000 to 247,000. This pushed the dollar higher in early morning trade. Official government jobs data will come on Friday morning.

 

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

March 07, 2017 | Kevin McNew | Views: 193
March 07, 2017 | Grain Hedge Insights | Kevin McNew | Views: 227

US Export Prices Firmed Relative to Foreign Competitors Over Last Week

South Korea will ban imports of US Poultry

South America’s crop size continues to balloon as FC Stone released its projections on Brazil. They peg the soybean crop at 109.1 MMT vs 104.1 in February. While they see a small drop in the 2nd season crop at 61.3 MMT vs 61.6 previously, they boost the 1st season crop to 32.0 vs 29.9 previously.

 

South Korea, Japan, Taiwan and Hong Kong have limited imports of US poultry after the US detected its first case this year of avian flu on a commercial chicken farm. South Korea will ban imports of U.S. poultry and eggs after a strain of H7 bird flu virus was confirmed on Sunday at a chicken farm in Tennessee. So far this year South Korea has shipped in nearly 1,049 tonnes of U.S. eggs, according to ministry data, accounting for more than 98 percent of its total egg imports as of March 3.

 

Overnight a South Korea feed manufacturer bought 60,000 MT of US corn. Iraq is purportedly in the market for wheat and is seeking it from the United States, Canada or Australia.

 

US export prices firmed relative to foreign competitors over the last week. Brazilian soybean prices fell $ a Mt on the week relative to US prices.

 

 WORLD EXPORT PRICE SPREADS RELATIVE TO US

Crop

Country

Today

Last Week

Last Year

CRN

ARG

-$4.4

-$3.9

+$0.5

CRN

BRZ

-$22.6

-$20.4

-$21.5

CRN

EUR

+$0.0

+$1.7

-$19.7

SBN

ARG

-$7.9

-$4.0

-$13.5

SBN

BRZ

-$2.0

+$4.1

-$9.8

WHT

EUR

-$17.8

-$14.2

-$42.9

 

Export spreads represent a foreign country price minus US price

at export destinations, in USD per metric ton.  A higher spread indicates

the foreign price has risen relative to US prices, making the foreign country less

competitive and the US 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)

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