January 22, 2018 | Grain Hedge Insights | Kevin McNew | Views: 561

US Government Shutdown will Impact Timing of Reports this week

Grains Trade Higher in the Overnight

In the overnight session the grains traded higher. Concerns about dryness in central and southern Argentina, a weaker U.S. Dollar and strong weekly export sales are all helping to support grain prices at the start of the week. The U.S. government is still shutdown which will impact the timing of reports this week starting with the export inspections on Monday.

 

Heavy rains fell over the weekend in the northern crop growing regions of Argentina including Chaco, North West Corrientes, eastern Santiago Del Estero and Northern Santa Fe. As much as 12.44 inches of rain fell in parts of Chaco with 5-8 inches falling in other parts of the region. Despite the heavy rains in the northern part of the growing region the forecast looks to bring more dry weather in the central and southern parts. The next two weeks look to bring more hot dry weather to areas that already has marginal subsoil moisture.

 

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Brazil harvest is off to a slow start this year due to delayed planting at the beginning of the season. Analysts estimate Mato Grasso’s soybean harvest is  between 2.8 and 3.29 percent complete compared to 11.49 percent last year during the same period. Mato Grosso is usually the first state to begin harvesting in Brazil. This slight harvest delay may be helpful for U.S exports in the short run, but reports of strong yields may have a more negative effect on U.S. soybean prices once harvest is fully ramped up.

 

     

 

Basis for both corn and soybeans increased last week across the U.S. The national average soybeans basis advanced .7 cents and corn basis increased 1.5 cents. Soybean crush plants increased basis by an average of 2 cents, while river terminals lowered soybean basis by 2 cents. Ethanol plants were steady this week with river terminals corn basis edging up a penny.  

 

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January 19, 2018 | Grain Hedge Insights | Kevin McNew | Views: 625

Chicago Soybean Futures Rise for a Fifth Straight Session on Friday

Grains Trade Higher in the Overnight Session

In the overnight session the grains traded higher with corn up 1 ½ cents, soybeans up 3 ¾ cents, Chicago wheat up ¾ cent and Kansas City wheat up 1 ¾ cents.

 

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Ethanol production rebounded sharply this week with production increasing to 1.061 million bushels per day, up from 996 bpd recorded last week. The warmer temperatures across the US helped lower the stress on the supply and distribution logistics. The rebound brought production back above last years pace during the same week. Ethanol stocks were mostly steady at 955 million gallons compared to 954 million gallons last week. Ethanol stocks are still seasonally very strong at about 7.7 percent above last years levels.

 

Yesterday it was announced by the Buenos Aires Grain Exchange that 2017-18 soybean plantings estimates may be revised lower again due to the dryness in the northwestern parts of Argentina. This region represents roughly 30 percent of soybean plantings and they are behind schedule getting the crop into the ground.

 

Export sales were strong this morning for corn and soybeans but wheat missed analyst expectations. Corn sales booked 1.888 million metric tons this week which was up significantly from the previous week and well over analyst expectations. Soybean export sales increased by 31 percent over last week, beating expectations and booking 1.240 million metric tons. Wheat sales were disappointing compared to expectations but was higher than last weeks totals.


 

Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

153

200-500

Corn - OC

1,888

500-800

Soybeans - OC

1,240

600-1,000

 


 

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January 18, 2018 | Grain Hedge Insights | Kevin McNew | Views: 491

Snow in Central Plains/NW Midwest early next Week will Provide Beneficial Moisture

Grains Traded Lower in the Overnight

In the overnight session the grains traded lower with corn down ½ a cent, soybeans down 1 ½ a cent, Chicago wheat up 2 cents and Kansas City wheat up 1 ¼ cents. Corn rallied 4 cents higher yesterday after it was unable to push to new lows after the relatively bearish WASDE report last Friday. With sentiment being relatively bearish the fact that corn was unable to push to new lows triggered short covering in yesterday's session. March corn prices are now firmly up against the 50 day moving average which has acted as resistance in October, November, December and most recently January 3rd.   

 

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Strategie grains lowered their forecast for European Union soft wheat exports to 21.6 million metric tons, down 750,000 metric tons from last months forecast. This revision primarily affects France and Romania exports which were each revised about 300,000 metric tons lower. The revision comes after the massive Russian wheat harvest continues to dominate the global export trade.

The International Grains Council raised its 2017/18 global corn forecast by 14 million metric tons to 1.054 billion metric tons. The revision was a result of increased European Union, China and Nigeria production estimates. The organization also revised its 2017/18 wheat production higher by 8 million metric tons to 757 MMT.   

 

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January 17, 2018 | Grain Hedge Insights | Kevin McNew | Views: 441

Minimal Winterkill Overnight, As Snow Protected Coldest Areas of E Kansas and W Missouri

Grains Mostly Unchanged in the Overnight Session

In the overnight session the grains were mostly unchanged with corn up ½  of a cent, soybeans unchanged, Chicago wheat unchanged and KCBT wheat up ½ of a cent.

 

Exporters sell 130,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year. -USDA

 

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Yesterday the National Oilseed Processors Association reported the amount of soybeans crushed by its members in December. The organization is made up of 13 members which account for roughly 95% of the soybean crushed in the US. This months report showed a record high 166.382 million bushels which was a record high and well above analyst expectations of 165.385 million bushels. Soybean oil stocks were reported at 1.538 billion pounds at the end of December which was well above analyst estimates of 1.381 billion pounds.

 

On Wednesday Brazilian Agriculture Minister Blairo Maggi said that his country is looking into removing a 20 percent tariff on ethanol imports from the United States. The decision could hinge on the US lifting the ban on fresh beef exports from Brazil.

 

Export inspections were reported at 1.231 million metric tons of soybeans, 368,651 metric tons of wheat and 584,389 metric tons of corn. Export inspections missed expectations for corn but was within analyst estimates for wheat and soybeans.

 

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January 16, 2018 | Grain Hedge Insights | Kevin McNew | Views: 613

Wheat Prices Drop to One Month Low on Large US Plantings

Corn and Soybeans Trade Higher in the Overnight Session

In the overnight session corn and soybeans are trading higher as wheat stumbles. March corn is up 2 cents, March soybeans are up 5 ¾ cents, March Chicago wheat is down 3 ¼ cents and Kansas City wheat is down 4 ¾ cents this morning.

 

Kansas City wheat broke through the 50 and 20 day moving average with strong volume on Friday after the Seedings report showed larger than expected wheat acres planted throughout the U.S. The USDA announced that 32.608 million acres were planted to wheat which was above the analyst expectations which ranged from 31.1 to 32 million acres.  

 

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Weekend precipitation in Argentina was good, but coverage and amounts were variable across the major crop growing regions. Between 1 to 2 inches of precipitation was observed over the weekend throughout Cordoba and Santiago del Estero, but other areas in Western and central Buenos Aires, La Pampa and southern Cordoba saw less than .6 inches. Net drying occured in the areas that received less moisture as temperatures soared in the 90’s and 100’s on Friday. By the weekend, temperatures moderated with highs in the 70’s and 80’s. Although rains were received throughout Argentina there are still signs of crop stress and a reduction in yield potential. More widespread precipitation is needed to improve the yield outlook.

 

Last week’s commitment of traders report showed that managed money increased their net short position in corn futures and options by 23,940 contracts to 222,516. Money managers also increased their net short soybean position by 7,329 in futures and options to 92,835 contracts. Managed money also increased their CBOT wheat short position in futures and options by 813 contracts to 128,990. KCBT wheat net short position declined by 11,360 contracts to 17,600.


 

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January 12, 2018 | Grain Hedge Insights | Kevin McNew | Views: 592

Snow in the Midwest will help most of the Wheat from Cold Push

Grains Trade Slightly Higher in the Overnight

In the overnight session the grains traded slightly higher with March corn up 1 cent, March soybeans up ½ of a cent and March wheat unchanged. Argentina is still expected to receive rain today and tomorrow which is expected to start in the south and move northward. Follow-up precipitation is in the forecast between January 20-25th.

 

Exporters sell 320,000 metric tons of corn for delivery to unknown destinations during the 2017/2018 marketing year. -USDA

 

Today is a very important day for price direction with the USDA releasing the January WASDE report, the Quarterly Grain Stocks and the Winter Wheat Seedings report. Below are the analyst expectations.


 

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Winter wheat seedings is expected to show that farmers only planted 31.307 million acres, down from 32.696 million acres in 2017. The range of analyst estimates goes from 30.100 million acres to 32.0 million acres. The smallest ever winter wheat planted area was in 1909 when only 29.196 million acres was seeded.

 

Expectations are for ending stocks to be revised higher for soybeans and lower for corn and wheat. The average analyst guess for soybean ending stocks 472 million bushels which is an increase from 445 million bushels in the December report. The revision higher is anticipated due to the slower than needed pace of soybean exports this year. Corn ending stocks are expected to decline slightly to 2.431 billion bushels compared to 2.437 billion bushels in the December report. Wheat ending stocks are expected to decline slightly to 959 million bushels from 960 million in December.

 

Analysts are expecting that the USDA will increase the 2017-2018 soybean production estimates in Brazil to 110.27 million metric tons from December's estimate of 108 million metric tons. Argentina production will most likely be revised smaller due to the dry conditions which have delayed planting. Analyst expect Argentina corn production to slip to 39.9 million metric tons from 41.5 million in December and soybean production to slip to 52 million metric tons compared to 54.5 million metric tons in Dec. If realized that would be the smallest soybean crop out of Argentina in five years.        


 

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January 11, 2018 | Grain Hedge Insights | Kevin McNew | Views: 647

Analysts Feel US Farmers Have Planted the Fewest Winter Wheat Acres Since 1909

Grains Mixed in the Overnight Session

In the overnight session the grains were mixed with March corn unchanged, March soybeans up 1 ½ cents, March wheat down 2 ¼ cents and March Kansas City wheat down 1 ¾ cents.

 

Exporters sell 132,000 metric tons of soybeans for delivery to unknown destinations during the 2017/2018 marketing year. -USDA

 

Weekly ethanol production declined sharply for the second week in a row to 996 thousand barrels per day from 1.032 million barrels per day the week before. In the last two weeks we have seen total weekly production pull back 9 percent. Despite the sharp pullback in ethanol production, ethanol stocks continue to climb. Ethanol stocks increased this week to 954 million gallons and are now 13.5 percent over last years stocks during the same week.   

 

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A report released late yesterday by the Rosario grains exchange estimated Argentina would produce 52 million metric tons of soybeans in the 17/18 marketing year, down from their previous forecast of 54.5 million metric tons. The revision was due to the delays in planting caused by dry weather throughout their country. The report also lowered their corn production forecast to 39.9 million metric tons from 41.5 million metric tons. Further revisions to their production forecast could occur if the rains in Buenos Aires do not materialize over the next week.

 

Export sales were disappointing for wheat and within expectations for both corn and soybeans. Wheat only saw 71,500 metric tons sold for the week ending January 4th which was the marketing year low. Corn booked 437,700 metric tons which was up from the previous week, but was still down 54 percent from the four week moving average. Soybeans booked 607,400 metric tons which was also a week over week improvement.   

 

Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

71

250-450

Corn - OC

437

350-650

Soybeans - OC

607

500-850

 

 

 

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January 10, 2018 | Grain Hedge Insights | Kevin McNew | Views: 585

Chicago soybean futures slid for a third consecutive session on Wednesday

Grains Trade Mixed in Overnight Session

In the overnight session the grains traded mixed with March corn up ¾ of a cent, march soybean down 2 ¼ cents, march Chicago wheat up ¾ cents and Kansas City wheat up ¾ of a cent. Yesterday, wheat was able to rebound and hold onto gains by the end of the day.

 

Exporters sell 260,000 metric tons of soybeans for delivery to unknown destinations, of which 65,000 MT is for 2017/2018 delivery and 195,000 MT for 2018/2019 delivery. -USDA


 

Kansas city wheat found support at the 50 day moving average and was able to close above the previous days high which is a positive sign for prices. The harsh cold temperatures throughout Kansas in the last week of December and first week of January have traders concerned about damage, which can only really be confirmed in the spring. HRW growing regions have also been very dry with the majority of Kansas classified as abnormally dry and some parts in the southwestern part of the state considered moderate or severe drought. Traders are also expecting the Winter Wheat seedings to be reported at 22.327 million acres on January 12th compared to 23.436 million acres planted last year.

 

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The USDA will release its latest supply and demand report on Friday. Analysts are expecting ending stocks for soybeans to be revised higher to .472 billion bushels from .445 billion bushels in December’s report after exports have fallen behind pace this fall. The average trade expectation for corn ending stocks is 2.431 billion bushels which would be down from 2.437 billion bushels in the December report. Analysts are expecting a very slight revision in wheat ending stocks to .959 billion bushels down from .960 billion bushels in December.   

 

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January 09, 2018 | Grain Hedge Insights | Kevin McNew | Views: 545

Wheat Drops for Fourth Session while Corn Bounces from Lows

Grains Mixed in the Overnight Session

In the overnight session the grains were mixed with March corn up 1 cent, March soybeans down 3 ½ cents, March Chicago wheat down 1 ½ cents and March Hard Red Winter wheat down ¼ cent. HRW wheat has pulled back three days in a row and is trading at the 50 day moving average, an area that should provide some support during today’s trade session. The corn market bounced in the overnight after touching previous lows around $3.55 on the March contract.  

 

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Egypt announced on Tuesday that they will be revising and amending the legislation that allowed the agricultural quarantine authority to reject wheat shipments with even trace amounts of a common grain fungus called ergot. After a year of strict policies which disrupted normal wheat trade the ministry said it will accept wheat which contains .05 percent ergot or lower.

The latest weather models show the Argentina will be mostly hot and dry into the Friday causing stress on the crops. Precipitation is expected over the weekend with showers moving from the southern production areas to the north. The showers are greatly needed and should also be accompanied by cooler temperatures which will provide some relief to the crops. Additional rains in the coming weeks will be necessary to improve the crops conditions.  
 

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January 08, 2018 | Grain Hedge Insights | Kevin McNew | Views: 509

E. Midwest Wheat Likely to See Substantial Snow this Weekend to Middle of Next Week

Grains Unchanged to Lower in the Overnight

In the overnight session the grains were unchanged to lower. March corn was unchanged, March soybeans were down 1 ¾ cents, March Chicago wheat is down 3 ¾ cents and Hard Red Winter wheat is down 4 ½ cents. Temperatures this week should be turning warmer across the majority of the U.S giving the winter wheat area a break from potentially damaging conditions.

 

Exporters sell 120,000 metric tons of soybeans for delivery to Egypt 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 102,100 metric tons of corn for delivery to Mexico during the 2017/2018 marketing years. -USDA


 

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Argentina is still in need of more consistent and soaking rains. As of the latest report, 87.5 percent of soybeans have been planted and 77.9 percent of corn has been planted. Rainfall on last Thursday helped bring some moisture into Buenos Aires, but not all of the region benefited. The rain event also seemed to do little for the subsoil moisture which remains mostly marginal throughout Buenos Aires, Northern Cordoba and Santa Fe. More moisture will be needed to finish up with planting.    

 

On average across the nation corn basis increased 2 cents for corn and 5 cents for soybeans last week. Severe cold conditions combined with the holiday left some end users looking for more grain on a short term basis. Basis along the Ohio and Mississippi River was strong last week as well with nearly double digit gains for both corn and soybeans. Soybean crushing facilities saw strong gains of 10-15 cents in the eastern corn belt and into the southeast.     

  

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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