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February 06, 2017 | Grain Hedge Insights | Kevin McNew | Views: 250

Grains Start the Week Higher

Soybeans Shot Higher by a Dime

Grains Start the Week Higher

Grains were higher to start the week as soybeans shot higher by a dime in overnight trade while wheat and corn posted modest gains.


China will promote high-quality, branded farm products as it reforms its agricultural sector to meet demand from a growing middle class and boost rural incomes, the government's first policy statement of the year shows.
Beijing is trying to modernize its sprawling farm sector, the world's largest, and re-balance output away from basic grains towards foods such as meat, dairy and other value-added products increasingly in demand from its urbanizing population.

Russia’s wheat prices were stable last week as weather was not damaging to the winter wheat crop. Prices there were unchanged for the week at $186 fob.

In Brazil, Mato Grasso sees harvest progress quickly as the crop is 34 percent harvested, up from 14 percent last week.


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

February 03, 2017 | Kevin McNew | Views: 153
February 03, 2017 | Grain Hedge Insights | Kevin McNew | Views: 154

Weekly Cash Comments

Weekly Cash Commentary for week ending 02/03/2017

Grain basis levels continue to be steady as ample farmer supplies and large commercial stockpiles are keeping basis levels in check. This week, no major movement in either corn or soybean basis as recent strength in futures prices since the first of the year have kept pipeline supplies well fed.


In the Western Cornbelt, corn basis continues to trade much weaker than normal for this time of year as reports of ground piles by commercials from NE to MN continue to suggest no near term end in sight of basis doldrums. In Iowa, corn plants saw losses of 3 to 5 cents for the past week. The only bright spot continues to be export business which has been picking up of late and keeping basis levels at river terminals more resilient.


For soybeans, the slide in futures prices this week helped stabilize the rout in basis that has happened in recent weeks. Basis levels in soybeans are also running 30 cents a bushel less than the same time last year. This week did see some improvement in river terminal basis especially along the OH & IL rivers. Soy crushing plants continue to struggle with weak meal demand and have limited enthusiasm for pushing spot soy basis higher.  


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


February 03, 2017 | Grain Hedge Insights | Kevin McNew | Views: 138

Grain Markets Mostly Weaker

US Dollar Index Pushed above 100

Grain markets were mostly weaker as corn and wheat were in negative territory while beans was making a late session move back into positive ground. In outside markets the US Dollar index pushed above 100 while crude oil and equities were posting modest gains.


Yesterday saw corn trade in a narrow range following Wednesday’s sharp move higher. The $3.70 area has proven to be a formidable match for any rallies over the past 4 months and we need a close above this to see some potential to reverse the choppy two-sided pattern.


Weather for the Southern Hemisphere continues to be good for crops as rains return to Argentina bring relief to the dry areas that need it although the previously flooded areas that have just dried down are hoping the totals are not excessive. Rains will push into the NE area of Brazil which is needed and otherwise conditions are favorable with bean harvest proceeding around regular rain events which have slowed the pace of both bean harvest and second crop corn planting. However, on the plus side Brazil farmers have been slow to sell as the Brazilian Real has rallied helping erode domestic prices.

Statscan, using a farmer survey, pegged canola stocks in commercial and on-farm storage as of Dec. 31, 2016 at 12.2 million tonnes, matching trade expectations and declining 10 percent year-over-year.


This morning’s jobs report came in better than expected as US Labor Dept pegged 227,000 new jobs in January but the unemployment rate edged higher to 4.8%.  


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

February 02, 2017 | Kevin McNew | Views: 128
February 02, 2017 | Grain Hedge Insights | Kevin McNew | Views: 237

Grains Drifted Lower for Most of Night Session

Weekly Export Sales Numbers In

Grains Drifted Lower for Most of Night Session

Grains drifted lower for most of the night session but got a bump at the end thanks to decent export sales. In outside markets, crude oil poked its head above $54 but continues to be mostly range bound while the US dollar drifted lower to start the day.


USDA announced a 110,00 MT sale of corn to Japan and a 140,000 MT sale of corn to unknown destinations.


Yesterday after the close USDA reported its Dec crush results finding only 169.2 MB was crushed versus expectations that ranged from 170.0 to 172.5 MB going into the report. Also Yesterday, FC Stone pegged Brazil’s corn crop at 91.5, up from their previous forecast of 91.1 and soybeans at 104.1 vs 102.8 previously.


Overnight Algeria bought 585,000 MT of optional origin wheat. The wheat is likely to originate from the EU and US HRW. Also, Iraq is tendering for wheat but changed the provisions of the tender. Originally it was to be sourced only from the US, Canada or Australia but now all origins are allowed.

The dollar fell to its lowest since mid-November on Thursday after the Federal Reserve disappointed investors hoping for a clear sign of a March interest rate rise, while the Australian dollar rallied after data showing a record trade surplus.


Weekly Export Sales

                                          Actual            Expected

Wheat - Old Crop                   451              250-450

Wheat - New Crop                     0                50-150

Corn - Old Crop                   1,143           800-1,100

Corn - New Crop                        0                 0-100

Soybeans - Old Crop               624              500-800

Soybeans - New Crop                 0                50-150


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

February 01, 2017 | Kevin McNew | Views: 180
February 01, 2017 | Grain Hedge Insights | Kevin McNew | Views: 314

Soybeans Continue to Trade Down

Grain Markets in Negative Territory

Grain markets were in negative territory to start the day as soybeans continue to trade down to its recent low in the $10.20 area, off 60 cents from its high 2 weeks ago. In outside markets, the US dollar was trying to recover some of yesterday’s sharp losses while crude oil was higher.


USDA reported a 236,700 MT sale of soybeans to unknown destinations, of which 170,700 is old-crop.


Rains overnight in Argentina came in better than expected with some areas of the South and West getting 2 inches of precipitation. Other areas of Argentina are expected to see rains starting Thursday and heading into the weekend. In Brazil, rains are expected to bring widespread coverage over the next few weeks including to the dry sections of the NE.


In soybeans, managed money is still thought to be heavily long with an  expected 156K contracts to the buy side, down only 20K from the CFTC report on Friday.


The EU lowered their carry-out estimates for corn thanks to a surge in corn use for ethanol. The Commission found more corn going into ethanol production as opposed to wheat.

The line-up of vessels expected to load soybeans at Brazilian ports over the next month shows a spike in shipments to around twice the level of a year ago due to a speedy harvest and strong global demand. Port schedules suggest around 4.39 million tonnes of soybean exports in February and early March, 97 percent more than a year ago.


Crude oil will look for direction from EIA inventory data which is expected to show a 3.3 million barrel build on the week versus last week’s 2.84 million barrel build. The last 3 weeks have seen stocks come in higher than expected.


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

January 31, 2017 | Kevin McNew | Views: 224
January 31, 2017 | Kevin McNew | Views: 279

US Export Competitiveness Sinking

US Export Competitiveness Sinking

Grains consolidated overnight following yesterday’s sharp losses in soybeans. In outside markets, the US Dollar was weaker and equity futures continued their slump.


Soybeans got hit hard on Monday giving up 25 cents as traders bank on good crops in South America. Argentina will see showers in the south late today and Wednesday, with the north part of the country seeing rains Friday and Saturday. Rain totals of 1 to 3” are expected to benefit yield potential. In Brazil, yesterday saw scattered showers in Center-West/Center-South Brazil but over the next 2 weeks there should be wider coverage to benefit the crops. The dry areas of NE Brazil see brief showers by 11-15 day to ease dryness temporarily.

Japan's Ministry of Agriculture is seeking to buy a total of 108,442 tonnes of food quality wheat from the United States, Canada and Australia in a regular tender that will close late on Thursday.


The euro jumped against the dollar on Tuesday after U.S. President Donald Trump's trade advisor told the Financial Times that Germany was benefiting from a "grossly undervalued" euro. The euro climbed after the comments, reaching a five-day high and knocking the .DXY dollar index down 0.4 percent to below 100 for the first time in five days.


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