April 17, 2017 | Kevin McNew | Views: 340
April 12, 2017 | Grain Hedge Insights | Kevin McNew | Views: 296

Soybeans Hold on to Strong Gains

Yesterday's Crop Report confirmed the big crops in South America

Soybeans held strong gains, countering yesterday’s bearish crop report while corn and wheat were holding steady in limited trade. In outside markets, crude oil continued to add to its gains over the last two weeks pushing into the mid-$53 area while equities and the US dollar were weaker to start the day.

 

Yesterday’s crop report confirmed the big crops in South America. Brazil’s soy crop was pegged at 111 MMT, up from USDA’s March forecast of 108 and above industry acreage expectations of 109.9. Likewise, Brazil’s corn crop came in at 93.5, above expectations of 92.4 and 91.5, previously. In Argentina, USDA also was slightly above expectations with corn at 38.5 vs a trade estimate of 37.8 and soybeans at 56 vs expectations of 55.9.

 

Soybeans sold off initially after the report but spiked on it’s low of $9.41 basis for July. This should act as support in the near-term. Indicators are turning more positive after being oversold for some time, giving the market a short-covering temperament.  To the upside, it will take a move into the $9.70 to $9.80 to likely push more shorts out. A resumption of the downtrend will take breaking through the $9.40 mark and eventually making a slide to $9. The fundamentals no-doubt support it.

In Europe, France and Germany are seeing above normal temps to help early season wheat development but conditions have turned dry of late which could spell problems if rain does not return. Weather patterns are expected to bring some light rains to Germany over the next two weeks, but hardly any precip is expected in France.

 

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

April 11, 2017 | Grain Hedge Insights | Kevin McNew | Views: 346

Grains Mixed Heading into the USDA Report

US Dollar and Equities in Negative Territory

Grains Mixed Heading into the USDA Report

Grains were mixed heading into the USDA report with soybeans holding on to a modest gain while corn and wheat sunk lower. In outside markets, crude oil dipped lower after hitting the $53 a barrel mark for the first time in a month. The US Dollar and equities were also in negative territory to start the main session.

 

This morning Brazil’s govt agency, CONAB, released their crop projections giving us a sneak-peek of what may lay ahead from USDA. They projected Brazil’s soy crop at 110.2 MMT, up from their previous forecast of 107.6 MMT in March. Analysts expect a USDA soy crop estimate of 109.9 MMT for Brazil, up from USDA’s March forecast of 108. For corn, CONAB came in at 91.5 MMT vs their 88.9 MMT forecast in March. Meanwhile the USDA report is expected by analysts to show a 92.4 MMT up from the March forecast of 91.5 MMT by USDA.

 

On Monday after the close USDA’s crop progress report showed the winter wheat crop improved to 53% good-to-excellent, up from 51% the previous week.  Last year’s reading at this time was 56%. For corn, only 3% of the US crop had been planted versus 4% this time last year.

In overnight deals, a South Korea feed group purchased 60,000 MT of soymeal from South America and another feed group in South Korea purchased 63,000 MT of feed wheat of optional origin.

 

USDA’s monthly supply and demand report is expected to show modest gains in all three crop carry-outs not only at the US level but at the world level as well. The report will be released at 11 am CDT.

 

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

April 10, 2017 | Grain Hedge Insights | Kevin McNew | Views: 302

USDA Crop Report to be Released Tomorrow

Grains in Positive Territory to Start the Week

Grains were in positive territory to start the week led by soybeans. In outside markets, crude oil was also showing impressive gains, hitting its highest mark in a month.

 

Rains over the weekend in Argentina came in heavier than expected with widespread coverage of 1 to 2 inches on waterlogged soils. Some areas saw as high as 7 inches in Buenos Aires. This will continue to hamper the soy harvest there as well as lead to quality concerns.

 

In the US, weather continues to lean to the wet side. Rain is expected regularly this week over the Midwest with totals of 0.5-1.5 inches expected in the ECB and 0.75-2.5 in the WCB. The frequency of the rains will be more of a problem than the amounts as rain is expected every 2 to 3 days. Heading into the 2nd week of the forecast; rains are expected to intensify in the Upper Midwest with totals of 1-3 inches which could stall in planting progress by April 23.  

 

In international news, Malaysian palm oil hit a 6-month low. Data from the Malaysian Palm Oil Board showed ending stocks for March rose 6.5% on the month to 1.55 MMT, outpacing market expectations.

Tomorrow, the USDA will release their monthly crop report. Modest gains in US carry-outs are expected after higher than expected quarterly stocks figures released March 31. Traders will eagerly watch South America production with expectations for a big bump in Brazil corn/soy estimates and only a modest uptick expected in the Argentine production numbers.

 

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

April 07, 2017 | Grain Hedge Insights | Kevin McNew | Views: 268

Weekly Cash Comments

Weekly Cash Commentary for week ending 04/07/2017

Grain basis moved higher this week with soybeans advancing 1.5 cents a bushel on average across the US while corn basis was up a modest 0.8 cents a bushel.

 

The steep slide in soybean prices at the end of last week helped fuel some minor basis improvements with soy crush facilities seeing gains of 2.8 cents a bushel on average.  River terminals, however, saw some minor weakness on the week as average soy basis dipped 0.5 cents a bushel. Of note this past week there was a fairly noticeable response to USDA’s big soy acreage jump as 20% of the grain buyers in GeoGrain’s system of over 4,300 buyers lowered their new-crop soybean bids over the past week.

 

For corn, spot basis did improve on average by 1.3 cents at ethanol plants but continues to run well below average for this time of year. Like soybeans, river terminals were mostly flat over the last week.

 

With First Notice Day on May futures 3 weeks away, it seems that soybean basis along key delivery points has a long way to go to push convergence to futures. Average basis along delivery points is about -25K suggesting quite a move will be needed to get the spot basis to par in the next few weeks. For corn, the delivery locations are running at about -8K with upside to par expected in the next 3 weeks.

 

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

April 07, 2017 | Grain Hedge Insights | Kevin McNew | Views: 335

Grains Were Mixed and Range Bound in Overnight Trading

Crude Oil inching higher

Grains were mixed and range bound in overnight trade action. In outside markets, equity markets were fractionally lower while the US Dollar index tried to eclipse the 101 mark for the first time in two weeks. Crude oil was also inching higher.

 

Overnight, Algeria was said to have bought 570,000 MT of wheat, likely to be sourced from the EU. Russia and Turkey plan to hold talks on import restrictions imposed by Ankara on Russian wheat in two weeks time, deputy prime minister Arkady Dvorkovich told reporters on Friday. The restrictions were not logical, he said. Turkey has put on hold purchases of wheat, maize (corn) and sunflower from Russia by imposing high import tariffs from mid-March.

 

In China, soy crush margins continue to be pressured hitting their lowest mark in 9 months. This could hamper their import appetite for soybeans just as South America ramps up exportable supplies.

 

The Midwest and Delta is expected to see limited rains between Monday and Thursday but rains are expected to intensify by next weekend. Overall, weather should be good for corn seeding pace given warmth & limited showers through mid-month. In the Plains, rains return to winter wheat in the 6-10 & mid/late 11-15 day to support crop growth with no seeming threats of cold.

The US jobs report this morning was below expectations with only 98,000 new jobs added as compared to 180,000 expected. The unemployment rate did dip to 4.5% from 4.7% previously, the lowest in a decade.

 

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

April 06, 2017 | Grain Hedge Insights | Kevin McNew | Views: 278

Grains Stagnated in the Overnight Session

Outside Markets Saw Crude Oil trying to Recover

Grains stagnated overnight following yesterday’s soybean advance, which was sadly the biggest daily gain in 25 trade sessions on a 6-cent gain. Outside markets saw crude oil try to recover from steep losses yesterday.

 

Weather in the US for early planting and winter wheat development is near ideal. Heavy rains in the Delta should ease as showers over the next 10 days are expected to be light with heavier rains not slated to return until the 11-15 day ahead period. The Plains also are seeing better moisture with the 6-10 day forecast leaning towards rains in Texas/Oklahoma, with fairly extensive 11-15 day rains providing follow-up moisture for most Plains wheat.

Weekly export sales were reasonably strong this week with all three commodities mostly at the high end of combined OC-NC expectations.

 

Export Sales-

 

Actual

   Estimated

Wheat - OC

568

   250-450

Wheat - NC

87

   50-250

Corn - OC

1,138

   700-1,000

Corn - NC

34

   100-300

Soybeans-OC

482

   350-550

Soybeans-NC

395

   150-350

 

 

 

 

In crude oil, the U.S. Energy Information Administration (EIA) reported an increase of 1.57 million barrels in crude inventories late on Wednesday, bringing total U.S. stocks to a record high of 535.5 million barrels.

 

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

April 05, 2017 | Grain Hedge Insights | Kevin McNew | Views: 250

Soybeans Find Strength in the Overnight

In Corn, Trade Moved Lower Yesterday

Soybeans found strength overnight as flooding concerns mount in Argentina. Corn and wheat were along for the ride but gains were more tempered in outside markets, crude oil had strong gains, as it tries to get back to the $52 mark for the first time in nearly a month.

 

Rains over the last week have raised concerns about the Argentine soybean crop as harvest gets underway. Last week, rain totals reached as much as 6 inches in some areas with a bit more hitting over the weekend. Moderate to heavy rain is expected for a majority of Argentina’s production region Friday into Sunday, with some flooding possible. However, Apr 11 is expected to bring a dry down period allowing time for harvest and flood waters to recede.

 

Ukraine is expected to harvest 24.2 MMT of wheat in 2017, analyst UkrAgroConsult said on Wednesday, raising its forecast from 23.5 MMT. The wheat crop could reach 25-26 million tonnes if there are favourable weather conditions.  However, that would still be below last year’s output of 26.8.

 

In corn, the trade moved lower yesterday with heavy farmer sales and a drop in export values. The first line of resistance on front-month May should be 371 ¾, the high from Monday’s trade; down support is from last week’s crop report in the 358-360 area.

In oil, API stocks data yesterday showed a drawdown of 1.83 million barrels on the week, versus a trade estimate of only a 0.3 million barrel drop (expected). Official government EIA data today with a modest 0.2 million barrel drop expected by the trade.

 

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

April 04, 2017 | Kevin McNew | Views: 433
April 04, 2017 | Grain Hedge Insights | Kevin McNew | Views: 221

Soybeans Trying to Recover in the Overnight Session

US Dollar and Crude Oil had Modest Gains

Grains posted modest gains overnight with soybeans trying to recover from a 10-week slide during which it has lost $1.40 a bushel. In outside markets, equity futures were sliding into the open while the US dollar and crude oil had modest gains.

 

Winter wheat crop conditions generally improved over the last week thanks to showers passing through the Plains. On Monday, USDA reported the Kansas wheat crop at 43% good-to-excellent vs 38% last week, Oklahoma at 41% vs 37% and TX improved from 34% last week to 39% this week. On average across all states, crop conditions are running off of last year’s reading with 51% of the winter wheat crop rated good-to-excellent vs 59% last year.

 

USDA’s census soy crush estimate released after the close yesterday showed February’s monthly total of 150.98 MB, slightly below analyst estimates which had pegged the figure at 151.9 MB. Brazil soy exports in March were a record high of 9.7 MMT.

In overnight news, South Korea feed group NOFI bought 65,000 MT of feed wheat, thought to be sourced from the Black Sea region. Japan is tendering for 120,000 MT of food wheat in their normal 3-times a month deal between the US, Canada and Australia. Algeria also was tendering for 50,000 MT of wheat, but often buys considerably more in its tenders than the nominal volume sought.

 

Argentina continues to be wet which is hampering soy harvest. A Big system is expected to bring widespread rains this weekend. Area of heavy rain will lead to some flooding potential.

 

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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Weekly Cash Comments

September 15, 2017 | Grain Hedge Insights | Kevin McNew

Grain basis was mixed throughout the country as the convergence of old-crop/new-crop marketing seasons begins to cause some shifting patterns in basis. On the week, US average corn basis was fractionally higher while soybeans lost 3 cents a bushel.

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