February 10, 2017 | Grain Hedge Insights | Kevin McNew | Views: 229

USDA Supply and Demand Report Showed Bullish News for Wheat

US Dollar and Crude Oil Extending Their Gains

USDA Supply and Demand Report Showed Bullish News for Wheat

Soybeans posted modest gains overnight trying to recover some of yesterday’s losses while wheat and corn were mostly stable. In outside markets the US dollar and crude oil were extending their gains from yesterday.

 

USDA’s supply and demand report showed the most bullish news for wheat where USDA trimmed global and US carry-out more than had been expected by the trade. India's production was slashed by 3 MMT and a few minor adjustments in other countries resulted in a 5 MMT drop in wheat carry to 248.6 MMT.

 

In soybeans, USDA held firm on their projections to South America crop production and China’s soy imports. USDA at 104 MMT for Brazil seems to be below recent estimates from private consultants and SA gov agencies at 105 to 106. USDA also kept US exports of soy unchanged and left China’s soy imports the same although both are running better than pace at the mid-mark of the marketing year.

USDA lowered US corn carry-out by 35 MB thanks to better ethanol and industrial use of corn but they kept corn exports unchanged. YTD corn sales are up about 12% over the 10-year pace of sales needed to reach USDA’s annual forecast of 2,225 MB. If the current pace of exports were to persist it would imply an annual export number of around 2,500 MB. In overnight news, South Korea's largest feed-maker, Nonghyup Feed Inc. (NOFI), purchased 210,000 tonnes of corn and 67,000 tonnes of feed wheat in an international tender which closed on Friday. The grains can be sourced from optional origins for May/June arrival in South Korea, they said.

 

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February 09, 2017 | | Views: 137
February 09, 2017 | Grain Hedge Insights | Kevin McNew | Views: 132

Grains Slipped Overnight Ahead of USDA Report

Crude Oil was Pushing Higher

Grains Slipped Overnight Ahead of USDA Report

Grains slipped overnight ahead of USDA’s crop report at 11 am CDT today. In outside markets, crude oil was pushing higher back into the mid $52 range while the US dollar was mostly steady.

 

USDA reports the sale of 107,000 MT of soybeans to unknown destinations.

 

Traders expect only minor changes to USDA’s supply and demand data, with the biggest consensus for a modest drop in US corn carry-out and potentially a cut in US soy carry-out. International factors like SA production and China soy imports will likely play a bigger role. USDA could bump China soy imports from current estimates of 86 MMT as the country has been aggressively buying. Supply estimates are expected to show Brazil beans at 104 and Argentina at 54. But, many analysts continue to peg a higher Brazil number in the 105-106 range; forecaster Conab this morning pegged it at 105.6 MMT.

 

China curbed its corn surplus for 2016/17 due to better-than-expected domestic demand and lower imports, as it embarks on a strategy to erode its vast stockpile, curb acreage and boost consumption. In its monthly crop report, the Ministry of Agriculture said it expected surplus supply for the 2016/17 season that ends in September to total 4.41 million tonnes, down from last month's prediction of 5.11 million tonnes. That would be way below 33.73 million tonnes in 2015/16. The data does not include state reserves, which are estimated to be around 200 million tonnes, equivalent to one year's worth of demand.
 

 

Weekly Export Sales-

                                     Actual           Expected

Wheat - OC                      527              300-500

Wheat - NC                       16                25-100

Corn - OC                        971           800-1,100

Corn - NC                         34                  0-150

Soybeans - OC                 536              500-800

Soybeans - NC                 129              100-250

 

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February 08, 2017 | Kevin McNew | Views: 103
February 08, 2017 | Grain Hedge Insights | Kevin McNew | Views: 159

Soybeans Continue to Strengthen

Crude Oil Continues to Slip Lower

Soybeans continued to strengthen overnight while corn and wheat slipped lower following yesterday’s positive gains. In outside markets crude oil continued to slip lower hitting its lowest mark since December.

 

China will consume more corn in 2016/17 than previously forecast as demand for the grain in livestock feed will rise after China slapped anti-dumping duties on U.S. distiller's dried grains, an influential report said on Wednesday, pushing up prices.  In a daily report, the China's National Grain and Oils Information Center (CNGOIC), an official think-tank, raised its estimate for corn consumption for the 2016/17 season to end-September to 197.6 million tonnes, up 21 million tonnes from the 2015/16 year. The forecast is up by 500,000 tonnes from a previous estimate made in January.

Brazil has begun its 2016/17 soybean exports as it looks to start off-loading what should be a record-large harvest. The shipping schedule on the docket for February is rather aggressive, but there is good reason to believe that soybean exports will push to new highs for the month. Brazil, the leading exporter of soybeans, is expected to ship roughly 60 million tonnes of the oilseed over the next year – some 17 percent greater than the country’s 2015/16 effort.

India has bought more than five million tonnes of wheat since mid-2016, already its biggest annual purchase in a decade, after it began an import campaign to meet a supply shortfall left by two years of lower production. The country is slowing down imports ahead of the harvest in April and purchases in the months ahead will depend on production this year, two traders told Reuters on Wednesday.

 

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February 07, 2017 | Kevin McNew | Views: 105
February 07, 2017 | Grain Hedge Insights | Kevin McNew | Views: 101

Monday Saw Good Export Inspections

Grains Were Mildly Weaker in Overnight Trade

Monday Saw Good Export Inspections

Grains were mildly weaker in overnight trade, while the US dollar surged to a one-week high.

 

USDA reports a 128,000 MT sale of corn to Japan.

 

Monday saw good export inspections but did little to lift corn and wheat prices. Wheat exports were 618,235 vs trade expectations ranging from 200-400,000 MT while corn had an impressive week of 1,113,212 as compared to 700-1,000,000 MT expected by the trade. Soybean exports also posted a solid week with 1,635,714 exported as compared to 900-1,200,000 MT expected.

In overnight news, South Korea's Major Feedmill Group (MFG) purchased about 55,000 tonnes of soymeal to be sourced from South America in a deal on Friday. An Ethiopian government tender to buy 400,000 tonnes of wheat which closed on Tuesday received a lowest offer of $219.68 per tonne c&f for the May shipment consignment, with the lowest offer from the Black Sea region. Japan's Ministry of Agriculture is seeking to buy a total of 111,522 tonnes of food quality wheat from the United States, Canada and Australia in a regular tender that will close late on Thursday.

The Euro had its biggest decline of 2017 sending the US dollar higher. The single currency shed 0.8 percent EUR=EBS against the dollar, with investors fearing far-right, eurosceptic candidate Marine Le Pen was gaining momentum before France's presidential election on May 7.
 


 

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

February 06, 2017 | Grain Hedge Insights | Kevin McNew | Views: 167

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: 93
February 03, 2017 | Grain Hedge Insights | Kevin McNew | Views: 76

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)

 

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