December 18, 2017 | Grain Hedge Insights | Kevin McNew | Views: 529

Grains Trade Higher in the Overnight Session

Colder Temperatures Expected Last Week of December for Southern Plains

In the overnight session the grains traded mostly higher with December corn up 1 cent, January soybeans up 2 ½ cents and March Chicago wheat up 4 ½ cents. Wheat is now on its 4th day rebounding from lows printed on December 12th. Overhead resistance is around $4.24 ¼ which was a previous low in the downtrend in wheat that resumed in September.  

 

Exporters sell 396,000 metric tons of soybeans for delivery to China during the 2017/2018 marketing year. Exporters sell 168,000 metric tons of grain sorghum for delivery to China during the 2017/2018 marketing year. - USDA

 

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Argentina received rain over the weekend with around 1-2.4 inches from central Santa Fe and Southwestern Entre Rios to eastern Buenos Aires and southeastern Uruguay. Temperatures are expected to be seasonable this week with next week temperatures warming slightly. Precipitation is expected again this week, primarily Friday and Saturday and should provide .75 to 2 inches in the central corn and soybean producing regions.

 

Meteorologists are calling for colder temperatures in the last week of December throughout the southern plains. Early models suggesting temperatures could fall below zero Fahrenheit. HRW wheat will be vulnerable to freeze damage after this years planting season was delayed by heavy rain in October followed by persistent dryness. According to the drought monitor, the entire state of Kansas is abundantly dry and 1/5th of the state is in Moderate drought.  

Last week the average corn basis in the US increased by two cents for corn and 1 cent for soybeans. Ethanol basis was mixed across the country with double digit gains in MN and SD while basis was weaker in IL and IN. Soybean plants were mostly steady throughout last week, but the Gulf did increase 5 cents which helped river basis for soybeans. Basis at the Gulf declined 5 cents for corn last week.    

 

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December 15, 2017 | Grain Hedge Insights | Kevin McNew | Views: 288

Grains Mostly Unchanged in the Overnight

NOPA Crush Numbers to be Released Today

In the overnight session the grains were mostly unchanged with corn up ½ a cent, soybeans up 3 ½ cents and wheat up ¾ of a cent. Soybeans traded sharply lower yesterday after recent weather models show improved precipitation in Argentina for the weekend. January soybeans are now trading near November 14th lows which may provide some support during the trading session in the short term.

 

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The NOPA crush numbers will be released today at 11 AM CST and are expected to show the strongest crushing rate on record for this month. Analysts are expecting to see 163.191 million bushels crushed in the month of November which would be a slight decrease from the 164.242 million bushels crushed in October. Analysts are expecting soy oil stocks to be reported at 1.269 billion pounds, up from 1.224 billion pounds at the end of October.

 

The US government announced that La Nina conditions forecast around an 80 percent chance of developing in the Northern Hemisphere throughout the winter of 2017-18. Expectations are for a transition to Enso Neutral by mid to late spring.


 

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December 14, 2017 | Grain Hedge Insights | Kevin McNew | Views: 512

Corn and Wheat Remain Mostly Unchanged in the Overnight

Ethanol Production Slipped this Week

In the overnight session corn and wheat remain mostly unchanged but January soybeans is trading 5 ¾ cents lower as Argentina forecasts expect precipitation over the weekend that is likely to provide relief to much of the drought stricken areas of the country.

 

The Argentina state weather service forecast indicates showers throughout Buenos Aires, Santa Fe, San Luis, Cordoba and Entre Rios. The widespread rain over Saturday and Sunday is expected to greatly benefit much of the dry regions and provide necessary moisture to continue the planting process. Last week Farmers in the Pamas region had planted about 40 percent of their soybean acres.

 

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Ethanol production slipped this week to 1.089 million barrels per day from 1.108 million barrels per day last week. Despite the slight decline it is the second highest production on record and is roughly 4.7 percent above last year’s production during the same time period. To date, ethanol production is running ahead of last years pace by 4.1 percent. Ethanol stocks also slid last week to 940 million gallons from 947 million gallons. Despite the slight week over week decline in ethanol stocks the current levels are still up 17 percent year over year.

 

The Federal Reserve increased interest rates by ¼ of a percentage point on Wednesday and kept the rate outlook unchanged.


 

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December 12, 2017 | Grain Hedge Insights | Kevin McNew | Views: 457

Grains Trade Mixed in the Overnight Session

Exporters Sell Corn to Mexico and Wheat to Algeria

In the overnight session the grains traded mixed with March corn up ½ of a cent, January soybeans down 1 ½ cents and Chicago March wheat up ¾ of a cent. The USDA report will be released today at 11 AM CST. March corn is currently trading near recent lows and any bearish surprise could be enough to break prices another leg lower.

 

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According the the Reuters poll of analyst estimates the average trade guess of 17-18 corn ending stocks 2.478 billion bushels which would be down from 2.487 estimated in November. Analysts are expecting 17-18 ending stocks for soybeans and wheat to be higher than the November forecast with wheat pegged at 938 million and soybeans at 438 million bushels, up from 425 million bushels in November.

 

Exporters sell 120,000 metric tons of Hard Red Winter Wheat for delivery to Algeria during the 2017/2018 marketing year. Exporters sell 152,000 metric tons of Corn for delivery to Mexico during the 2017/2018 marketing year. Exporters sell 168,300 metric tons of Soybeans for delivery to unknown destinations during the 2017/2018 marketing year. - USDA

 

The average trade guess for global ending stocks is to see a slight reduction in wheat, corn and soybeans from November forecast. Analysts are expecting to see wheat ending stocks at 267.07 million metric tons, corn ending stocks at 202.72 million metric tons and soybean ending stocks at 97.82 million metric tons.

 

Analysts are expecting to see revisions lower for corn and soybeans in both Brazil and Argentina. The average trade guess has Argentina corn production at 41.77 million metric tons and soybean production at 56.52 million metric tons. Brazil corn production is expected to be revised lower to 93.26 million metric tons while expectations are for a slight increase in soybean production 108.21 million metric tons.  


 

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December 07, 2017 | Grain Hedge Insights | Kevin McNew | Views: 611

Export Sales Up from Last Week Across the Board

Grains Trade Lower in the Overnight Session

In the overnight session the grains traded lower with March corn down ¾ of a cent, January Soybeans down 7 ½ cents and March wheat down 1 cent and pushing into contract lows. The USDA WASDE report will be released on Tuesday the 12th next week.  

 

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Ethanol production jumped to an all time high this week to 1.108 million barrels per day, up from 1.066 million barrels per day last week. This weeks production is  8.3 percent above last year during the same week and brings this year’s total ethanol production to 4.1% above 2016. Ethanol stocks also increased last week, moving to 947 million gallons from 926 million. The increase in ethanol stocks reflects a 21.7 percent increase from last year during the same period and we are entering a season when ethanol stocks typically grow.

 

Russia announced that it will spend roughly $34 million in transportation subsidies to help speed up the export of their record wheat crop. The Deputy Agriculture Minister said that “We are not subsidizing exporters, we are subsidizing producers” and that the measures to not violate their commitments to the World Trade Organization. The transportation subsidies will make it more appealing to move grain from Siberia, Volga and central regions of Russia to markets.


 

Export sales were up from last week across the board with soybeans posting the strongest sales. Soybeans sales broke the 2 million metric ton mark and doubled last week’s sales. The increase in purchases can be mostly attributed to China but Thailand, Indonesia and Germany also made notable contributions. Wheat sales were within market expectations this week and up 74 percent from last week.   

 

Weekly Export Sales-

 

Actual

Estimated

Wheat

321

250-450

Corn  

876

800-1,200

Soybeans

2,015

1,000-1,500

 

 

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December 06, 2017 | Grain Hedge Insights | Kevin McNew | Views: 438

Informa Reduces Corn and Soybean Production Estimates

Grains Traded Higher in the Overnight Session

In the overnight session the grains are trading higher with March corn up 1 ½ cents, January Soybeans up 3 ¼ cents and March wheat down ¾ of a penny. Yesterday, November 2018 soybeans broke through previous resistance set last month before the WASDE report and is now roughly 10 cents away from the contract high of $10.28. March corn is trading above the 20 day moving average this morning which could provide some intra-day support.

 

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Informa reduced their corn and soybean production estimates for Brazil for the 2017-18. Soybean production was reduced by 1 million metric tons to 110 million metric tons and corn production was revised lower by 3 million metric tons to 89 MMT. The company also reduced their estimate for Australian 2017-18 wheat production by 1.3 million metric tons to 20.3 MMT.

 

Statistics Canada released production numbers this morning, showing a larger than expected harvest. All wheat production was set at 29.98 million metric tons which was above expectations of 28 MMT. Canola production was set at 21.31 million metric tons which is a production record in Canada and above the highest trade guess of 21 MMT.

Australia’s Bureau of Meteorology announced yesterday that the surface temperatures in the tropical Pacific had reached La Nina levels. This weather event typically means colder winters in the Northern Hemisphere and warmer, wetter winters in the Southern Hemisphere. The Bureau also said that current models suggest the La Nina could be weak and not last long.   


 

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December 05, 2017 | Grain Hedge Insights | Kevin McNew | Views: 840

Grain Movement Down the Ohio River has Ground to a Halt

Grain Mostly Higher in the Overnight Session

Grain Movement Down the Ohio River has Ground to a Halt

In the overnight session grain was mostly higher with March corn up a cent, January soybeans up 3 ¾ cents and March wheat down ¾ of a cent. Soybeans met significant selling pressure yesterday after gapping higher and trading to November 9th highs. By the close of the day session January Soybeans had given back $.09 ¾ of the rally and closed near the opening tick. This morning’s trade has brought soybeans back above the $10.00 mark. The March corn contract briefly traded at $3.60 yesterday before selling pressure took over bringing the contract down to $3.525 by the close. The 20 day moving average is again overhead at $3.54 ¾ which may offer up some resistance in today’s trade.

 

Exporters sell 162,000 metric tons of grain sorghum for delivery to China during the 2017/2018 marketing year.-USDA


 

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Grain movement down the Ohio River has ground to a halt after a large traffic jam keeps barges from making progress down the waterway. The problem area is at Locks & Dam No. 52 near Paducah which has offered trouble earlier on this fall. It is now the second shutdown in 2 months caused by worn or missing sections of the Dam.

Australian wheat has experienced significant precipitation over the last week with the weekend bringing the most intense rainfall. The moisture has surely damaged some crop and has traders concerned quality problems and the possibility head sprouting in some areas. Harvest has mostly stalled until the fields dry, but the forecast for Eastern Victoria and Southeastern New South Wales is for off-and-on rain throughout the week.  

 

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December 04, 2017 | Grain Hedge Insights | Kevin McNew | Views: 490

Grains Higher in the Overnight Session

Cash Markets Moved Higher Last Week

In the overnight session the grains were higher with March corn up ½ of a cent, January Soybeans up 10 cents and March Wheat up 2 ¼ cents. January soybeans is now trading above the $10.00 mark, an area of strong resistance all Fall. Soybeans is now back to price levels that we have traded at prior to the November WASDE report with a resistance level at $10.08 ¼.  

 

Argentina precipitation over the last seven days has been strongest in the western part of the growing regions and relatively dry to the east. The soil moisture shows short to very short topsoil moisture in northern Argentina and marginally adequate to short moisture the other growing regions throughout the nation. The forecasts expects a ridge of high pressure to develop over Argentina next week which is expected to produce a number of high temperature days with little precipitation. There is concern that a net evaporation effect and deplete topsoil moisture which is critical for emergence of the newly planted crop.       

 

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The monthly Oilseed Crushings report released at 2 PM CST on Friday from the USDA estimated that 175.9 million bushels of soybeans were crushed in the month of October, this was a strong increase from September of 145 million bushels.  The estimates were above analyst expectations which averaged at 174.7 million bushels and ranged from 171 to 175.8 million bushels. The report also showed that 2.22 billion pounds of soybean oil was produced which was a 19 percent jump from September.  

 

 

The cash markets moved higher last week with corn basis up 3 cents and soybeans up 2 on average across the U.S. With harvest almost completely wrapped up, basis will have an opportunity to gain some ground going into the new year as farmers have filled and locked the bins and marketing stored grain is not necessarily high on their priority list.   


 

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December 01, 2017 | Grain Hedge Insights | Kevin McNew | Views: 635

US Wheat Prices Edge Higher Today Supported Partly by Potential Demand from Saudi Arabia

Overnight Session Has Grains Trading Higher

In the overnight session the grains are trading higher with March corn up ¾ of a cent, January soybeans up 2 cents and March wheat up 1 ¼ cents. March wheat prices tested resistance yesterday which held. The contract notched an intraday high of $4.39 and finished the day near the lows at $4.33 confirming selling pressure around the lows in late October. Corn prices are also near a resistance level that held on November 22nd near the $3.58 price level.

 

EXPORTERS SELL 130,000 METRIC TONS OF CORN FOR DELIVERY TO UNKNOWN DESTINATIONS DURING THE 2017/2018 MARKETING YEAR- USDA

 

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Argentina is expected to receive precipitation starting today and continuing throughout the weekend. On Friday, the rain is expected to cover southwestern Buenos Aires, northeastern La Pampa and San Luis with the weekend precipitation covering western Buenos Aires and parts of Cordoba and western Santa Fe. Brazil is also expected to receive favorable precipitation throughout the west central part of corn and soybean production regions, but the far south is expected to be dry through the remainder of the week.

Heavy rains are expected to intensify throughout Victoria and parts of South Australia threatening a standing wheat crop that is close to harvest. On Friday, Australia Bureau of Meteorology issued a “Severe weather warning for heavy rainfall.” These heavy rains and thunderstorms are expected to continue over the weekend and threaten to damage up to 4 million metric tons of wheat.

 

It was announced this morning that Taiwan Flour Millers Association purchased 81,780 metric tons of wheat to be sourced from the U.S in an international tender.   

  

 

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

November 30, 2017 | Grain Hedge Insights | Kevin McNew | Views: 569

Weekly Export Sales Disappointing for Corn and Wheat

Grains Trade Lower in the Overnight Session

In the overnight session the grains traded lower with March corn down 1 ¼ cents, January Soybeans down 4 ¾ cents and March wheat at 3 ¾ cents. Corn had nice bounce yesterday after prices approached previous lows set back in the middle of November. The Dec17-Mar18 corn spread widened out to -14 ½ cents, the most we have seen this year.

 

EXPORTERS SELL 525,000 METRIC TONS OF SOYBEANS FOR DELIVERY TO CHINA 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 110,000 METRIC TONS OF GRAIN SORGHUM FOR DELIVERY TO CHINA DURING THE 2017/2018 MARKETING YEAR- USDA

 

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Ethanol production declined slightly over the last week to 1.066 million barrels per day. Despite the decline this week's production was 5.3 percent above last year and was the 2nd highest weekly production on record. Ethanol production is 3.7 percent ahead of last years pace in the first few months of the marketing year which is well above the pace needed to meet USDA demand estimates. Ethanol stocks increased sharply to 22.044 million barrels, up 147,000 barrels from the previous week. Stocks have been seasonally very strong as we head into a time of the year when stocks continue to get bigger. Ethanol stocks this week are now 20 percent over last year's levels.  

 

Export sales were disappointing for both corn and wheat this morning. Old crop corn only posted 599,200 metric tons of sales which was down 45 percent from the previous week. Wheat sales also disappointed, missing estimates by a substantial margin and declining 8 percent from the previous week. Soybean sales met expectations and increase 9 percent from last week.

 

Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

184

250-450

Corn - OC

599

700-1,100

Soybeans - OC

942

800-1,200

 

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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