December 27, 2016 | Grain Hedge Insights | Kevin McNew | Views: 152

South American Weather Slows Soybeans

Grains saw higher movement coming out out of the holiday weekend. Crude moved higher as well in outside markets.

Heavy rains in Argentina failed to make it Buenos Aires, where dryness is threatening to dent soybean production. The Buenos Aires Grains Exchange forecasts Argentina's soy planting area at 48 million acres. The dry area of southeast Buenos Aires was originally slated for 4 million acres of soy, some of which may be lost. Nationwide, the exchange says about 76 percent of the 2016/17 soy crop has been planted so far.

 

China has culled more than 55,000 birds after an outbreak of bird flu last week. The H5N6 strain was confirmed in Yining and has killed 10,716 birds, according to China’s Ministry of Agriculture. This is the fourth flu outbreak among poultry since October and brings the total cull since then to more than 170,000 birds.

 

China has not set import taxes for 2017 yet and expects to do so by the end of January, a customs official said. This comes among speculation that China has ditched tariffs for U.S. and Brazilian importers. The 5% tariff was introduced at the start of this year and is set to expire December 31.


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December 23, 2016 | Grain Hedge Insights | Kevin McNew | Views: 97

Weekly Cash Comments

Weekly Cash Commentary for week ending 12/23/2016

The cash markets saw mostly higher movement this week with prices continuing to stay in a tight range.

 

On average corn was up 1 cent after moving lower last week. Ethanol plants moved higher as well, up 2 cents per bushel. Weekly EIA report was close to expectations, finding only a small reduction in run times off last week's record high levels.  Production slipped less than one-half percent to a 1.036 mil bbl/day rate.  Carried forward, such a rate would utilize 5.54 billion bushels of corn.  Corn along the river was off again this week, moving 1/4 cent lower.

 

Soybeans saw relatively strong movement this week gaining 2 cents per bushel. Crush facilities were once again the biggest movers gaining 3 1/2 cents. Soybeans along the river also moved higher, gaining 1/4 cents. Yesterday the EU released their official soybean import data. Soybean imports in 2016/17 were reported as having reached 6.2 million tonnes by Dec. 20, down 5 percent from 6.5 million at the same stage last season.

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

December 22, 2016 | Grain Hedge Insights | Kevin McNew | Views: 330

Crude Oil on a Downward Trajectory

Grains Continue Their Move Lower

Crude Oil on a Downward Trajectory

Grains continued to move lower with soybeans leading the complex on a 5-cent decline. In outside markets, crude oil also was on a downward trajectory.

 

In South America, the evening GFS model run had no major changes for week 1. In week 2, rainfall amounts were increased for a majority of southern and central Argentina Jan. 1-2. Amounts were also increased from northern Argentina north through Paraguay and west-central Brazil for Jan 3-5.

 

Chinese November customs data showed strong U.S. soybean purchases for November, up 32% versus last year. However, China has found two more cases of human bird flu infection, bringing this week's total to three and stoking fears the deadly virus could spread at a time when other Asian nations are battling to control outbreaks of the disease. Health officials in nearby South Korea and Japan have been scrambling to contain outbreaks of different strains of bird flu, with the poultry industry there bracing for heavy financial losses.

 

Weekly EIA report was close to expectations, finding only a small reduction in run times off last week’s record high levels.  Production slipped less than one-half percent to a 1.036 mil bbl/day rate.  Carried forward, such a rate would utilize 5.54 billion bushels of corn.  Note, though, that the marketing year to date level is closer to 5.35 billion versus USDA at 5.3.  

 

Weekly Export Sales-

                                    Actual           Expected

Corn                              1,251           800-1,100

Soybeans                       1,812         1,100-1,400

Wheat                           297.8             300-500

 

EIA crude oil inventories yesterday showed a 2.25 million barrel build versus a 2.5 million barrel draw-down in stocks, which had been expected. Net imports grew by 1 million barrels to 7.9 million barrels in the period which fueled much f the inventory jump.

 

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

December 21, 2016 | Grain Hedge Insights | Kevin McNew | Views: 547
December 21, 2016 | Grain Hedge Insights | Kevin McNew | Views: 221

Soybeans Trying to Erase Losses in the Week

Corn and Wheat Drift Lower

Grains were mixed overnight with soybeans trying to erase part of the 30-cent losses in the week. Corn and wheat drifted lower.

 

Brazil analyst AgRural estimated Brazil's 2016/17 winter Corn crop at 59.9 MMT. versus last season's crop of 40.7 MMT. They estimated the total Brazil 2016/17 Corn crop at 88.3 MMT up from last seasons poor crop of 67.0 MMT. Meanwhile Rabobank commodity analysts are forecasting 16/17 Brazil first season corn crop at 28.0 mln mt and the second season 16/17 corn crop at 56 mln mt, with total 16/17 crop at 84.0 mln mt.

 

Overnight, the Taiwan Flour Millers' Association has purchased 93,125 tonnes of milling wheat to be sourced from the United States in an international tender which closed on Wednesday. Importers in the Philippines have issued an international tender to purchase about 25,000 tonnes of milling wheat to be sourced from Australia.

EIA crude oil inventories will be announced later this morning. Traders look for a 2.5 million barrel cut in stocks from last week. If realized, that will be the 5th week of inventory draws.

 

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


 

December 20, 2016 | Grain Hedge Insights | Kevin McNew | Views: 474
December 20, 2016 | Grain Hedge Insights | Kevin McNew | Views: 239

Grains Continue to Sink Lower

Crude Oil found strength as traders look for shrinking US inventories.

Grains continued to sink lower on expectations of huge crops out of South America, while in outside markets equity futures and the USD moved higher.

 

Soybeans are still being pressured by expectations of good rain in Argentina mid-week and into the weekend. Beans fell below $10.20 for the first time since November 22 and has it sights set on the 50-day MA around $10.08. For corn, the 50-day MA is around $3.50 right around the $3.52 last trade. Brazil has widespread rains as well except for the far North where there is limited grain crop production.

 

In China, soybean futures also fell overnight, but hog margins continue to be strong. There was some interest in wheat buying as Taiwan and Egypt were tendering for wheat.

Crude oil found strength as traders look for shrinking US inventories. The US dollar continues to firm touching back to the 14-year highs hit late 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)


 

December 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 479
December 19, 2016 | Tech Talk | Charlie Trauger | Views: 852

New Technology Could Transform Agriculture

The ideas behind Bitcoin may one day transfer to agriculture

New Technology Could Transform Agriculture

What is it?

Invented in 2008 – bitcoin was invented to become an alternative system of money that would be beyond the control of the government and central banking entities. Perhaps best defined by Wikipedia;

A blockchain[1][2][3] — originally, block chain[4][5] — is a distributed database that maintains a continuously-growing list of records called blocks secured from tampering and revision.[1] Each block contains a timestamp and a link to a previous block.[6]

The blockchain is a technology that underlies bitcoin—conceived in 2008 and first implemented in 2009—where it serves as the public ledger for all transactions.[1] In the bitcoin case, every compatible client is able to connect to the network, send new transactions to it, verify transactions, and take part in the competition to create new blocks.[7]:ch. 01 The competition creating new blocks is known as mining.[7]:ch. 01 The bitcoin design has been the inspiration for other applications.[1][3]

Full definition here; https://en.wikipedia.org/wiki/Blockchain_(database)

Blockchain has many other definitions – distributed ledger technology, permissioned ledgers, mutualized database and many more I am probably missing.

What could it do for agribusinesses?

Consumers desire more transparency into how the food they consume has been grown, transported and packaged. I am not sure how much they are willing to pay for the added costs to create this chain of information. However, Blockchain could provide a cost-effective time-consuming method to create the tracking of food products through the entire agricultural value chain. Here are a few areas that it could provide a technical solution for some of the more routine time-consuming activities in our world:

  • Tamper resistant data transfers across our industry.
  • Reduce counter-party risk.
  • Save costs on trading and movement of commodities across the value chain.
  • Create transparency in farming techniques and products and food production.

For a great story on this, check this link out; https://news.bitcoin.com/blockchain-agriculture-industry/

Pitfalls

With an interest in the new technology, I recently purchased a book on Kindle called “Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World”.  I am about half finished with it and it is a good read giving the reader

many ways in which it can transform how things are traded, transferred and paid for in our world. The reason that I have not finished it as of yet was a story on hacking when I reached the half-way point. I had been lead to believe this was the end all solution for

most everything in our ag world.  Then, on June 19th I read about the hack of the chain that pulled $79.6 million Decentralized Autonomous Organization and quickly realized that perhaps there are few more kinks to work out on the technology!

Big problems always seem to get solved, so I am sure many are feverishly working on a fix to make the technology safer. 


Summary

Either way, Blockchain technology is something for all of us to keep our eyes on.  The potential for speeding up financial transactions alone would create some wonderful efficiencies in the world.  Here is a good link with 8 charts that do a great job of explaining it

from the book I mentioned earlier – “Blockchain Revolution”; http://raconteur.net/business/the-future-of-blockchain-in-8-charts.

With the potential that Blockchain could provide, I certainly plan on keeping my eye on it and will share here with anything I uncover.  Both NASDAQ and the Australian Securities Exchange are both implementing it, so it’s already here.

 

Charlie Trauger is Global Director of Agriculture for GlobalView Software, Inc. of Chicago IL.  He received his Bachelor of Science degree from the University of Nebraska and also completed course work in computer science from Metropolitan Technical College in Omaha, NE.  Charlie was raised on a row crop and cow calf operation in Nebraska and is still involved in the family business.  Charlie has spent over 25 years in the agricultural software and data business and recently relocated back to the family farm in Nebraska. Follow him on Twitter @charlietraug

December 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 255

Some Damage Expected to Winter Wheat Crop from Arctic Blast

Grains mostly lower going into the morning break

Some Damage Expected to Winter Wheat Crop from Arctic Blast

Grains were mostly lower led by soybeans which suffered double-digit losses going into the morning break. Wheat was in positive territory thanks to cold temps threatening the US wheat crop.

 

Argentina weather materialized as expected with 45% coverage in rain over the weekend. And the 5-day forecast looks to get 70% coverage. Even all the way out to the 16-30 day forecast, the weather models showed more rain for Argentina in the latest runs versus what they were showing on Friday. In Brazil, there is only limited dryness in about 10% of the crop growing area but overall conditions are nearly ideal. On Friday SAFRAS private consultant put the bean forecast at 106 MMT, well above 102 to 103 by most analysts.

 

Meanwhile, the arctic blast that swept across the US over the weekend may have caused some damage to as much as half of the winter wheat crop. This put a small bid under wheat overnight.

 

In export news, importers from the Philippines purchased an unknown volume of milling wheat and feed wheat from Australia in an international tender that closed on Wednesday.

Oil prices fell on Monday as a stronger dollar off-set the delay of new Libyan oil exports, amid expectations of tighter crude supply going into 2017. On Friday, Baker Hughes US oil rig count added 12 rigs in the week to Dec. 16, bringing the total count to 510, the highest since January, though still below 541 rigs a year ago.

 

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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