September 30, 2016 | Grain Hedge Insights | Kevin McNew | Views: 319
September 30, 2016 | Grain Hedge Insights | Kevin McNew | Views: 228

Weekly Cash Comments

Weekly Cash Commentary for week ending 09/30/2016

The cash market saw loses yet again this week with soybeans getting hit especially hard.

 

Corn continues to hold up as unseasonably strong export movement is holding basis up for the time being. On average corn saw basis losses of 1 1/4 cents per bushel. Ethanol plants are holding strong as well only off 1 cent. River facilities were the biggest loser in the corn market this week losing 3 1/2 cents.

 

Soybeans were off an average of 9 1/4 cents being heavily weighed down by crush facilities and river terminals. Crush facilities saw losses of 12 cents moving even lower from last week’s 23 cent drop. River terminals were hit the hardest this week off 22 3/4 cents per bushel. Potentially adding more pressure was the closure of three Mississippi River locks in southern Iowa and northern Missouri earlier in the week.

 

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


September 30, 2016 | Grain Hedge Insights | Kevin McNew | Views: 279

USDA Quarterly Grain Stocks Report to be Released Today at 11 CDT

Grains Start the Day on the Downside

Grains moved to the downside to start the day as traders await fresh news from USDA’s quarterly grain stocks report this morning. In outside markets, crude oil slipped slightly taking a breather from the $3 a barrel rally in recent days while the US dollar surged.

 

China announced they will approve corn export permits for two state-owned companies. China’s corn exports would be a first in a decade as the government looks to reduce massive stockpiles.

 

Ukraine's agriculture ministry and traders have agreed to export 16.5 million tonnes of wheat in the 2016-17 July-June season, news agency Unian quoted the agriculture minister as saying on Friday. The exports break down as 60 percent food wheat and 40 percent feed wheat, Unian said.
Ukraine and grain traders sign a memorandum each year in which the government promises to impose no restrictions on an agreed volume of grain and keep the export rules unchanged.
 

USDA’s quarterly stocks report is expected to show 1,754 MB of corn, 201 MB of soybeans and 2,397 MB of wheat on hand as of Sept 1. The report will be released at 11 am CDT. Also, USDA will have a wheat production estimate, which traders expect to show 2,323 MB of wheat produced in 2016.

This morning more economic data showed consumer spending and consumption in the US to be weaker than expected for the month of August. This helped deflate the US dollar off its overnight highs heading into the morning trade session.

 

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

September 29, 2016 | Grain Hedge Insights | | Views: 304
September 29, 2016 | Grain Hedge Insights | Kevin McNew | Views: 279

OPEC Countries Reach Agreement to Reduce Oil Production

Basis levels for soybeans Continue to Come under Pressure

Grains gave up most of yesterday’s gains, pushing solidly into negative territory to start the day. In outside markets, equity indices were slightly lower while crude oil was trying to hold on to modest gains.

 

Basis levels for soybeans continue to come under pressure especially along river terminals. Yesterday losses of 5 to 10 cents on soybean basis were fairly widespread. Some processing plants continue to hold firm on spot basis though. Corn, on the other hand, continues to hold up as unseasonably strong export movement is holding basis up for the time being.

 

Overnight, two different South Korea feed manufacturers were tendering for corn and soymeal. From Jordan, they are back in the market for 100,000 MT of hard milling wheat.  Jordan has struggled to make purchases in a series of wheat and barley tenders in recent months, with traders saying uncertainty about new quality controls and payment terms has reduced participation by major grain exporting houses.

 

The International Grains Council on Thursday cut its forecast for the 2016/17 world corn crop by 3 million tonnes to 1.027 billion, largely reflecting a downward revision for China.   World wheat production in 2016/17 was upwardly revised by 4 million tonnes to 747 million driven by higher outlooks in Kazakhstan, Canada and China.. In the US, rains continue to slow harvest in the Eastern Corn Belt and should limit the pace thru the weekend. The Western Corn Belt remains dry until Tuesday.

In a surprise move, OPEC countries agreed to reduce oil production to 32.5 million barrels of oil per day from 33.4 million. Saudi Arabia, the largest oil producer, is expected to give up 350,000 barrels a day, according to a senior OPEC source quoting the final proposal. Other OPEC nations are expected to lower production too, though more details were not immediately clear.
Three countries are exempted from the production cuts: Iran, Nigeria and Libya.

 

WEEKLY EXPORT SALES

                                         Actual      Expected

Corn                                   575           750-950

Soybeans                          1,692     1,100-1,300

Wheat                                 595          400-600

 

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

September 28, 2016 | Grain Hedge Insights | Kevin McNew | Views: 312
September 28, 2016 | Kevin McNew | Views: 198

Grains Gave Up Most of Yesterday’s Gains in the Overnight

Crude Oil is Holding on to Modest Gains

Grains gave up most of yesterday’s gains, pushing solidly into negative territory to start the day. In outside markets, equity indices were slightly lower while crude oil was trying to hold on to modest gains.

 

China will impose anti-subsidy duties of around 10% on imports of U.S. DDGs, the Commerce Ministry said in a preliminary ruling on Wednesday. The move was widely expected after the government announced a similar move on anti-dumping duties last week.

 

South Korea's Korea Corn Processing Industry Association (KOCPIA) has issued an international tender to purchase about 55,000 tonnes of optional-origin corn, European traders said on Wednesday.

This morning, USDA announced some big export deals. Export sales of 133,000 MT of soybeans for delivery to China and another 211,171 MT to Unknown for the 2016/2017 marketing year. For corn, there was a 1,577,340 MT deal to Mexico, with 1,036,320 MT for delivery during the 2016/2017 marketing year and 541,020 MT for delivery during the 2017/2018 marketing year.


 

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


 

September 27, 2016 | Grain Hedge Insights | Kevin McNew | Views: 284
September 27, 2016 | Grain Hedge Insights | Kevin McNew | Views: 242

Grains Had Modest Positive Gains in the Overnight Session

Crude Oil was Sharply Lower

Grains had modest positive gains in the overnight session while crude oil was sharply lower and the US dollar pushed higher off of its recent lows.

 

On Monday, USDA reported that 15% of the US corn crop has been harvested, up from 9% last week but below the 5-year average of 19%. Likewise, soybean harvest progressed to 10% from 4% last week, but slightly below the 5-year average of 13%.

 

Rains this week are expected to be confined to the East with the Ohio River Valley, Mid Atlantic and Carolinas with rain of 3 to 6 inches expected in some East Coast areas. Next week brings a chance of showers next Tue/Wed in the Western Cornbelt which could limit harvest advances.

 

Soybean basis fell sharply on Monday as any premium between and old- and new-crop bean deliveries has all but evaporated at most markets. Potentially adding more pressure to interior basis is the closure of three MS river locks in S IA and N MO due to flooding. The locks are expected to close later this week due to flooding.

Crude oil prices edged down on Tuesday as a jittery market reacted to statements by Iran that dimmed hopes for an agreement by major oil producers to cap or freeze output. As energy ministers arrived in Algiers for a summit on energy, Iran Oil Minister Bijan Zanganeh called the meeting set for Wednesday “consultative,” adding to concerns that OPEC member nations won’t adopt production limits to prop up the sagging price of oil.


 

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

September 26, 2016 | Grain Hedge Insights | Kevin McNew | Views: 301

Chicago Soybeans Futures Edge down on Monday

Russian wheat export prices rose last week for the first time since mid-August


 

Chicago soybean futures edged down on Monday to trade near a one-week low as weather forecasts suggested corp conditions would be dry enough this week to let farmers make headway in gathering what is expected to be a record US crop.

 

Heavy rains and flooding covered a broad area of the northern Midwest this past week. This halted the harvest of corn and soybeans and forced the closure of at least two Iowa crop processing plants. Parts of northern Iowa and southern Minnesota received several inches of rain at midweek; two-day rain totals topped 10 inches in some areas. The region is expected to see two days of drier weather before more rain moves in this week.

 

Cargill stopped taking deliveries of corn and soybeans at its processing plants in Cedar Rapids, IA due to flooding in the area. The soy plant is scheduled to be closed through Wednesday. Farmers are waiting for their fields to dry out before they can resume harvest.

 

The US Justice Department is looking into concerns that global consolidation among major seed and agricultural chemical companies may squeeze supplies of the building blocks for widely used genetically modified seeds, a farm group said. These federal inquiries started after Dow Chemical said in December that it would seek to merge with DuPont in a $130 billion deal.

Russian wheat export prices rose last week for the first time since mid-August, buoyed by demand from Egypt after it dropped its policy of not importing wheat containing the ergot fungus, agricultural consultancy IKAR said. Russia exported 7.8 million tonnes of wheat between July 1 and Sept 21, the agriculture ministry said. Grain exports were down 9 percent year on year.


 

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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