May 26, 2017 | Kevin McNew | Views: 184
May 26, 2017 | Grain Hedge Insights | Kevin McNew | Views: 186

Weekly Cash Comments

Weekly Cash Commentary for week ending 5/26/2017

Basis levels continued to rise this week with corn and soy basis advancing about 2.5 cents across the US on average.

 

Active farmer planting and weaker futures prices have helped to support basis in the past two weeks. For corn, basis in Western Kansas continues to be an area of notable strength. This week we also saw some activity good movement by Corn plants in Southern Indiana, although basis improvements were relatively short-lived for only a couple of days. There are also some reports of a few isolated push opportunities by buyers that look to get short-term needs covered.

 

For soybeans a few soy crushing plants in the Western Cornbelt increased their basis this week, and plants in Northern Indiana and Ohio were trying to bid up basis as well with gains of 3 to 5 cents fairly typical in these regions.

 

On the river, market basis for corn was notably weaker this week with a 2.5 cent loss on average across buyers. The Gulf was off 1 cent, but some river markets were off 3 to 5 on the week.  For soybeans, basis levels at river terminals were up 1.5 cents on average, lagging the broader market gains of 2.5 cents.

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May 26, 2017 | Grain Hedge Insights | Kevin McNew | Views: 190

Soybeans Move to Fresh Lows Overnight

New Crop Corn and Bean Sales for the US Continue to Disappoint

Grains continued to grind lower overnight with soybeans moving into fresh 11-month lows.

 

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In international news, Japan bought food quality wheat overnight in a usual tender bid. Of the 117,800 MT deal, the US garnered nearly 80,000 MT with the remainder going to Australia. Also, Philippine feed makers were in the market for 50,000 MT of South American soymeal. And, a South Korea feed group bought 65,000 MT of feed wheat, likely to come from the Black Sea region.

 

The International Grains Council raised its forecast for global grains consumption for 2017/18 on Thursday, signalling a bigger draw-down of world stocks than previously expected. The IGC, in its monthly report, revised its global grains consumption estimate for 2017/18 up by 7 MMT to 2.086 billion tonnes, just below the 2.087 billion forecast for 2016/17. The group attributed the increase to higher industrial consumption in maize-based ethanol in the United States and starch in China.

 

New-crop corn and bean sales for the US continue to be disappointing with USDA’s weekly report on Thursday showing no new deals. So far, 2017 new-crop corn sales have totaled 2.4 MMT vs 3.5 MMT for the same time last year, while soybeans are only 2.8 MMT currently for new-crop vs 3.6 last year at this time. Keep in mind USDA expects soybean exports in 2017/18 are expected to a record large 2.15 billion bushels, up 5% from this year. With disappointing pre-sales so far & heated competition from South America, that may be a difficult mark to hit.

 

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

May 25, 2017 | Grain Hedge Insights | Kevin McNew | Views: 164

Grains Bounce Higher in the Overnight

Export Sales Number this Morning are Dismal for New Crop Deliveries

Grains bounced higher overnight with soybeans leading the complex on a 4 cent advance.

 

USDA reports a 115,400 MT sale of US corn to unknown destinations for 2016/17 marketing year.

 

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Rains continued to be problematic for IN/OH with 3 to 5 inches of rain falling in the last 24 hours and more expected this weekend. Next week should bring more showers to MI, KS, MO & S. IL.

 

Yesterday, meeting minutes from the Fed revealed they would hold off on raising interest rates until they see evidence that a recent economic slowdown was transitory.   Nearly all policymakers at the May 2-3 meeting also said they favored starting the wind-down of the Fed's massive holdings of Treasury debt and mortgage-backed securities this year.

 

 

This morning’s export sales report was dismal again for new-crop deliveries of corn and beans.

 

Export Sales-

 

   Actual

   Estimated

Wheat - OC

   202

   0-200

Wheat - NC

   343

   250-450

Corn - OC

   457

   600-900

Corn - NC

   1

   0-200

Soybeans-OC

   472

   200-400

Soybeans-NC

   6

   0-150

 

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May 24, 2017 | Grain Hedge Insights | Kevin McNew | Views: 132

Chicago Wheat Futures Slid for a Third Session

Oil Prices Steadied on Wednesday

Chicago wheat futures slid for a third session with the US Hard Red Winter crop’s resilience to late spring snowstorms pulling the market lower while soybeans were virtually flat after recovering from early losses. Corn was down slightly, extending the previous day’s fall on concerns over planting delays in the US grain belt.

 

The market awaits the USDA’s first corn condition ratings for the season, which the government expects to release in its next weekly crop progress report on May 30.

 

US farm groups on Tuesday pushed back against President Trump’s proposal to slash agriculture spending, viewing it as a fresh threat to a struggling farm economy. The White House on Monday proposed $46.54 billion in cuts to federal government funding for the ag sector over the next 10 years, including limits on federal subsidies for crop insurance premiums. Congress has the final say on the government's budget and lawmakers said the president’s plan stands little chance of passing.

 

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Oil prices steadied on Wednesday as investors waited for news from Vienna where ministers from OPEC and other exporting countries were discussing whether to extend production cuts into the first quarter of next year. Benchmark Brent Crude Oil was up 10 cents a barrel at $54.25 by 1210 GMT. US light crude oil was unchanged at $51.47.

 

 

Both crude benchmarks have gained more than 10 percent from their May lows below $50 a barrel, rebounding on a consensus that the Organization of the Petroleum Exporting Countries and other producers will maintain strict limits on oil production in an attempt to drain a global oversupply. OPEC has promised to cut supplies by 1.8 million barrels per day until June and is expected on Thursday to decide to prolong that cut by up to nine months.

 

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May 23, 2017 | Kevin McNew | Views: 121
May 23, 2017 | Grain Hedge Insights | Kevin McNew | Views: 368

USDA Crop Progress Report Showed Another Strong Week for Farmer Planting

Grains were weaker to start Tuesday

Grains were weaker to start Tuesday giving up all of Monday’s gains.

 

EXPORTERS SELL 126,000 METRIC TONS OF SOYBEANS FOR DELIVERY TO UNKNOWN DESTINATIONS DURING THE 2016/2017 MARKETING YEAR- USDA

 

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USDA’s crop progress report showed another strong week for farmer planting. Corn planting hit 84% vs 71% last week while soybean planting moved to 53% planted vs 32% last week. Although there was no national crop ratings on corn, state ratings from IL improved to 51% good-to-excellent compared to 42% last week, and IA’s first rating came in at 75% good-to-excellent. Winter wheat conditions nudged higher to 52% good-to-excellent vs 51% last week.

 

In Brazil, the supreme court there will be weighing a decision to be announced on Wednesday about whether to let the corruption investigation of President Temer move forward. This will have important implications for the Brazilian markets and the Real. In Argentina, they have their own currency woes as the Argentinean Peso hit its lowest level ever against the US Dollar on spillover effects from the Brazil crisis.

 

Chinese soybean imports for April were record large and South America shipped its highest ever monthly amount to China to the tune of 6.2 MMT. In Ukraine, Lanworth is forecasting wheat yields are likely to fall to 3.72 tonnes per hectare this year from a record 4.21 tonnes last year. It said favorable weather could push the yield up to last year's level, but poor conditions could cut it to around 3.40 tonnes.
 

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May 22, 2017 | Grain Hedge Insights | Kevin McNew | Views: 308

Grains Start the Week in Positive Territory

Cool and Wet Weather in the US Continues

Grains started the week in positive territory supported by cool wet weather and a continued slide in the US Dollar.

 

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Overall the weather pattern in the US continues to suggest cool and wet weather for much of the country. Wetness will continue for the next two weeks with much of the precip hitting the already soaked areas of MO/IL/IN/OH. Temperatures for the next 5 days should be well below normal in the Western Cornbelt but should return to normal for much of the country after that.

 

Corn planting is expected to be about 85% planted in USDA’s crop progress report released this afternoon. But wet weather and re-planting issues will likely be talked about in coming days. Crop condition ratings won’t be released until next week, but early states results in IL showed only 42% of the crop in good-to-excellent condition while MO was 49%.

 

Russian wheat export prices rose last week, supported by a state purchase by Egypt, the largest buyer of Russian wheat, and expectations that the rouble currency would rise further against the dollar, analysts said on Monday. Black Sea prices for Russian wheat with 12.5 percent protein content were at $185.50 a tonne FOB at the end of last week, up $1 from a week earlier, Russian agricultural consultancy SovEcon said.

 

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May 19, 2017 | Grain Hedge Insights | Kevin McNew | Views: 309

Weekly Cash Comments

Weekly Cash Commentary for week ending 05/19/2017

Grain basis found some upside this week with corn advancing 2.2 cents on average for the week while soybeans garnered a 2.5 cent move higher.

 

Corn found strength as farmers stay tied to their planters which limited pipeline supplies. Areas of Western Kansas continued to show some buoyancy as for the 2nd week in a row the region showed strong basis gains. Also, river terminals along the MS/IL river system were also generally higher with gains of 3 to 5 cents on the week being fairly typical, and on average river buyers were up 3.5 cents. Ethanol plants as a group managed only a 1.5 cent advance on the week although some facilities did record 5 to 8 cent gains.

 

For soybeans, basis levels were also generally higher albeit with soy crushing plants doing most of the higher bidding this week with a collective 3.2-cent gain for the week. There were a fair number of Western Cornbelt plants raising their basis by a dime. River terminals, on the other hand were bucking the overall trend as finished the week about 1-cent lower. The late week selloff in bean futures seemed to trigger a risk-off attitude as river buyers became wary of slowing exports in the face of Brazil’s sharp currency devaluation on Tuesday.

 

 

The corn competition landscape saw only modest changes this week as ADM Cedar Rapids won back its territory by bidding up basis a nickel on the week to -10N. ADM Columbus used a basis improvement on Thursday to -16N to improve its drawing area after slipping in size early in the week.

 

Soybean competition was mostly stable in IA/IL this week as plants here mostly kept basis unchanged. However, ADM Deerfield, MO bumped its basis by a dime to -10N, helping expand the plant’s drawing region into Eastern KS.

 

 

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May 19, 2017 | Grain Hedge Insights | Kevin McNew | Views: 352

Massive Soy Sales for Brazilian Farmers Yesterday

Soybeans Recovered Overnight

Soybeans recovered overnight trying to pair back the 30-cent losses from Thursday. Corn and wheat were also firmly in positive territory to start the day.

 

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US weather in the Cornbelt through the end of May should be cooler than normal with daily averages coming in 10 to 15 degrees below normal. Rainfall is expected to be on the topside of normal with KS/MO expected to see totals of up to 4 inches through this weekend.

 

Brazilian farmer sales were said to be massive yesterday following the collapse of the Brazilian Real. Reports vary from 2 to 5 MMT were sold yesterday alone as farmers raced to cash in on the currency swing lifting their farm-gate prices. Even so, Brazilian soy farmers have sold only half of their record 2016/17 crop by Friday, compared to 67 percent sold at this time last year and a 5-year average of 65 percent of sales, independent consultancy Safras & Mercado said.

The condition of French soft wheat declined slightly last week, with 75 percent of crops rated good or excellent as of May 15, down from 76 percent a week earlier, farm office FranceAgriMer said on Friday. The ratings slip reversed a small improvement in the previous week, and may indicate that growing conditions in the European Union's biggest cereal producer remain mixed despite rainfall and warmer temperatures this month that broke a dry, cold spell in April.

 

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