January 27, 2017 | Kevin McNew | Views: 200

Grains Drift Lower on SA Crop Potential

Grains Drift Lower on SA Crop Potential

Grains drifted lower for much of the night but were managing a late-session rally heading into the break. In outside markets, the US dollar was higher and crude oil lower.


Front-month March soybean futures sunk to fresh lows on this move of $10.43 and well off its highs of $10.80 established on Jan 18th. Easing concerns about flood issues in Argentina have helped in the pull back. Yesterday Argentina’s Buenos Aires Grain Exchange projected the bean crop there at 53.5 MMT at the high end of estimates floating around by private forecasters which have ranged from 51 to 54 MMT over the past week.


Corn has also moved this week as US-Mexico relations become stymied in a war of words about the US wall and potential trade restrictions. After Mexican President Nieto canceled his trip to the US, President Trump said the US would impose 20% tariffs on all Mexican imports to pay for the wall. This year so far Mexico is the single biggest buyer of US corn accounting for 10 MMT in sales of the total 39 MMT that has been purchased.


In Russia cold weather is expected to hit parts of the wheat crop there from Jan 27-Feb 4. Temperatures are expected to hit the low teens during this time period and there is no snow for protection with nearly 1 million hectares out of 17.4 million hectares of the crop. Jordan is seeking 25,000 MT of milling wheat.


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

January 26, 2017 | Kevin McNew | Views: 161
January 26, 2017 | Grain Hedge Insights | Kevin McNew | Views: 211

Wheat Exports Best this Year

Wheat sales come in at marketing year high

Wheat Exports Best this Year

Grains continued to drift lower overnight but got late-session buying interest from new export sales data. Outside markets saw the dollar reverse course early this morning and move into positive territory as did crude oil.


Egypt's state grain buyer GASC received offers from 13 suppliers at its wheat tender on Thursday. The lowest offer was for 60,000 tonnes of Russian wheat at $192.25/ MT (FOB). There was also a US HRW offer made at $197. Results for the tender are due later on Thursday.


A group of Israeli private buyers bought corn and feed wheat, all to be sourced from optional origins, in a tender that closed on Wednesday. Ton The tender had sought up to 85,000 tonnes of corn, 40,000 tonnes of feed wheat.


Soybeans took another shot at the $10.51 mark on the March contract marking the third session in a row the market has gone to that level but found little selling strength to push it thru.


US export sales this morning were impressive for wheat, with a marketing year high of 853,400 MT for the week for OC plus another 103,900 NC. Corn was also strong besting expectations by a wide margin while soybeans was inline with expectations.


Weekly Export Sales-

  Actual Expected
Corn 1,391 700-1,000
Soy 665 450-650
Wheat 957 200-400

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

January 25, 2017 | Kevin McNew | Views: 210
January 25, 2017 | Grain Hedge Insights | Kevin McNew | Views: 281

US Dollar Index Falls Below the 100 Mark

Grains Continue Lower in the Overnight

Grains continued lower overnight although managed to curb losses heading into the morning break. In outside markets, the US dollar index fell below the 100 mark for the first time in 7 weeks and equity futures firmed into all-time high territory.   


USDA announced export sales 141,224 of corn to unknown destinations


Conditions in Argentina appear to be stabilizing for after serious flooding after Christmas stoked fears of big crop losses. Hot and dry weather in the past week has helped limit the potential for loss. Analysts down there suggest only about 10% of the production is at risk which is in-line with estimates floating around the Argentina’s crop size will be 52 to 54 MMT vs 57 current projected by USDA. One other potential driver for beans is the thought that Argentina farmers will be slow to sell beans but quick to let go of corn off the combine as the eliminated export tax on corn will give farmers incentives to sell. Meanwhile, the soy export tax remains intact until Jan 2018.


On the soy chart, yesterday saw a couple of tests of fresh lows around 10.51 versus March before closing at 10.59. But, in overnight trade, the market quickly returned back to the recent lows testing the 10.50 wall a couple of times overnight before recovering to the 10.54 area.  Watch the 10.50 area as it seems to be serving as key support right now.

New procedural moves by the Trump administration are causing concern in grain after the EPA announced a delayed implementation of its RFS for 2017. China's corn futures are on track to rise almost 3 percent this month, on speculation that major corn-growing provinces in the world's top producer are preparing to buy grain in a bid to support farmers as demand is expected to drop. March corn futures came off the recent highs yesterday, posting a key reversal on the charts.


Japan's Ministry of Agriculture is seeking to buy a total of 110,687 tonnes of food quality wheat from the United States and Canada in a regular tender that will close late on Friday.


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


January 24, 2017 | Kevin McNew | Views: 216
January 24, 2017 | Grain Hedge Insights | Kevin McNew | Views: 195

Wheat Continues to Inch Higher

Soybeans Turned Higher Overnight Trying to Recover from Losses

Wheat Continues to Inch Higher

Soybeans turned higher overnight trying to recover from 3 days of losses while wheat and corn were coming into the morning break mostly steady from yesterday’s close.


USDA announced the sale of 163,000 MT of soybeans to Unknown (60,000 MT for NC 2017), 112,000 MT of soybeans to Mexico and 125,000 MT of corn to Mexico.


Argentina’s dry spell is expected to persist Jan. 24 through Jan. 30. Temperatures are expected to be hot late this week, the weekend and early next week with upper 90’s and lower 100’s and possibly causing some crop stress. Areas of southern Argentina that missed meaningful rainfall this past weekend will have increasing crop stress.


In Brazil, conditions remain nearly ideal in key crop areas. Espirito Santo north through much of eastern and central Bahia will continue to miss meaningful precipitation. This, combined with the summer heat, will lead to more crop stress for this portion of the country.


The Chinese New Year gets going at the end of this week and coincides with a downtime in economic activity for the country. China did release their latest trade data for December. This showed Dec DDG’s were 70 TMT taking total year to date to 3.07 MMT off 55 percent on the year. Ethanol was 125 TMT taking total for the year to 890 TMT. Bean imports for Dec were 9.0 MMT taking total year to date to 83.9 MMT, up 2.7 percent on the year.

Wheat continues to inch higher mostly driven by short-covering. The recent weakness in the US Dollar has helped give a boost to wheat prices, as did a bigger than expected cut in US winter wheat plantings. Russian wheat prices have also shown a slow creep higher on low farmer sales there. But large US and global stocks continue to keep a lid on big rallies. Informa will release 2017 US acreage forecasts later today.


On Monday, the Trump administration withdrew from the Asian TPP trade deal and drew criticism from the ASA soybean association and the National Cattlemen's Association. The dollar steadied on Tuesday, recovering from a dip on fears that U.S. President Donald Trump's focus on protectionism over fiscal stimulus suggested his administration might be content to gain a competitive advantage through a weaker currency.

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

January 23, 2017 | Kevin McNew | Views: 245
January 23, 2017 | Grain Hedge Insights | Kevin McNew | Views: 165

Soybeans Start the Week Heading Lower

US Dollar Feels Pressure for First Week of Trump's Presidency

Soybeans started the week the same way they finished last week, heading lower. Corn and wheat were also under modest pressure. In outside markets, US equities and the dollar moved south as did crude oil.


Soybeans slid for a third straight session on Monday as forecasts of dry weather in Argentina's flooded crop areas eased concerns over harvest losses in the major exporter. The weather there over the next week is expected to be hot and dry, helping ease flooding issues. Last week, the Rosario grains exchange cut its forecast for the 2016/17 Argentine soybean crop to 52.9 MMT from 54.4 MMT previously. In Brazil, heavy rains have slowed soybean harvest and could put at risk some production from spoilage. Farmers institute, Imea, said the soy harvest in Mato Grosso was 11.9% complete on Friday, an advance of more than 6% over the past week.


A group of Israeli private buyers has issued international tenders to purchase up to 85,000 tonnes of corn and 40,000 tonnes of feed wheat. Egypt’s GASC bought 60,000 MT of Ukraine wheat. Offers came from Russia, Ukraine and Romania. SovEcon said in a note that Russia needs to find new markets for its grain exports and speed up its supplies abroad to ease pressure on the domestic market after a record crop of 119 MMT in 2016. Customs data shows Russia's December grain exports fell to 3.18 million tonnes from 4.05 million tonnes in November due to storms in ports and the rouble strengthening against the dollar.

The US Dollar felt some pressure for the first week of Trump’s presidency as traders expect his tax & fiscal stimulus policies to take time to enact and have yet to be spelled out by the new President. Also, a bow shot about American nationalism in his inauguration speech has the potential to cut into global trade.


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

January 20, 2017 | Grain Hedge Insights | Kevin McNew | Views: 138

Chicago Soybeans Slid for a Second Session

US Dollar Recouped Losses on Friday

Chicago soybeans slid for a second session on Friday with a strong dollar weighing on prices, although crop-damaging floods in Argentina kept a floor under the market. The dollar recouped earlier losses on Friday while stocks were little changed as investors refrained from big bets ahead of Trump’s inauguration as US President.


Soybeans are drawing support from the threat of rain-damage to crops in Argentina, the world’s third largest soybean exporter and the top supplier of soymeal and soyoil. Argentina will harvest 52.9 MT of soy this season, the Rosario grains exchange said on Thursday, cutting its previous 54.4 MT forecast due to bad weather.


US producers are poised to plant 90.52 million acres of soybeans later this year, topping the all-time high set in 2016 by about 7 million acres, a recent Farm Futures survey indicates.


Wheat fell for a third consecutive session on concerns over slowing demand after prices earlier this week climbed to their highest since August.


Weekly Export Sales-

(based on reports from exporters for the period Jan 6-12, 2017)


                                            Actual      Expected

Corn                                     1,368      900-1,200

Soybeans                                 980         400-600

Wheat                                     243         250-450


Export sales numbers for corn were up noticeably from the previous week and 69 percent from the prior 4-week average; soybeans were also up from the previous week and 22 percent from the prior 4-week average. Wheat was down 38 percent from the previous week and 33 percent down from the prior 4-week average.


The dollar held its gains on Friday as investors braced for US President-elect Donald Trump to be sworn in, while the Euro rebounded as the European Central Bank held policy steady. A stronger dollar makes US agricultural producers uncompetitive in the world market, giving advantage to rival exporters in South America and the Black Sea region.


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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