August 10, 2017 | Grain Hedge Insights | Kevin McNew | Views: 366

USDA WASDE Report Out Today at 11 CST

Grains Were Up in the Overnight Session

In the overnight session December corn up ¼ cent,  November soybeans is up 4 ¾ cents and December wheat is up 1 ¼ cent. Traders have been positioning before the August WASDE report which is scheduled for release at 11 CST.

 

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Brazil’s agricultural statistics agency released its 16/17 corn and soybean forecast which showed a revision higher for both. Brazil’s 16/17 corn crop forecast increased 1.2 MMT to 97.2 while their soybean crop was revised only slightly, up .08 MMT to 114 in the same marketing year.

 

Ethanol production increased by 10 thousand BPD to 1.012 million BPD according to the EIA report on Wednesday. Despite the increase, weekly ethanol production was down nearly 1 percent compared to the same week last year. With July ethanol production numbers in the books, we will need to see roughly a 6 percent increase in ethanol production throughout the remainder of the marketing season to meet the USDA’s corn used for ethanol projection. Although this is possible, it is unlikely and may be reason enough to see the USDA revise their ethanol forecasts lower on the old crop balance sheet in today’s report.

 

Ethanol stocks increased to 21.347 million barrels from 20.852 million barrels last week. Although ethanol stocks have seen a drawdown since March when they peaked for the year, they remain at record highs when comparing on a same week basis.

 

Old crop export sales for both corn and soybeans missed expectations with soybeans actually recording a marketing year low, down 83 percent from the prior four week average. All new crop sales were strong however, with corn and soybeans both beating analyst expectations.  

 

Weekly Export Sales-

 

 

Actual

Estimated

Wheat

464

250-450

Corn - OC

52

100-300

Corn - NC

628

400-600

Soybeans - OC

45

100-300

Soybeans - NC

639

250-450


 

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August 09, 2017 | Grain Hedge Insights | Kevin McNew | Views: 397

Corn Yield Looks to Be Reduced in Tomorrow’s WASDE Report

Grains Trade Higher in the Overnight Session

In the overnight session the grains traded slightly higher with December corn up ½ a cent, November soybeans up 1 ¾ cents and Chicago wheat up 2 ¼ cents. The cool and dry weather forecast across key growing regions continues to fan the uncertainty surrounding this year's crop and anticipation for the USDA WASDE report to be released on Thursday seems to support the market.

 

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Thursday’s WASDE report will be released at 11 AM CST and will include the USDA’s first survey based production forecasts for 2017. In the latest poll by Reuters, the average trade guess is for corn yield to be reduced to 166.2 BPA from 170.7 in the July report. Analysts are expecting corn production to be revised to 13.855 billion bushels, down from 14.255 billion bushels last month.

 

For soybeans, the average analyst guess is looking for yield to be revised lower by .5 BPA to 47.5 BPA and for production to slip from 4.26 billion bushels in July to 4.212 billion bushels.  

 

Analysts polls show wheat production is likely to be revised lower as well with all wheat production expected to fall from 1.76 billion bushels in July to 1.711 billion bushels in August. The largest revisions are expected to be made to the spring wheat crop which has suffered from drought and heat in the western Dakotas into Montana for the majority of the growing season.

The Japanese Ministry of Agriculture sought 120,000 metric tons of feed wheat and 200,000 metric tons of feed barley in a tender this morning. It was also reported that Taiwan’s MFIG rejected all offers in a tender to buy 130,000 metric tons of corn.

 

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August 08, 2017 | Grain Hedge Insights | Kevin McNew | Views: 273

National Soybean Crop Condition Revised Higher This Week

Market Continued Higher in the Overnight Session

The market continued higher in the overnight session with December corn up ¾ cent, November soybeans up 8 cents and wheat up 2 cents. The market will digest the latest updates in the crop conditions report, but most attention will be directed toward the August USDA WASDE report scheduled for release on Thursday.  

 

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The weekly crop progress report showed a continued deterioration in the national corn crop. In the 18 states that make up over 90 percent of our acres, corn rated good-to-excellent slid to 60 percent from 61 percent the previous week. Good-to-excellent ratings declined by 5 percent in Illinois to 58, down 1 percent in Iowa to 64, down 1 percent in Minnesota to 80 and down 1 percent in Nebraska to 59. The decline in good-to-excellent ratings was partially offset by a 3 percent increase in Indiana to 52, a 2 percent increase in Missouri to 63 and a 1 percent increase in North Dakota to 40.   

 

The national soybean crop condition was revised higher this week to 60 from 59 percent last week with some of the largest increases coming from North Carolina, Ohio, North Dakota, South Dakota and Indiana this week. Spring wheat conditions improved by 1 percent this week to 32.

Precipitation is expected in the Southern Plains and Lower Mississippi Valley in both the 1-5 and 6-10 day weather forecast. The Midwest is expected to stay cool, but the mild and dry pattern is expected to cause some moisture stress to the corn and soybean crop.    

 

Figures from from the General Administration of Customs of China showed that soybean volumes imported during July increased by 31.1 percent to 10.08 million metric tons. According to one analyst, the strong increase can be explained by delayed arrivals from the previous month coupled with a change in taxes. Either way, the large supply in the cash market is likely to continue putting pressure on Chinese crush margins which have been in the red since February. Just yesterday it was reported that a Chinese soybean buyer resold more than 500,000 metric tons of soybeans.

 

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August 07, 2017 | Grain Hedge Insights | Kevin McNew | Views: 246

Crop Progress Report due out Later Today

Grains Higher in Overnight Session

In the overnight session the grains are trading higher with Dec Corn up 3 ¾ cents, Nov Soybeans up 8 ¾ cents and Dec Wheat up 3 ¼ cents. The grains are finding some bargain buying at technically supportive levels after a week of strong selling pressure. The 6-10 day weather outlook is favorable for crops with cooler than normal weather and precipitation expected throughout the majority of the central US.

 

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Key support levels have held at least for the time being as traders anticipate the Crop Conditions report. Following the crop conditions report due out later today, traders will turn their focus to the USDA Supply and Demand report released on Thursday where the USDA will including the first data from field surveys.   

 

According to the commitment of traders reports released on Friday for the week ending August 1st, hedge funds cut their corn futures and options positions by 22,171 contracts to 84,644 contracts. Speculative soybean longs were reduced by 11,090 contracts to 39,795.

 

In the wheat complex speculative long positions held by hedge funds and money managers in Chicago Wheat were reduced by 15,660 contracts last week to 12,190. Kansas City Wheat net long positions shrunk by 6,468 to 54,187 and Minneapolis wheat positions were held mostly unchanged at 10,808 compared to 10,705 the previous week.  

 

Over the weekend two major Chinese soybean buyers resold more than 500,000 metric tons of soybeans. There has been some speculation that the resale of soybean cargoes could have been caused from a tightening of credit. The headline will likely cause some concerns that lackluster Chinese crush margins, congestion at the ports and a tightening of credit all may have an impact on future Chinese demand.    


 

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August 03, 2017 | Grain Hedge Insights | Kevin McNew | Views: 311

Market Traded Lower in the Overnight Session

Midwest Trending Wetter over next 10 Days

The market is trading lower in the overnight session as the weather outlook shows the Midwest trending wetter over the next 10 days with the second half of that forecast favoring showers in the northern Midwest. The forecast also shows a slightly wetter Iowa forecast over the next 10 days. Yesterday, there were some scattered showers that touched North Dakota and North East South Dakota.  

 

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On Wednesday the EIA announced that weekly ethanol output was 1.0 million barrels per day, a decline of 10,000 BPD from the previous week. This is the second time in three weeks that production has fallen below last year's levels. Ethanol stocks also declined, falling 677,000 barrels to 20.85 million barrels. Current ethanol production is running only slightly above last year's levels for the last five weeks which means our current pace is most likely not enough to meet the USDA’s forecast of 5.4 billion bushels of corn used for ethanol. We will keep a close watch on ethanol production in the coming weeks.  

Wheat missed trade expectations in this week's export sales report and was down 71 percent from the previous week. Old crop corn sales were also disappointing, recording a marketing year low and falling 60 percent from last week. New crop corn sales came in on the low side of the trading range. Soybeans met trade expectations for both old and new crop.  

 

Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

145

300-500

Corn - OC

36.7

100-300

Corn - NC

438

400-600

Soybeans - OC

233

100-300

Soybeans - NC

367

250-450

 

 

On Tuesday the Russian agricultural consultancy IKAR said that it increased Russia’s wheat production to 77 million metric tonnes, up from its previous estimate of 74. The consultancy also increased their estimated range of Russian wheat exports by .5 million metric tons.

 

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August 02, 2017 | Grain Hedge Insights | Kevin McNew | Views: 457

Hard Selling Across the Board in Grains Yesterday

Overnight Session Trades Higher

In the overnight session the market traded higher after hard selling across the board in the grain complex yesterday. Yesterday morning’s GFS weather model showed little change in temperature patterns throughout the US but showed slightly drier conditions are expected in Iowa, Illinois and Indiana with probability leaning toward slightly wetter conditions in Minnesota, Missouri and Wisconsin.

      

The Grain Crushings and Co Products report released yesterday showed that corn consumed for alcohol and other was 490 million bushels in June ‘17, down 4 percent from May but up 2 percent YOY. Corn used for fuel alcohol which is the largest line item in the report showed 437 million bushes were used in June down 3 percent from May but up 2 percent from June 2016.

 

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It was announced yesterday that 154.1 million bushels of soybeans were crushed in June which was outside the range of estimates and well above the average analyst guess of 146.9 million bushels in a Reuters poll.

 

FCStone released their August crop survey results which showed corn at 162.8 bushels per acre compared to the July WASDE estimate of 170.7. Their crop survey pegged soybean yield at 47.7 bpa compared to 48 bpa in the latest WASDE report.

Yesterday’s selling pressure drove December Corn to $3.76 ¾ by the close, leaving the June 23rd low of $3.74 unbroken and still likely to provide support. November Soybeans fell sharply yesterday closing the day at $9.70 ½ which is the high side of the consolidation pattern that formed between April 17th and May 17th. In the short term the $9.70 level could provide support for soybeans but the most notable area in the November soybean chart landscape is the gap in price action between June 30th and July 3rd when prices jumped from $9.52 ½ to $9.63 ½. That gap area should provide some support if prices retrace further.  

 

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August 01, 2017 | Grain Hedge Insights | Kevin McNew | Views: 374

Grains Trade Lower in the Overnight Session

Grain Crushings Report Out Today at 2 pm

In the overnight session the grains traded lower after the crop progress report showed soybeans and corn conditions slightly above market expectations. Corn condition was reported at 61% good-to-excellent down one percent from last week. Soybeans condition was 59 percent good-to-excellent up two percent from the previous week. Spring wheat conditions deteriorated last week falling to 31 percent good-to-excellent, down 2 percent from last week.

 

At 2 PM today the USDA will release its Grain Crushings report which gives monthly totals for agricultural products consumed in dry and wet mill production. According to a Reuters poll of six analysts the average trade estimate for soybeans processed in June is for 146.9 million bushels with estimates ranging from 146 million bushels to 148 million bushels. If realized this would be a 7 percent decline from May. The reuters poll also estimated June soyoil stocks to be 2.24 billion pounds.

On July 17th, the NOPA crush report estimated that its members, who account for 95% of US soybean crush, processed 138.074 million bushels of soybeans in June, down from 149.246 million in May. The NOPA crush report also showed that soyoil stocks declined to 1.703 billion pounds, down from 1.749 billion in May.      

 

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Weather forecasts in the 1-5 day time frame continues to look cooler which should be supportive of a crop that often times can deal with heat stress during this time of the year. Precipitation will benefit many growing regions this week with the exception of Iowa, the western Dakotas and Montana. Weather in China’s corn growing regions also looks favorable over the next 10 days with temperatures ranging from 1-3 degrees above normal with abundant precipitation in the forecast.   

 

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July 31, 2017 | Grain Hedge Insights | Kevin McNew | Views: 299

Cooler Temperatures Across the Mid West This Week

Grains Traded Lower in the Overnight Session

In the overnight session the grains traded lower pressured by some weekend rains and a milder weather forecast.

 

USDA reported a sale of 150,000 metric tons of corn for delivery to Columbia for the 17/18 marketing year.

 

Corn traded down 5 1/4 cents, soybeans down 14 cents and wheat down 4 ½ cents. September corn is now approaching support around 3.64 ½ from the low which was back on June 23rd. This support marks the low side of the range that corn has traded since the beginning of June.

 

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The latest weather models show cooler temperatures across the midwest  into the middle of this week. Precipitation is forecast to be normal this week with above average moisture expected in the Texas panhandle, Southern Kansas, Oklahoma and Missouri by the weekend. The Dakotas and Minnesota showed some slight improvement in the precipitation outlook.    

The commitment of traders report released on Friday showed that for the week ending July 25th large speculators cut their net long positions in Corn by 1,434 contracts to 45,746. Wheat speculators also saw net selling by 9,951 contracts to reach a net short position of 31,337. Soybean speculators trimmed their net short position by 11,977 contracts to just 156.

 

The crop conditions report will be released after the market close and the trade is looking for a slight improvement in the good-to-excellent rating in corn, unchanged in soybeans and a decline in spring wheat.  

 

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

July 28, 2017 | Grain Hedge Insights | | Views: 285

Wheat Quality Council Estimates Are In

On Thursday, the International Grains Council cut its 2017-18 global production forecast for corn, wheat and barley. The revisions were made as a result of the dry weather in North America, Europe and Australia. The IGC revised its global corn production down to 1.02 billion metric tons. The revision was primarily due to cutting US production estimates by 5.6 million metric tons and EU production by .7 metric tons. The IGC increased the Brazil 2017-18 corn crop up by 1.5 million metric tons.

 

The IGC also lowered global wheat production estimates by 3 million metric tons to 732 due to a decline in expectations from US, Australia and the EU. The Russian wheat crop was revised three million metric tons higher in their projections to 71 million metric tons.  

 

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The Wheat Quality Council estimated their official Spring wheat yield on Thursday after traveling North Dakota, South Dakota and Minnesota for three days. Spring wheat yields were estimated at 38.1 bushels per acre, down 2.2 bpa from the July 12th USDA estimates of 40.3 bpa. The wheat tour does not estimate total production because it is still early to estimate harvested acres. Abandonment will be a real wild card especially in the western part of the spring wheat region. Crop yields looked good to the east and steadily got worse as the tour moved west. In western North Dakota tour scouts noted that some wheat had already been baled for hay. The Spring wheat tour did not enter Montana which has been in significant drought much of the growing season.

 

The Ministry of France announced on Thursday that tariffs will be raised on beef imports into Japan, a key U.S trading partner. The tariff will increase from 38.5 percent to 50 percent and was automatically triggered after beef imports from all nations and from countries who do not have an economic partnership agreements increase more than 17 percent from the year earlier. Australia which provides a large amount of Japan’s imported beef will be exempt from this tariff because of their existing economic partnership agreement. This is the first time since 2003 that this automatic tariff has been triggered.

 

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July 27, 2017 | Grain Hedge Insights | Kevin McNew | Views: 335

Dollar Feels Pressure after FOMC Statement

Grains Traded Higher in the Overnight Session

In the overnight session the grains traded higher with uncertainty still surrounding the impact of the hot and dry weather. December corn up 3 1/4, November Soybeans up 8 and Chicago Wheat up 5.

 

The EIA ethanol numbers released on Wednesday showed a drop in week over week production by 14 thousand barrels per day to 1.012 million BPD. Weekly ethanol stocks also fell by 608,000 barrels to 21.529 million BPD. To meet the UDSA’s corn used for ethanol projections we will need to see ethanol production pace pick back up and run 3-5% above last year’s levels for the remainder of the marketing year.   

 

The dollar also felt pressure yesterday after the FOMC statement suggested that both overall and core inflation had declined and that the fed will start unwinding the balance sheet “relatively soon”. The language seemed to give traders the impression that there is no increased risk for a rate hike between now and December which will put pressure on the USD.     

 

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Day 2 - Wheat Crop Tour

Spring wheat crops in central northwestern North Dakota were showing the effects of hot and dry conditions and yield prospects were down sharply from a year ago, scouts on the annual crop tour said Wednesday.

 

The early-planted stuff looks the toughest, said Dave Green, executive vice president of the Wheat Quality Council, which runs the tour. Prospects were slightly better for later-planted wheat and crops in northern areas could still benefit from moisture with harvest still a few weeks away.

 

Scouts in west-central ND scouted five spring wheat fields and calculated an average yield of 21.3 bushels per acre. A year ago, scouts on the same route calculated average yields of 61.8 and 52.7 bpa.

 

Scouts on another route in central ND scouted six spring wheat fields and calculated an average yield of 35.8 bpa; last year the average yield calculation was 52.1 to 41.5 bpa. Northwest ND spring wheat fields (three) were scouted and calculated an average yield of 27 bpa; the average durum yield at 45.4 and 52.7 bpa.

Export sales were weaker with new crop wheat down 26 percent, old crop corn down 80 percent and old crop soybeans down 26 percent week over week. Old crop corn sales notched a marketing year low for this week, recording only 92,000 metric tons.     

 

Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

498

 

Corn - OC

92

200-500

Corn - NC

486

200-400

Soybeans - OC

303

100-300

Soybeans - NC

531

300-1,000


 

 

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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