May 18, 2017 | Kevin McNew | Views: 498
May 18, 2017 | Grain Hedge Insights | Kevin McNew | Views: 286

Soybeans Hammered in the Overnight

Decent USDA Weekly Export Sales Report Numbers

Soybeans were hammered overnight as Brazil’s economy was thrown into a tailspin on potential political corruption by the President. In outside markets, US equities continued their slide and crude oil was off in a risk-off start to the day.

 

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Late yesterday news broke that Brazil’s president Temer gave his blessing to pay a potential witness to remain silent in the country's biggest-ever graft probe. If accurate, this could pull Temer into a corruption scandal that has already entangled several of his closest allies and advisors. Leading lawmakers and a third of Temer's cabinet have already been caught up in an investigation of systematic bribery in return for political favors and contracts with state-run enterprises. Investors dumped Brazilian assets in foreign markets after the news broke late in Brazil. The Brazilian Real plunged 7% in overnight trade, which immediately sent US soybean prices down nearly 2%. Brazil farmers have been holding tight to their mammoth soy crop as the Real has climbed nearly 10% since the first of the year. This plunge should lead to a mass selling wave of Brazilian farmers.

 

In other news, overnight Japan bought 80,000 MT of US wheat in its regular tender activity while Canada garnered 35,000 MT of the total 115,000 MT deal. Private analyst Strategie Grains cut its EU wheat estimate by 1.1 MMT to 142.7 MMT. This still would be up 5% from last year’s crop. Likewise, they trimmed their corn estimate by 0.3 MMT to 60.1 MMT. If realized, this would be up 0.3% from last year.

USDA’s weekly export sales were decent this week as the data came in mostly on the high side of analyst expectations. Under normal circumstances this might be a positive stimulus for the market that has struggled with export business, but this will take a backseat to the situation in Brazil. The risk could be substantial to the downside for soybeans, and perhaps even corn.

 

Export Sales-

  

  Actual

Estimated

Wheat - OC

   247

0-200

Wheat - NC

   393

200-400

Corn - OC

   705

500-750

Corn - NC

   168

50-250

Soybeans-OC

   355

200-400

Soybeans-NC

    41

0-200

 

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

May 17, 2017 | Kevin McNew | Views: 451
May 17, 2017 | Grain Hedge Insights | Kevin McNew | Views: 230

US Dollar and Stock Indices were Lower to Start the Day

Grains were Higher in the Overnight Trade Session

Grains were higher overnight with modest gains supported by a US Dollar falling to its lowest level since the November elections.

 

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Overnight, Egypt’s GASC was in the market tendering for wheat although their most recent request called for higher protein wheat which could restrict access to France. The remainder brought in the lowest offer by the US for $185/MT FOB for HRW.

 

Yesterday Lanworth came out with their summer weather forecast, which suggests the Eastern part of the grain belt could be prone to drought. They put the odds of this season’s weather to be near normal to hot/dry. They suggest a strong ridge with a “ring of fire” setting up in the middle of the country. This would potentially set the stage for hot/dry to the East while areas to the upper West like IA/MN would see more moisture. The timing of the event is still unclear but the odds seem to favor June rains giving way to July heat and dry conditions which could potentially have a more pronounced impact on beans versus corn.

The US Dollar and stock indices were lower to start the day as the political firestorm over Trump’s dealings with former FBI Director Comey come to the surface. The US Dollar reached its lowest level since the November elections, which is supportive for grain prices.

 

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

May 16, 2017 | Kevin McNew | Views: 280
May 16, 2017 | Feed & Grain staff | Views: 1363

Experts to Sort out FDA, USDA Regulations at Feed & Grain LIVE

Conference features regulatory updates from the industry’s leading policy experts

Experts to Sort out FDA, USDA Regulations at Feed & Grain LIVE

Find out what two inside-the-beltway experts have learned about the current administration, its impact on regulations affecting the feed and grain industry, and how potential changes will affect you and your business. Attend Feed & Grain LIVE, May 31 – June 2, 2017, at Prairie Meadows Hotel in Altoona, Iowa!

At this important conference you’ll hear from Jess McCluer, vice president, safety and regulatory affairs, National Grain and Feed Association, and Richard Sellers, senior vice president of policy and education for the American Feed Industry Association.

McCluer will explain how recently-appointed Department of Labor Secretary Alexander Acosta might look at OSHA enforcement policies. There are plenty of questions about various potential OSHA rule changes. Find out what McCluer is hearing first-hand in his efforts in Washington.

Sellers, with his decades-long history of advocating for the feed industry and educating feed businesses about industry regulations, will shed light on President Trump’s regulatory philosophy. Both the Veterinary Feed Directive and the Food Safety Modernization Act may see important changes. This is an important update you won’t want to miss!

Register now at: http://live.feedandgrain.com/!   Include code REGUPDATE to save $100 on registration.

(Plus, you’ll find plenty of other valuable sessions to attend, including:

  • A hands-on workshop on mycotoxin testing (limited to 30 attendees)
  • Advances in pelleting technology
  • Written Food Safety Plan panel discussion with NGFA’s David Fairfield, senior vice president, feed services
  • Grain merchandising and emerging market opportunities
  • Finding, developing and keeping talented people in your business
  • And a special general session on managing the “daily crises” of customer service miscues )
May 16, 2017 | Grain Hedge Insights | Kevin McNew | Views: 274

Corn and Wheat Pressured in the Overnight

USDA Reports Flash Sales this Morning for Soybeans

Corn and wheat continued to be pressured overnight while soybeans held on to some minor gains going into the day session.

 

USDA reported a 132,000 MT sale of soybeans to unknown destinations for 2016/17.


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Yesterday saw weak soy crush data released by NOPA for April which helped stall the soy rally that at one point had reached a 10-cent advance. According to NOPA, soy plants crushed 139 MB of soybeans in April, off from 147 for the same month last year and well below trade expectations of 145. Year-to-date crush data is up 0.8% from the same 8-month period last year, but USDA expects crush for the entire year to grow by 2.1%.

 

After the close of trading, USDA crop progress data showed a huge gain in plantings. Corn planted hit 71% vs 47% last week, and now sits 1% above the 5-year average pace for the first time this season. Soybeans also advanced sharply hitting 32% vs 14% last week and on par with the 5-yr average. For wheat, crop conditions slipped to 51% good-to-excellent from 53% last week. Most of the losses occurred in MT, IL & SD.

 

In export markets, foreign prices have generally held firmer as US prices have slipped in the past week. Corn from Argentina FOB is now $9/MT above US prices vs last week at only a $3.8/MT premium to US prices. Wheat vs France was the only major weakening this week as French prices have fallen harder over the past week than US prices.

 

WORLD EXPORT PRICE SPREADS RELATIVE TO US

 

Crop

 Country

  Today

  Last Week

 Last Year

CRN

 ARG

  +$9.0

  +$3.8

+$7.0

CRN

 BRZ

 -$15.1

  -$17.3

-$8.5

CRN

 EUR

 +$5.4

  +$4.7

-$15.1

SBN

 ARG

 -$8.0

  -$10.3

-$1.7

SBN

 BRZ

 +$4.4

  +$0.5

+$8.3

WHT

 ARG

 +$17.2

  +$15.4

+$17.5

WHT

 EUR

 -$16.9

  -$14.2

-$46.5

 

 

 

Export spreads represent a foreign country price minus US price at export destinations, in USD per metric ton.  A higher spread indicates

the foreign price has risen relative to US prices, making the foreign country less competitive and the US more competitive.


 

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

May 15, 2017 | Grain Hedge Insights | Kevin McNew | Views: 300

Corn and Wheat Drift Lower to Start the Week

NOPA Crush Estimates for April to be Released Today

Corn and wheat drifted lower to start the week while soybeans were posting modest gains going into the morning break. In outside markets, crude oil shot higher by $1.50 a barrel while equities and the US Dollar were slightly lower.


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On Friday, Informa economics released new US acreage projections, pegging soybean plantings at 89.7 million acres vs USDA at 89.5, while corn acres were expected to be 89.7 as compared to 90.0 by USDA.

 

Today will bring the release of NOPA crush estimates for April. Traders expect a 145.7 MB crush estimate which would be off from the same month last year at 147.6 MB. The last two months have seen actual crush estimates miss analyst estimates to the downside by 4 MB.

 

Rains over the weekend were mostly confined to the Southeast and Mid-Atlantic region with the rest of the grain belt seeing dry weather to aid in planting progress. However, this week should see rain hitting the Northern Plains and Western Cornbelt with two different systems expected to bring around an inch of rain during each event. Temperatures are expected to be warmer than normal, helping to aid drying between events.

Crude oil futures jumped to a two-week high on Monday after Saudi Arabian and Russian energy ministers in a joint statement said they back a nine-month extension to the current production cuts led by the OPEC members. That would keep current output caps in place through the first quarter of 2018 if agreed to by all parties at the coming May 25 OPEC meeting.


 

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

May 12, 2017 | Grain Hedge Insights | Kevin McNew | Views: 199

Weekly Cash Comments

Weekly Cash Commentary for week ending 05/12/2017

Grains were mostly weaker this week with soybeans losing 8 cents, wheat was off 4 and corn posted a modest two-cent advance.

 

After a stormy previous week that brought widespread rains and freak snow storms, this week’s weather turned more favorable for much of the country. Monday’s planting pace was surprisingly strong in spite of challenging weather with corn planting advancing 13% on the week and hitting the near midway mark of 46%. This week’s weather has been mostly dry in key growing areas, but wetness still plagues E KS, MO, S IL & S IN. There will likely be some replant decisions needing to be made in these areas due to heavy rains. Over the weekend, rains are centered in the SE part of the country up thru the Mid Atlantic but the heart of the grain belt looks dry.

 

 

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

May 12, 2017 | Grain Hedge Insights | Kevin McNew | Views: 224

Expiration of Week 2 Options is Today

Grains Drift in Quiet Trade

Grains drifted in quiet trade heading into Friday’s trade with wheat showing positive gains while corn and beans continued to paint the negative side of the trade ledger.  


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Today is the expiration of week 2 options on July futures. For corn, the time value on premium for an at-the-money 370 put/call is about 1 cent a bushel as the market has zero fear about market movements. With the market at 369.25, the put (OZC2K7 P3.7) is about 1 ¾ and the call (OZC2K3 C3.7) is ¾.

 

The wheat crop in France showed slight improvements after recent rains brought some relief. In its weekly crop report, FranceAgriMer estimated that 76 percent of soft wheat crops were in good or excellent condition as of May 8, compared with 75 percent a week earlier, breaking a run of four weekly declines.

 

Overnight, heavy rains continued to hit SE KS, AR, OK, MO, KY & TN which is a region plagued by wet conditions this planting season. The next 48 hours should see rains in the Southeast and heading up to the Mid Atlantic, but the remainder of the Cornbelt looks dry which should aid planting progress.


 

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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