May 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 270
May 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 277

US Dollar Continues it’s Rally Overnight

Grains were weaker overnight

Grains were weaker overnight as strength in the US dollar continued to weigh on all commodity markets especially crude oil which was off over a $1 a barrel.

 

The US dollar continued its rally overnight and into the morning session, gaining 0.4% overnight and reaching its highest mark since March 23. The Federal Reserve will likely raise interest rates in June if economic data points to stronger second-quarter growth as well as firming inflation and employment, according to minutes from the U.S. central bank's April policy meeting released on Wednesday. That view, expressed by most Fed policymakers at the last policy meeting, suggests the central bank is much closer to lifting rates again than Wall Street expects.

 

This morning, USDA’s export sales report had supportive corn numbers with a good showing on both old- and new-crop deliveries, which beat expectations. Wheat and soybeans were less impressive though still within expectations.

 

WEEKLY EXPORT SALES

                       OC-Act        OC-Exp        NC-Act      NC-Exp

Corn                  1,473       900-1,300         541       100-300

Soybeans              556          300-500         158         50-250

Wheat                  175             0-250         573        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)

May 18, 2016 | Grain Hedge Insights | Kevin McNew | Views: 268
May 18, 2016 | Grain Hedge Insights | Kevin McNew | Views: 278

Grains were Weaker Overnight

US Dollar was Higher

Grains were weaker overnight, led by soybeans. In outside markets, the US dollar was higher while equity futures came under pressure.

 

The dollar rose to a three-week high against the euro and a basket of currencies on Wednesday on renewed expectations that the Federal Reserve could raise interest rates soon.  Stock markets in Europe and Asia weakened on Wednesday in the wake of accelerating U.S. inflation and comments from Federal Reserve officials that rekindled prospects of an interest rate rise within months.

 

Showers are exiting the far eastern Corn Belt currently, and a system later this week has shifted farther to the south. This will allow most of the eastern Corn Belt to remain dry until the latter 1/2 of the 6 to 10 day, with intermittent showers during the balance of the 15-day period resulting in brief interruptions. However, the seeding pace should improve, particularly as warmer weather develops early next week."

 

Showers will still move through the Delta/Southeast on Friday/Saturday, but drier weather will then also aid late fieldwork in these areas until the 11 to 15 day. The wettest 6 to 15 day conditions are expected from the Plains into the southwest Midwest, with extensive rain also occurring in the far S. Plains in the next two days. While the moisture is aiding winter wheat yields during late growth, the active pattern will also hinder maturing wheat in Texas/Oklahoma.

 

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, 2016 | Grain Hedge Insights | Kevin McNew | Views: 322
May 17, 2016 | Grain Hedge Insights | Kevin McNew | Views: 290

Crude Oil Up in the Overnight Session

Grains were mixed with soybeans higher and corn lower.

Grains were mixed overnight with soybeans higher and corn lower. Wheat was nearly unchanged. In outside markets, crude oil was higher but off of its highs at $48.40 while equities and the US dollar were mostly directionless.

 

On Monday, private analyst Informa pegged US corn acres at 93.4 million versus USDA’s forecast of 93.6, while soybean acres were pegged at 83.0 versus 82.2 by USDA. Analysts have been suggesting as much as 2 million more acres of soybeans, so Informa’s number of only 800,000 more acres would be substantially below that.

 

In other news on Monday, USDA’s crop progress report showed a strong pace for corn and soybean plantings.  Corn plantings were 75% completed while soybeans were at 36% completed. The US winter wheat crop was rated at 62% good-to-excellent, on par with last week’s score.

 

Overnight, South Korea's largest feed-maker NOFI issued an international tender to purchase about 65,000 tonnes of corn, an unspecified volume of feed wheat and 7,000 tonnes of soymeal. UkrAgroConsult raised its forecast for Ukraine's 2016 wheat harvest to 21.5 million tonnes from 19.8 million. The consultancy's Yelizaveta Malyshko told Reuters that favourable weather this spring and "ideal" moisture content in soil were the main reason for the improved outlook.

 

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, 2016 | Grain Hedge Insights | Kevin McNew | Views: 330
May 16, 2016 | Grain Hedge Insights | Kevin McNew | Views: 368

Is There a Shift From Corn to Beans?

Grains were Lower in the Overnight

Grains were lower overnight while crude oil continued to reach fresh highs since its low in January.

 

Rains were fairly common over the US grain belt over the weekend as a quarter to a half inch of rain hit most of the key growing regions. After a cold start to the week (record cold for some) temperatures will warm across the Plains, Corn Belt and East and moisture will remain plentiful.  Temperatures are expected to surge to above normal later this week and continue “warm” next week too across the Plains and Corn Belt.

 

A one-day strike at the Rosario grains export hub in Argentina ended on Friday after the government compelled union and company officials to enter into wage negotiations for 15 days, a union leader said. The strike began at midnight local time and ended around noon after the union agreed to the government mandate for a "reconciliation" period to settle the dispute.

 

Soybean prices have floundered in recent sessions as expectations that farmers are switching planting intentions to beans and away from corn. There are expectations the USDA's June 30 acreage report could show a shift of 1-2 million acres from corn into soybeans, compared with the government's March 31 planting intentions report.

 

Crude oil prices are on the upswing to start the trading week as markets shrug off initial negativity in the wake of soft data from China reported over the weekend. China’s domestic oil production dropped 5.6 percent from a year ago to 16.59 million metric tons in April, the steepest slide since November 2011, according to government data released Saturday. The trend is likely to worsen in the months ahead and, along with U.S. production declines, will help re-balance the global oil market later this year.

 

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, 2016 | Grain Hedge Insights | Kevin McNew | Views: 318

Soybeans Lead the Overnight

Oil also continue to climb

Grains were higher overnight with soybeans leading the complex. Oil also continued to climb hitting fresh 6-month highs.

 

Brazil's Senate voted on Thursday to put President Dilma Rousseff on trial in a historic decision brought on by a deep recession and a corruption scandal that will now confront her successor, Vice President Michel Temer.   With Rousseff to be suspended during the Senate trial for allegedly breaking budget rules, the centrist Temer will take the helm of a country. The Brazilian Real is up 12% against the US dollar since March 1 on the potential removal of Rousseff from office.

 

This morning’s export sales from USDA was a real disappointment for soybeans. Combined old- and new-crop sales were 219K MT versus expectations at the low end of 675K. So far for 2016 new-crop soybean sales are at 3.26 MMT versus the same time last year of over 4.4 MMT. This week’s wheat sales were strong, with bold old- and new-crop deliveries besting expectations. At 8 AM CDT USDA announced a flash sales of 210,000 MT of corn to Saudi Arabia for old-crop delivery.

 

Weekly Export Sales

 

                 OC-Act      OC-Exp        NC-Act      NC-Exp

Corn           1,105     900-1,200        150.4     175-325

Soybeans    212.4       350-500            6.9      325-450

Wheat        294.9         50-175        387.9      200-350

 

In crude oil. EIA data on Wednesday pointed to a significant draw-down in US crude stocks. Inventories were off 3.4 million barrels versus expectations of a 0.7 million barrel build.

 

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

May 11, 2016 | Grain Hedge Insights | Kevin McNew | Views: 348

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