October 13, 2017 | Grain Hedge Insights | Kevin McNew | Views: 577

Soybeans Advance Over News from USDA

Chicago Soybean Futures Rose on Friday

In the overnight session, Dec Corn was up 1.5 cents, Nov Soybeans were up 3.75 cents and Dec Wheat was up a little over 1 cent.

 

Chicago soybean futures rose on Friday, a day after the US Department of Agriculture (USDA) unexpectedly cut its forecast of the US soy crop. The USDA report put out a bullish yield number for the US crop of 49.5 bushels an acre, down from last month’s forecast of 49.9 bushels. Corn was weakened by the USDA’s expectation of a larger US crop, while wheat was underpinned by improving export prospects for US supplies.

 

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China, the world’s top soybean buyer, imported 8.1 million tonnes of the oilseed in September, up 12.7 percent on a year ago, after crushers saw margins improve over the summer and anticipated healthy demand for soymeal from hog farms. The September figure brings imports for the 2016/17 crop year, running from October to September, to 93.5 million tonnes, well above the prior year’s 83.2 million, and another record, according to Reuters calculations.

 

Net Weekly Export Sales-

 

Actual

Estimated

Wheat

175

300-500

Corn

1,593

800-1,100

Soybeans

1,747

900-1,200

 

 

Wheat net sales of 175,000 metric tons for delivery in marketing year 2017/18 were down 65 percent from the previous week. Corn net sales of 1,593,200 MT for 2017/18 were reported; Soybean net sales of 1,747,300 MT for 2017/18 were reported.

 

US consumer prices recorded their biggest increase in eight months in September as gasoline prices soared in the wake of hurricane-related production disruptions at oil refineries in the Gulf Coast area, but underlying inflation remained muted. The increase was the largest since June 2009 and followed a 6.3 percent advance in August. The Labor Department said Harvey was reported to have impacted refinery capacity in the Gulf Coast.

 

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October 12, 2017 | Grain Hedge Insights | Kevin McNew | Views: 516

USDA Supply and Demand Report Due Out Today at 11 am CST

Grains Mostly Stable in the Overnight Session

Grains mostly stable in the overnight session with Corn unchanged, Nov Soybeans up 2.5 cents and Dec Wheat down three-quarters of a cent.

 

Exporters sell 120,000 MT of Corn for delivery to Mexico during the 2017/2018 marketing year-USDA

 

Whenever the US Department of Agriculture updates supply and demand outlooks, adjustments to the US corn and soybean production typically steal the spotlight from other items on the global balance sheets at this time of year. But, since the market expects marginal changes to these usual favorites, elements outside the US-particularly in wheat-may be the ones moving the world balance sheets this month. -states an analyst from Reuters

 

The US Department of Agriculture will release its monthly supply and demand estimates along with the US crop production report at 11 am CST. Analysts predict on average that the US Corn and Soybean harvests will each rise by fractions of a percent.

 

At the world level, the trade expects USDA to slightly trim 2017/2018 global ending stocks for wheat, corn and soybeans, the latter to the greatest degree at 1 percent. There could be some opposing movement in the grains, however, as adverse weather may have hurt Southern Hemispheric wheat crops. But losses could be offset with a potential supply expansion, especially in India, and China’s massive inventory always has the power to swing the wheat and corn balances. Although adjustments to US corn supply are expected to be minor, possible tweaks on the demand side could prove more influential to domestic stocks. -Reuters


 

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China on Thursday increased the forecast for its deficit in corn supply in the 2017/2018 crop year to 4.31 million tonnes from the 890,000 tonnes predicted last month, stoked by lower-than expected output and higher anticipated demand. Corn output is expected to drop to 210.1 million tonnes versus last month’s forecast of 212.48 million tonnes, the agriculture ministry said, adding that less land had been planted with corn than earlier thought following reduced government support.

In the weather, rains return this weekend, slowing Midwest corn/soy harvest; however, drier pattern next week aids recovery. Plains hard red winter wheat seeding improving with drier pattern next 10 days, but brief rains early in weekend. Rains expected to return in 11-15 day, slowing Midwest corn/soy harvest and Plains hard red winter wheat seeding.


 

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October 11, 2017 | Grain Hedge Insights | Kevin McNew | Views: 422

Grains Continue to Inch Lower in the Overnight Session

USDA Supply and Demand Report Out Tomorrow

Grains continued to inch lower overnight with corn down 1, beans off fractionally and wheat down 2.

 

USDA reported 264,000 MT of soybeans sold to China, 132,000 MT to unknown destinations. They also reported a 150,000 MT of corn to Mexico and 104,202 MT of Hard Red Winter Wheat to Mexico.

 

Yesterday after the market closed USDA released their crop progress report. The soybean crop was at 36% harvested up from 22% last week but behind the 5-year average pace of 43%. Meanwhile, corn gained little ground going from 17% last week to 22% this week, and well below the 37% normal pace for this time of year.

 

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Tomorrow will bring fresh input from USDA on the supply and demand situation. Traders look for fractionally higher production figures in the US and a slight cut to ending stocks thanks to smaller than expected old-crop stocks from USDA’s September Quarterly Stocks report.

 

Brazilian farmers will likely produce a smaller amount of corn and soy in the 2017/18 season due to less favorable weather than the prior crop year, food supply and statistics agency Conab said on Tuesday. In its first forecast for the 2017/18 crop, Conab estimated Brazilian grain production at between 224.1 million tonnes and 228.2 million tonnes, compared with 238.5 million tonnes in the prior cycle. The lower end of the range would represent a 6 percent drop in output. "The highly favorable climate conditions that contributed to a record grain output last season are unlikely to be repeated," Conab said in a statement.

 

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October 10, 2017 | Grain Hedge Insights | Kevin McNew | Views: 513

Grains Continue to Flounder in the Overnight Session

Today USDA Reports Export Inspections

Grains continued to flounder overnight with corn and wheat dipping further into negative territory while beans put on a 4-cent going into the break.  

 

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Today will bring USDA reports on export inspections and crop progress as Monday’s Columbus Day holiday delayed the reports. Weather yesterday was mostly dry with the exception being some rains showers in MO/IL. Harvest progress is expected to show more advancement for soybeans than corn over the last week.

 

France's farm ministry raised its forecasts for the country's 2017 corn and wheat crops. The ministry pegged the corn crop at 13.0 MMT from 12.75 million last month, putting the crop 11.4 percent above last year's level. Soft wheat output was increased slightly to 37.9 MMT from 37.8 last month. This put the 2017 crop up 37.7 percent compared with weather-hit 2016 output and on course to be the third largest on record, the ministry said.


 

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October 09, 2017 | Grain Hedge Insights | Kevin McNew | Views: 521

Wheat and Soybeans in Negative Territory after Overnight Session

Tropical Storm Nate Makes Landfall on Saturday

Sunday night saw renewed buying enthusiasm on the trade’s open but that quickly faded heading into the morning dawn. Going into the break, corn was struggling to hold on to a slim advance while wheat and soybeans were in negative territory.

 

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Tropical storm Nate made landfall in LA/MS Saturday and quickly raced to the Northeast. It brought rains of 3 to 5 inches in the Mississippi Delta and by late weekend had hit the Ohio River Valley and Mid Atlantic with some limited showers. It is not expected to bring much crop production issues to the region.

 

The WCB and US Plains saw rain over the weekend. Eastern Nebraska and central Kansas through much of Iowa to central and western Wisconsin saw 1.00 to 2.00 inches and local totals of 2.00 to 3.00 inches resulted. Rain will return to the northwestern Corn Belt Friday into Monday, Oct. 16, with amounts of 0.50 to 1.50 inches and local totals over 2.00 inches possible from Nebraska to Wisconsin and Minnesota

Brazil soybean planting on Friday reached 5.6 percent of the total forecast area, according to consultancy Safras & Mercado, well below the 10.4 percent seen at this time last year as dry weather conditions for most of September delayed field work. Seeding was in line with a five-year average of 5.3 percent for this time of the year in Brazil. The dry areas of Mato Grosso should see limited moisture in the next ten days.

 

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October 06, 2017 | Grain Hedge Insights | Kevin McNew | Views: 496

Weekly Cash Comments

Weekly Cash Commentary for week ending 10/06/2017

Grain basis had extreme bouts of volatility this week driven in part by a spurt in harvest progress as well as low river levels which sent barge freight shooting to 3-year highs. But, by the end of the week the meteoric rise in barge costs reversed course giving way to basis levels to return to a more normal state. On the week, corn basis was unchanged while soybean basis was off 2 cents.

 

For corn, the upper Midwest and WCB regions continue to be slow to harvest which has given some limited life on basis and a few buyers occasionally popping quick-ship premiums. This week saw another ethanol plant in NW IA put a premium to their basis boosting it 7 cents a bushel. In Illinois & Indiana as well some corn plants there also found the need to push their basis higher by 10 cents.  While these few isolated buyers bid up their basis, this was against a broader backdrop of weakness or steady basis for much of the remaining corn processors. In the southern Plains, basis levels have been holding firm as strong feed demand and a mediocre crop has made for some early season premiums existing in the marketplace for OK feed buyers.

In the soybean market, crush plants were mostly under pressure this week with a loss of 4 cents a bushel as a group. However about 25% of the plants saw 5 to 15 cent losses on the week as there were virtually no quick-ship premiums to be found. For river terminals, after the dust settled from the barge freight gyrations on the week the average river basis was mostly unchanged. But this masks significant losses in areas on the lower MS River that ended the week with double-digit drops.

 

With big crops on the way to market and large carry-out from the old-crop 2016 marketing year basis levels seem likely to face more pressure ahead. Crop storage space will be at a significant premium this year making on-farm storage an attractive marketing tool to capture better basis levels into late 2017 early 2018. The average carry from now until January across all grain buyers is 18 cents a bushel for corn and 22 cents a bushel for soybeans.

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October 06, 2017 | Grain Hedge Insights | Kevin McNew | Views: 521

Tropical Storm Nate Closing Down Gulf Oil and Natural Gas Platforms

Grains Mostly Unchanged in the Overnight Session

Grains mostly unchanged in the overnight session with Dec Corn up ¼ of a cent, Nov Soybeans down 1 cent and Dec Wheat down ½ cent. Chicago Corn and Soybean futures in 2017 have been confined to the smallest ranges during the US growing season in over a decade as the world continues to bang out bumper crops with minimal interruption.


 

Exporters sell 195,000 metric tons of Corn for delivery to unknown destinations during the 2017/2018 marketing year. -USDA

 

Rains from tropical Storm Nate farther east Sunday/Monday, slow cotton/soy harvest in mainly the E Delta/Tennessee Valley. Periodic rain events throughout next 2 weeks keep Central Midwest corn/soy harvest slow at times; damage risk is low. Plains showers are more limited after today; threatening only minor wheat seeding delays through mid-October.

 

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French farmers had harvested 15 percent of this year’s grain maize crop by October 2, up from 5 percent a week earlier. The harvest was running ahead of the pace seen last year when 9 percent of the crop had been gathered by the same date said France AgriMer in the weekly update.

 

The Dollar rose to its strongest in 10 weeks on Friday and short-dated US Treasury yields climbed to a nine-year high after data showing the largest gain in US wages since December 2016 bolstered bets on an interest rate hike by year-end. US two-year yields hit their highest since October 2008 at 1.52 percent as US bonds led a sell-off in world bond markets. The dollar index (which measures the greenback against a basket of major currencies) climbed to 94.267, its highest since late July.

Oil and natural gas operators began evacuating staff and halting production at US Gulf of Mexico platforms on Thursday ahead of Tropical Storm Nate, the second storm in as many months to rattle the Gulf Coast energy corridor. Nate, which has killed at least 10 people in Costa Rica and Nicaragua and caused intense rainfall, is forecast to scrape Honduras and Mexico, enter the Gulf and strengthen into a hurricane before making landfall this weekend in Louisiana, near several major refineries.
 

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October 05, 2017 | Grain Hedge Insights | Kevin McNew | Views: 490

Better Than Expected Weekly Export Sales for Corn This Week

Grains Modestly Higher in the Night Trade

Grains were modestly higher in the night trade with corn up 2, soybeans up 4 and wheat posting a 1-cent advance.

 

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The EU increased its estimate of 2017/18 usable soft wheat production in the European Union by 1 MMT to 140.4. That’s up from last year’s 133.7 MMT. For corn, they pegged the crop at 59.1 MMT slightly below last season’s 60.8.

 

Soybeans are finding modest support as rains are expected to slow the US harvest. Dry Spring planting in Brazil is also supporting the market.  Brazilian oilseeds industry group, Abiove, estimated the nation's soybean output at 108.5 million tonnes in the 2017/18 season, down from a record 113.8 million tonnes in the previous crop cycle. Longer term traders are considering the implications of a La Nina weather event which appears to be a more likely outcome in the next few months. This tends to be associated with dry weather in Argentina.

This morning’s export sales from USDA showed better than expected sales for corn on the week while wheat and soybeans were at the high end of expectations. Year-to-date sales for corn and beans continue to significantly lag last year’s pace with corn sales 40% lower than the sales achieved at this point last year while soybean sales are 18% lower. USDA for the year expects corn sales to be 20% lower while soybean sales are expected to be 4% higher.

 

Weekly Export Sales-

 

Actual

Estimated

Wheat

492

300-500

Corn

814

500-700

Soybeans

1,016

1,000-1,300

 

 

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October 04, 2017 | Grain Hedge Insights | Kevin McNew | Views: 355

Dec Corn Down 1 Cent and Nov Soybeans Unchanged in The Overnight Session

Forecast To Clear Up Favoring Harvest in the Next 6 to 10 Days

In the overnight session the grains were mixed with December corn down 1 cent, November soybeans unchanged and December wheat down 2 ½ cents. Precipitation is expected to pass back over the Midwest from Thursday through Saturday which should continue to slow harvest pace. The forecast clears up favoring harvest in the 6-10 and 11-16 day precipitation forecasts.  

 

According to a Reuters article published this morning China’s soybean imports from the United States are expected to be delayed for at least two weeks as exporters struggle to find soybeans that meet quality specifications. Quality has been a huge challenge because early harvested soybeans are sourced out of the Mississippi Delta which suffered crop damage from the recent Hurricanes. The scarcity of soybeans that meet quality specs in the Gulf region has caused delays at the U.S. Gulf shipping terminals as waiting times have grown to 10-12 days, which is above the usual 5 days during this time of year. This situation is made worse by the low water levels along the Mississippi and delays in barge traffic which have driven barge rates sharply higher.  

 

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Recent precipitation has aided soil moisture in 80 percent of Brazil’s corn and soybean planting areas. The slow transition out of the dry season had slowed initial planting pace, but recent moisture has helped the situation. The next 10 days show little signs of moisture and any precipitation will be isolated to the southern regions of Brazil through the middle of the month.

 

Egypts GASC announced this morning that they purchased 180,000 metric tons of Russian wheat.


 

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October 03, 2017 | Grain Hedge Insights | Kevin McNew | Views: 648

Ohio River Near Brockport IL Closed to Navigation

Grains Were Mixed in the Overnight Session

In the overnight session the grains were mixed with December corn down 1 ¼ cents, November soybeans down 2 ¼ a cents and December wheat up 1 cent. Rains are slowing harvest in the Northwestern Midwest early this week and are expected to slow harvest again between Thursday and Saturday.

 

Harvest pace for corn is moving slower than expected with only 17 percent complete compared to average expectations of 21 percent and a four year average of 26 percent during this time of year. Soybean harvest is also behind pace with only 22 percent harvested which missed expectations of 25 percent. Soybean harvest over the last four years averages 26 percent complete this week.

 

Corn ratings improved to 63 percent rated good-to-excellent in this week’s Crop Progress report, which was above expectations of 61 percent. Soybean conditions held steady at 60 percent of the crop rated good-to-excellent.

 

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The USDA announced that 151.6 million bushels of soybeans were crushed in August which was slightly below trade estimates of 152.3 million bushels. This brings total soybean crushings for the 16-17 marketing year to 1.899 billion bushels which is above the USDA’s forecast in the latest WASDE report of 1.895 billion bushels. Soybean oil stocks at the end of August were at 1.81 billion pounds which was below analyst expectations of 1.887 billion pounds. The USDA also reported that corn used for ethanol in August was 481 million bushels which was up from the previous month which reported 454.8 million bushels used.

 

Yesterday, it was announced that the Ohio River was closed to navigation near Brockport, Illinois after an equipment failure leaving roughly 89 vessels waiting to pass. It is unclear how long it will take to resolve the issue. This will continue to put pressure on grain basis which has already been pressured along the river as lower water levels have slowed the movement of freight.
 

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