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March 17, 2016 | Grain Hedge Insights | Kevin McNew | Views: 229

Grains Find Strength in the Overnight

US Dollar Continues to come under Pressure

Grains found strength overnight with soybeans eclipsing the psychological $9 mark for the first time since December. Outside markets were mixed as the US dollar continued to come under pressure while crude oil added to its gains from Wednesday.

 

Grains continue to see large short positions by managed money, even as this rally has picked up some modest steam.  In corn, spec funds held a record large short position on March 8 of 265,000 contracts, but even with this rally, short positions still likely hover around 245,000, leading to more room to run as we get closer to key acreage report data at the end of the month (watch GrainTV).

 

This morning, USDA’s weekly export sales were also supportive for soybeans and corn. Old-crop corn sales exceeded expectations coming in at 1.2 MMT while soybeans saw old-crop sales at the high end of expectations with 623,700 MT while new-crop sales came in well above expectations at 235,100 MT.

 

                                OC Actual             OC Expected           NC Actual          NC Expected

Corn                             1,227                  700-1,100                  61.4                 0-150

Soybeans                      623.7                    400-700                  235.1                25-75

Wheat                          212.9                    250-450                  159.3                50-100

 

In outside markets, the Fed’s announcement yesterday that the course on interest rate policies for 2016 would likely lead to 2 interest rate hikes instead of 3 sent the US dollar lower. Since the announcement, the US dollar index has plunged 2% and is at its lowest level since mid-October. Crude oil was buoyed yesterday as EIA crude stocks came in below expectations with only a 1.3 million barrel build in inventories versus a 3.4 million build that was expected.

 

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

March 16, 2016 | Grain Hedge Insights | Kevin McNew | Views: 542
March 15, 2016 | Grain Hedge Insights | | Views: 480
March 15, 2016 | Grain Hedge Insights | Kevin McNew | Views: 235

Grains were Lower in Overnight Trade

Grains were lower in overnight trade while crude oil continued to sell off after yesterday’s $1 a barrel slide

Grains were lower in overnight trade while crude oil continued to sell off after yesterday’s $1 a barrel slide.

 

Winter wheat ratings from select states showed steady ratings to improved conditions in Kansas, Oklahoma and Texas. Kansas winter wheat was rated 56 percent good to excellent, unchanged from the previous week. USDA said 6 percent of the crop was jointing, compared with the five-year average of 2 percent. Oklahoma winter wheat was rated 67 percent good to excellent, compared with 66 percent the previous week. USDA said 10 percent of the Oklahoma crop was jointing, compared with 14 percent a year ago and the five-year average of 24 percent. Texas winter wheat was rated 46 percent good to excellent, up from 42 percent in the previous week.

 

In overnight news, Iraq bought 100,000 MT of wheat from Canada, while Syria is using loaned money from Iran to also buy wheat.

 

NOPA's Feb crush report is due at 11 a.m. CDT. The average Feb crush estimate among analysts surveyed by Reuters was 139.942 million bushels; range 136.1 million -144.0 million bushels, median 139.300 million.

 

Crude oil came under more pressure overnight as a meeting proposed by Russia and Saudi Arabia to discuss output limits has been pushed back to April from March 20th after signs some key producing nations do not support the move. Overnight, the Bank of Japan announced it was keeping the reserves deposit rate at minus 0.1%. Stocks are also waiting on a U.S. Federal Reserve interest-rate decision due Wednesday. Economists largely expect the central bank to hold rates steady.

 

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

March 14, 2016 | Grain Hedge Insights | Kevin McNew | Views: 484
March 14, 2016 | Grain Hedge Insights | Kevin McNew | Views: 273

Corn and Wheat Higher in Overnight Session

Crude oil was off sharply with equity futures also sinking in the overnight trade session.

Grains were mixed with corn and wheat higher in overnight trade, while soybeans were slightly weaker. Crude oil was off sharply with equity futures also sinking in overnight trade. The US dollar was higher trying to recover from last week’s sharp sell-off.

 

Corn found strength going into the new week after Friday’s CFTC report showed funds added to their short position, creating a record large position of 265,394 contracts in managed money. In wheat, they bought back 15,000 contracts on the week, but are still just off last week’s record large short position.

 

Over the weekend, hundreds of thousands of Brazilians flooded the streets on Sunday in the biggest ever protests calling for President Dilma Rousseff's removal on corruption ties, reflecting rising popular anger that could encourage Congress to impeach the leftist leader. The Brazilian Real and stock markets there have climbed on hopes a new regime would be instituted.

 

In wheat, the weather in the Plains is expected to get cold and potentially hit a hard freeze as far south as NW TX, the OK Panhandle and N Central KS across portions next weekend. By early next week, more cold and snow is expected in Westerns KS/OK & TX. Precipitation over the weekend continued to be heavy in the Delta South, while the Eastern Plains and Central Texas got some welcomed rain. The heart of the HRW belt however, saw little if any precipitation.

 

Oil prices were under pressure to start the week. Iran indicated over the weekend that it wouldn't be interested in attending production freeze talks until it has raised output to over four million barrels per day.

 

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

March 11, 2016 | Grain Hedge Insights | Kevin McNew | Views: 637
March 11, 2016 | Grain Hedge Insights | Kevin McNew | Views: 298

Grains Continue their Rally Overnight

The US Dollar also firmed after yesterday's steep slide with S&P futures and crude also finding strength

Grains continued their rally overnight with soybeans leading the complex higher on a 4-cent advance reaching its highest mark since December. The US dollar also firmed after yesterday’s steep slide with S&P futures and crude oil also finding strength in early trade.


Brazilian soybean export premiums surged over the past week even as the lineup of vessels waiting to load soybeans at local ports swelled, raising demurrage costs as the harvest peaks, shipping agents and traders said on Thursday.  Prompt export premiums increased to 38/41 cents/bushel (buy/sell) over May futures in Chicago, from 24/28 cnt/bu a week ago, price discovery agency Certo said on Thursday. The increase in spot free onboard export prices was similarly reflected in later deliveries until August.


SRW acres across the delta and mid-south have had 10 inches of rain over a broad area this week. Some areas have had much more. This opens the door to another poor quality SRW crop but also puts some delays in corn planting in these states. The hard wheat states have a cold weather threat that starts to show in longer term forecast near the end of March. The weather to date has pushed wheat well ahead of normal development so this timing could damage wheat if the forecast comes true.


Corn had solid exports on Thursday coming in at the high end of expectations. As the US dollar continues to come under pressure in recent months, this sets the stage for a more competitive position for US exports, which should be especially beneficial to wheat and corn.

 

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

March 10, 2016 | Grain Hedge Insights | Kevin McNew | Views: 575
March 10, 2016 | Grain Hedge Insights | Kevin McNew | Views: 324

Grains Were Modestly Lower Overnight Following A Lackluster USDA Report

Weather continues to be an issue in the Plains wheat area as the latest models show a mostly dry bias.

Grains Were Modestly Lower Overnight Following A Lackluster USDA Report

Grains were modestly lower overnight following yesterday’s lackluster USDA supply and demand report. In outside markets, equity futures were higher as S&P futures took a run at the 2,000 mark again while crude oil was modestly lower, but managed to come back from steeper losses in the night session.

 

Yesterday’s USDA report showed few changes to the supply and demand tables. US corn and wheat carryout was unchanged from February after traders had been expecting an increase in stocks on weaker exports. Soybean carryout was higher thanks to a 10 MB decrease in domestic crush. In the global situation, India’s wheat crop was reduced 2.5 MMT which brought world carryout down more than expected, while USDA kept corn and soybean production unchanged for both Brazil and South America. After the close yesterday, the Rosario Grain Exchanged bumped up its forecast for Argentina’s soybean crop to 59 MMT and 24.5 MMT for corn. USDA has the crops there pegged at 58.5 and 27.0, respectively.

 

Weather continues to be an issue in the Plains wheat area as the latest models show a mostly dry bias. The forecast model run continues to suggest restricted precipitation in hard red winter wheat county over the next week to ten days which leaves a small amount of concern about the long range outlook. There is some chance of precipitation March 17-24, but it appears to be fairly light. Meanwhile flooding rain will continue into Friday in the Delta and in a part of the lowermost Midwest. Follow up precipitation during mid- to late-week next week will likely aggravate the situation. A prolonged period of dry weather will be needed before spring fieldwork can resume. Some replanting of early corn will be needed and a small portion of wheat produced in the Delta will be damaged by this week’s flooding rain.

 

Oil prices dipped on Thursday after U.S. crude hit 2016 highs the day before and Brent shot back over $40 per barrel, with analysts warning that larger gains would be unwarranted as a global glut continues to outweigh strong demand.  Expectations of more stimulus from the European Central Bank (ECB) this week, which would strengthen the dollar against the euro and potentially hamper dollar-traded oil imports, also weighed on markets. "The ECB will cut deposit rates by 20 bps (basis points) and extend its bond buying program by one year. This could be bullish for the dollar and bearish for oil," French bank Societe Generale said.

 

WEEKLY EXPORT SALES

 

                         Actual         Expected

Corn                1,192.3         800-1,200

Soybeans            478.4            400-700

Wheat                433.5            200-500

 

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

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