March 24, 2017 | Grain Hedge Insights | Kevin McNew | Views: 208

Weekly Cash Comments

Weekly Cash Commentary for week ending 03/24/2017

Grain basis continued to show little upside life this week even with the ongoing slide in futures prices. For the week, spot corn basis across the country managed a 1.3 cent advance while soybean basis was up 0.8 cents a bushel.

 

WEEKLY BASIS CHANGES

 

CORN

SOYBEANS

US AVG

+1.3 C

+0.8 C

PROCESSOR

+1.6 C

+1.8 C

RIVER TERMINALS

-1.3 C

+0.2 C

 

Corn basis found some strength thanks to some modest strength at ethanol plants, which rose 1.6 cents on the week. Ethanol production continues to hold firm and is outpacing last year’s tally by 5%. At river terminals this week, basis levels dipped lower although export pace continues to be good with sales on the week of 1.3 MMT topping market expectations.

 

In soybeans, basis levels showed more upside at processors as crush margins improved this week as bean oil bucked the trend of lower soy and meal prices. River terminal basis was mostly flat but there was some notable weakness at IL river terminals.

 

 

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

March 24, 2017 | Grain Hedge Insights | Kevin McNew | Views: 248

Wheat Took a Break in the Overnight from its Recent Slide

Soybeans Continue to see Mounting Losses

Grains were mixed overnight as wheat took a break from its recent slide and inched higher while soybeans continued to see mounting losses, reaching their lowest mark since October.

 

Overnight, the Taiwan Flour Millers' Association purchased 98,200 MT of milling wheat to be sourced from the US in a tender which closed on Friday. Jordan was also in the market for 50,000 MT of hard red milling wheat. Grain industry lobby Coceral on Friday forecast that soft wheat production in the 28-country European Union would rise to 144.8 MMT this year from 135.1 in 2016.

 

The US weather forecast continues to show good chances of rain in the drought-stricken areas of the Southern Plains. However, the latest model guidance for the 15-day total shows moisture levels that are slightly lower in key states than was previously projected. The bulk of the rain is expected next Wed/Thu and then another system on the following Sat/Sun.

 

 

Brazil continues to have fallout from its meatpacking crisis. The EU has asked Brazil to voluntarily suspend all shipments of meat to its member countries to avoid imposing a ban that would take time to lift. Brazilian meat exports are in a tailspin following a police investigation into corruption involving food-sanitation inspectors and accusations that rotten products were sold. The prospect for weaker feed demand in the country seems very real which could force even more grains in SA to hit the world market.

 

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

March 23, 2017 | Kevin McNew | Views: 289
March 23, 2017 | Grain Hedge Insights | Kevin McNew | Views: 204

Weekly Export Sales Were Supportive for Old Crop Corn and Soybeans

Grains Continue Lower in the Overnight

Grains continued to bleed lower overnight while in outside markets crude oil, equities and the US dollar were on the positive side of the ledger for this first time this week with limited gains.

 

Russia's SovEcon agriculture consultancy said on Thursday it had downgraded its forecast for Russia's 2017 grain crop to 109.5 MMT from a previous forecast of 112.5 MMT. SovEcon also sees the country's wheat crop at 62.5 MMT in 2017 compared with 73.3 MMT in 2016.

 

Brazil soy yields are reported to be very good but farmer sales are said to be slow. Palm Oil continued to be weaker overnight adding to losses early in the week. China’s soybean imports in February were at 7.5 MMT, down 4% from the same month last year. Argentina corn harvest is said to be speeding along and port deliveries by truck are said to be record large.

Weekly export sales were supportive for old-crop corn and soybeans. Overnight, Japan bought 59,000 MT of US wheat in their normal tender purchase of 117,689 MT of food wheat. The remainder will be supplied by Canada and Australia.

 

Export Sales-

 

Actual

  Estimated

Wheat - OC

  418

  250-450

Wheat - NC

  149

  50-250

Corn - OC

 1,347

  900-1,200

Corn - NC

  127

  100-300

Soybeans-OC

  738

  350-550

Soybeans-NC  

   80

  100-300

 

 

Financial markets will closely watch the Thursday vote in the US House on the Republican led healthcare law. A failure to move this policy forward, would likely signal a bleak outlook on financial policy changes like taxes and infrastructure that market participants have been betting on.

 

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

March 22, 2017 | Kevin McNew | Views: 193
March 22, 2017 | Grain Hedge Insights | Kevin McNew | Views: 139

US Equities and the Dollar Index Come Under Selling Pressure

Rain is still in the cards for the coming weeks over the Southern Plains.

Grains inched lower overnight with KC wheat continue to take the leader position on the downside. In outside markets, crude oil was pushing into new lows, off 60-cents a barrel and the US dollar and equities were pointing slightly lower following yesterday’s sharp slide.

 

USDA reported a 120,-000 MT of HRW wheat was sold to Saudi Arabia and 120,000 MT of soybeans were sold to China.

 

Rains is still in the weather cards for the coming weeks over the Southern Plains. However, overnight model guidance shows less rainfall (vs. yesterday) through month's end across the Texas and Oklahoma US wheat crop areas, but maintains near to above widespread 1.0 inch totals across much of Kansas.

 

In China, soy crush margins continue to come under pressure with crush margins dipping to their lowest level in 18 months. Rapid expansion of the soy crush margin in the Fall of 2016 helped push a buying spree of US soybeans, but with China’s margins under pressure and South America competition, it could be a dismal period of US export activity.

 

 

Yesterday, US equities and the dollar index came under selling pressure. In part, the dollar continued its lower trend on the Fed’s announcement they would take a less hawkish approach to future rate hikes than investors had thought. Furthermore, stocks are seeing pressure in auto- and consumer-sensitive areas suggesting the economy may not be as strong as expected. Also, investors will be watching the political theater around Thursday's House vote to repeal Obamacare, as these battles are threatening to push out tax reform and more stimulus well into the end of 2017 or 2018. A defeat in Thursday's vote would send a clear signal that the rest of Trump's agenda — taxes, the budget, and infrastructure — could be on shaky ground.

 

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

March 21, 2017 | Kevin McNew | Views: 169
March 21, 2017 | Tech Talk | Charlie Trauger | Views: 2055

How Old is That Mission Critical Software That You Are Using?

It's never an easy decision to update old software but companies will reach a point where the future risk outweigh the present pain

How Old is That Mission Critical Software That You Are Using?

The issues that several of the large airlines have had recently caught my eye when they experienced delays, all due to software. The primary reason for the issues was after an interruption, the old systems had issues reconnecting to the newer systems. When the power goes out, or some other event, it can take hours, sometimes days to get everything communicating again. Kind of like my farm when the duct tape or baling wire breaks!

If, or more likely when you have a software related failure, have you tested your backup system? What if that does not work, what is your plan then? So who gets the blame? IT? It really needs to be on the radar of top management, but in many cases, it is not.

There are many reasons we end up keeping and maintaining old software applications. Mergers, acquisitions, as well as a just plain old lack of time and capital to upgrade. Not to mention the downtime to install, test, and learn new applications as that creates an immediate pain before you solve a future pain. Never an easy task or decision.

One thing to look at is what is the cost to support it today?  What is the loss of business from any disruptions in older software applications? Inconvenience? Total disaster, or perhaps frustrated employees and customers. It might be worth taking a hard look at where your business is in regards to this. Software can fail due to hackers, and lack of redundancy, but more likely human prone issues prevail.

Not that the Government might be the best comparison, but 75% of Fed IT spending is on operations and maintenance of old technology – just keeping the lights on! www.gao.fov/products/GAO-16-468

What is your company spending on just keeping your old systems running? This really needs to be decisions made at the board level.

It might be a good idea for you to take a good assessment of all the systems in your business and perhaps test out some of your back-ups but taking them offline (during a slow time) and see if what you think you have really works.

There is some good news – SaaS solutions for many business related software applications are available now. Many are low cost and take the burden off the company for ongoing maintenance including upgrades, back-ups, etc. 

At least if something happens at your business, you probably have much more comfortable places to wait out the problem than in an airport or on a plane!


Charlie Trauger is Global Director of Agriculture for GlobalView Software, Inc. of Chicago IL.  He received his Bachelor of Science degree from the University of Nebraska and also completed course work in computer science from Metropolitan Technical College in Omaha, NE.  Charlie was raised on a row crop and cow calf operation in Nebraska and is still involved in the family business.  Charlie has spent over 25 years in the agricultural software and data business and recently relocated back to the family farm in Nebraska. Follow him on Twitter @charlietraug

March 21, 2017 | Grain Hedge Insights | Kevin McNew | Views: 239

USDA State Offices Release Winter Wheat Condition Scores

Grains Continue to Sink Lower

Grains continued to sink lower following Monday’s sharp sell-off in wheat. In outside markets, the US Dollar index fell below 100 for the first time since early February while crude oil was trying to find stability in the $49 a barrel territory.

 

After the market closed on Monday, USDA state offices in OK/KS/TX released their winter wheat crop condition scores which showed a mostly deteriorating crop. Kansas slipped from 42% good-to-excellent last week to 40% this week, while OK saw a similar deterioration from 40% to 38% over the past week. TX slipped from 35% last week to 34% this week. While these ratings are substantially below last year’s ratings at this time of year (47% to 63%), they are only slightly off of the long-term averages for the 3-state region, generally around 40%.

 

Japan's Ministry of Agriculture is seeking to buy a total of 117,689 tonnes of food quality wheat from the United States, Canada and Australia in a regular tender that will close late on Thursday.

Yesterday, Agroconsult a private analyst pegged Brazil’s soybean crop at 111 MMT up from their previous forecast of 107.8 MMT and above USDA’s estimate of 108.

 

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

March 20, 2017 | Kevin McNew | Views: 187

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