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February 17, 2016 | Grain Hedge Insights | Kevin McNew | Views: 563
February 17, 2016 | Grain Hedge Insights | Kevin McNew | Views: 248

Grains Drift Lower in the Overnight

Outside markets S&P futures and crude posted positive gains.

Grains drifted lower overnight following Tuesday’s rally in prices, while in outside markets S&P futures and crude posted positive gains.

 

On Tuesday, NOPA crush figures for January showed a significant curtailing in soybean crush. According to NOPA, January soybean crushings were only 150.45 MB versus trade expectations of 155.26 MB and a December estimate of 157.71. Although soybeans sold off on that news, they quickly recovered on the day to close higher. Short-term support comes from Brazil as export loadings of soybeans and corn were double that of a year ago as rains delayed shipments, particularly for Paranagua.

 

For wheat, traders continue to monitor the situation in Egypt. The country's agricultural quarantine authority has rejected a shipment of Canadian wheat, saying it contained traces of the fungus ergot, a trade source said as well as official documents obtained by Reuters showed. The move by the quarantine authority is the latest in a series of rejections, which have caused serious concerns over Egypt's tough new quality rules and disrupted the country's massive wheat imports. Russian wheat export prices fell by $2 a MT last week, hit by concerns about future supply contracts to Egypt.

 

All eyes are on the oil market following yesterday’s announcement that Saudi Arabia, Russia, Venezuela and Qatar reached a deal to freeze crude output at January levels. They now go to Tehran to try and barter a deal with Iran. “Asking Iran to freeze its oil production level is illogical... when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices. How can they expect Iran to cooperate now and pay the price?” That’s Iran’s OPEC envoy Mehdi Asali, quoted in the Iranian newspaper Shargh. Iran has said it would keep pumping until it hits pre-sanction levels.

 

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

February 16, 2016 | Grain Hedge Insights | | Views: 550
February 16, 2016 | Grain Hedge Insights | Kevin McNew | Views: 311

Grains Came Back From The Holiday Weekend in a Buying Mood

In outside markets, S&P futures and crude oil were sharply higher early in the night session, but had pared gains going into the morning trade

Grains Came Back From The Holiday Weekend in a Buying Mood

Grains came back from the holiday weekend in a buying mood with 2 to 5 cent gains going into the morning break. In outside markets, S&P futures and crude oil were sharply higher early in the night session, but had pared gains going into the morning trade.

 

The current lineup of ships to load soy and corn at Brazilian ports has grown to twice the number seen a year ago as excessive rains delayed loading and the weak currency boosts export sales. There are currently 163 ships waiting to load soy and corn at Brazilian ports, according to data from shipping agency Williams compiled by Reuters, with total grains volume of an estimated 9.73 MMT. At this time last year there were 66 ships waiting to load 4.1 MMT.

 

South America weather continues be widely favorable for crop development. Brazil weather during the weekend and that expected over the next couple of weeks will be good for most crop areas, but not the northeast where net drying is expected. Argentina weather will remain very good for its summer grain and oilseed crops.

 

This morning, USDA reported a fresh sale of 190,000 MT of corn to Columbia. Today at 11 am CDT, the NOPA crush estimate will be released. Analysts expect 155.267 million bushels, vs. NOPA's December figure of 157.711 million. In January 2015, NOPA processors crushed 162.675 million bushels.

 

Qatar, Saudi Arabia, Russia and Venezuela agreed to freeze their oil output at January levels providing other major producers follow suit, Qatar's energy minister said on Tuesday after a meeting of those countries' energy ministers. However, markets sold off on this news as there is growing skepticism that other countries will unilaterally follow suit.

 

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

February 12, 2016 | Grain Hedge Insights | Kevin McNew | Views: 248

Weekly Cash Comments

Weekly Cash Commentary for week ending 02/12/2016

Grain basis levels continued to hold relatively stable this week with soybeans unchanged while corn basis was off 1 cent a bushel.

 

Basis levels have been exceptionally stagnate for some time. Indeed, going back to Nov 1, spot corn basis versus March corn futures has only improved 11 cents a bushel, with the majority of that move occurring in November. Likewise, soybeans has seen only an 8-cent advance in basis since Nov 1 off the March futures.

 

This week saw some weakness at the Gulf with both spot corn and soybean basis off 3 cents a bushel. But, river terminals saw an increase in basis for soybeans by 0.5 cents a bushel, while corn basis at river terminals was off 2.5 cents a bushel.

 

For end users, ethanol plants were weaker by 0.7 cents a bushel, but soybean plants posted a 1-cent advance on average for the week.

 

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

February 12, 2016 | Grain Hedge Insights | Kevin McNew | Views: 241

Wheat Held in Positive Territory Overnight

Grains were mixed overnight with beans giving up some of yesterday’s impressive gains, while wheat held up in positive territory

Grains were mixed overnight with beans giving up some of yesterday’s impressive gains, while wheat held up in positive territory. Corn was fractionally lower. Outside markets were reversing yesterday’s sharp action with equities, crude and the US dollar shooting higher while bonds were sharply lower.

 

The Korea Feed Association (KFA) issued a tender overnight to purchase up to 130,000 MT of corn from optional origins. The tender sought arrival of the corn around July 20 in two consignments of up to 65,000 MT.

 

Egypt's state buyer GASC received five sales offers in an international tender to purchase wheat on Friday as serious concern continued over tough new quality rules which have disrupted the country's massive wheat imports, traders said. Participation in Friday's tender by international grain trading houses was again low compared to tenders in past months following concern about with Egypt's limits on imports of wheat containing the ergot fungus, traders said. The lowest offer was $185.25 a MT FOB for wheat sourced from France.

 

Stocks got a bit of a boost this morning as US retail sales for January were in line with analyst estimates of +0.2%. Retail Sales less autos and gas +0.4% vs. +0.3% expected, +0.1% prior. Oil was higher following yesterday’s news that OPEC countries “might” begin to discuss production cutbacks.

 

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

February 11, 2016 | Grain Hedge Insights | Kevin McNew | Views: 532
February 11, 2016 | Grain Hedge Insights | Kevin McNew | Views: 220

Global Markets Continued to Fall Overnight

The good news for grains continues to be the sharp selloff in the US dollar

Global markets continued to fall overnight as risk in European banks sent shares lower abroad and pushed S&P futures sharply lower in the overnight. Grains were mixed with soybeans and wheat posting modest gains and corn putting on a fractional loss.

 

In corn, yesterday saw EIA ethanol output up 10,000 BPD to 969,000 BPD, but the bearish news was the growing levels of stocks. Weekly ethanol stocks ballooned to 22.96 MBLS, up 594,000 BLS to reach its highest level ever. The good news for corn was a big export deal announced Wednesday morning of 243,000 MT of US corn to Japan. The good news for grains continues to be the sharp selloff in the US dollar, which should help improve the US competitive position in global grain markets.

 

South America continues to be favorable and USDA confirmed what they expect to be a record large crop in soybeans with Argentina’s crop expected to be 58.5 MMT versus USDA’s forecast last month of 57.0 MMT.

 

Fresh cracks appeared in global markets on Thursday as investors sought the safety of Japanese yen, gold and top-rated bonds while dumping U.S. dollars on bets the Federal Reserve could be done raising interest rates. Even the absence of Tokyo for a holiday could not stop the dollar from hitting a 15-month low on the yen, and gold finally broke major chart resistance to reach its highest since May. Silver was also up sharply on the global weakness and fall in the US dollar.

 

WEEKLY EXPORT SALES (in thousand metric tons)

 

                            Actual         Expected

Corn                        365          800-1,100

Soybeans                 601            300-600

Wheat                     299            150-350

 

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

February 10, 2016 | Grain Hedge Insights | Kevin McNew | Views: 674
February 10, 2016 | Grain Hedge Insights | Kevin McNew | Views: 275

Grains Were Mixed in the Overnight

Yesterday’s supply and demand report from USDA did little to reverse the trend of lower prices

Grains were mixed overnight as corn and wheat came under pressure while soybeans posted modest gains. In outside markets, equity futures had a rare rally going into the morning trade while crude oil tried to maintain positive territory ahead of EIA’s inventory numbers.

 

Yesterday’s supply and demand report from USDA did little to reverse the trend of lower prices as government forecasters increased their expectations on old-crop supply carry-out. Corn and wheat stocks showed the biggest increase thanks to a drop in USDA’s projections for exports. Soybean crush numbers were lowered as well helping boost soybean inventories to 450 MB. The USDA also raised its forecast of 2015/16 world wheat ending stocks to 238.87 MMT, above trade estimates. The figure would be the largest in history if realized.

 

In overnight news, Japan announced the results of its regular wheat tender. The US garnered about a third of the deal totaling 146,000 MT while Australia and Canada factoring heavily in the offer. Russia will ban imports of corn and soybeans from the United States starting from Feb. 15, a spokesman for Russia's agricultural watchdog, Rosselkhoznadzor, told Reuters on Wednesday. Earlier on Wednesday, the watchdog said its deputy head, Yulia Shvabauskene, had told the United States about concerns related to the phytosanitary safety of corn and soybean imports. Since September Russia imported 396,000 MT of US beans and there's no outstanding (still to ship) sales on the US books.

 

European stocks rose on Wednesday, rallying after losses in Asia, as concerns about the health of banks that have hammered shares globally in recent days eased and oil prices recovered from Tuesday's steep falls. Investors and traders awaited Congressional testimony from Federal Reserve Chair Janet Yellen for clues to the outlook for monetary policy. Sharp falls in global stocks and weak U.S. economic data have led markets to slash expectations for the pace and extent of Fed interest rate rises to follow December's first hike in nearly a decade.

 

Oil rose on Wednesday, after having posted its third-biggest daily fall since the 2008 financial crisis the day before, supported by the possibility of major producers cooperating to tackle a supply glut that has sent prices to 12-year lows. Iran's oil minister said Tehran was ready to negotiate with Saudi Arabia and the Kremlin's oil tsar Igor Sechin proposed producing countries reduce output by 1 million barrels per day - without saying whether non-OPEC member Russia would cut. While traders and delegates from OPEC doubt any deal between the group and rival producers - which would be the first in over a decade - will happen, talk of it has boosted the market.

 

Metals drifted lower in overnight trade as gold took a break from its recent high of $1,200 an ounce, the highest since June 2015, but remains supported by safe haven demand amid tumbling stock markets and concerns over the health of global economy. Silver also pulled back overnight as the US dollar found some stability with investors waiting on fed chair Yellen’s comments today.

 

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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Grains Weaker Overnight

April 27, 2016 | Grain Hedge Insights | Kevin McNew

Grains were weaker overnight but seemed to finding some pullback heading into the morning break. Meanwhile, crude oil continues to hit fresh highs on this rally, posting a $1 a barrel gains going into the day while equity futures were sharply lower.

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