February 10, 2016 | Grain Hedge Insights | Kevin McNew | Views: 77

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)

February 09, 2016 | Grain Hedge Insights | Kevin McNew | Views: 341
February 09, 2016 | Grain Hedge Insights | Kevin McNew | Views: 110

USDA Report to be Released this Morning

Markets continued to weaken overnight with grains, stocks and crude all under pressure.

Markets continued to weaken overnight with grains, stocks and crude all under pressure.

 

In grains, prices continued to be pressured following Monday’s setback as traders await fresh data from USDA in their monthly Supply and Demand report. The report will be released at 11 am CDT today, and below are the expectations going into the report.

 

US Ending Stocks (in million bushels)

 

                 Expected       Range       USDA Jan

Corn             1,809    1,752-1,852        1,802

Soybeans         445        425-470             440

Wheat             947        937-975             941

 

World Stocks (in million metric tons)

 

                  Expected      Range        USDA Jan

Corn             208.25    203.5-210.0       208.94

Soybeans        78.97     76.36-81.0          79.28

Wheat          231.48   229.66-233.0       232.04

 

Tunisia's state grains agency has issued an international tender to purchase 67,000 MT of soft milling wheat. China is on Lunar Holiday this week and will be absent from the market.

 

In outside markets, stock equity futures were close to another 1% loss to start the day.  Tokyo shares fell sharply in Tuesday trading, following tumbling markets across Europe and the US. The Nikkei 225 closed down 5.4% or 918.86 points at 16,085.44. It was its worst one-day fall since mid-2013.

 

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

February 08, 2016 | Grain Hedge Insights | Kevin McNew | Views: 361
February 08, 2016 | Grain Hedge Insights | Kevin McNew | Views: 142

Grains Lower Overnight

Stock futures and crude oil started the day with big losses.

Grains were lower overnight sinking to fresh lows on the month, while stock futures and crude oil started the day with big losses.

 

Overnight, Ukraine raised its grain export forecast for the 2015/16 season to around 37 MMT from 36. The increase comes from rising corn demand and expectations of a big corn crop next year. Wheat growers who suffered crop losses as a result of a severe drought last year and frost in winter would likely reseed much of the affected fields with corn. The drought has put the harvest across as much as one third of Ukrainian farmland at risk of poor yields.

In Argentina, the most important rainfall of the we

ek will occur today and Monday hitting Argentina’s driest region from eastern Cordoba through central and southern Santa Fe northeastern Buenos Aires, Uruguay and southernmost Corrientes. Rainfall in these drier areas will range from 0.80 to 2.50 inches and local totals over 4.00 inches. Two other significant rain events are slated for summer grain and oilseed crop production areas through the balance of the next two weeks. The first event occurs Friday into Sunday, Feb. 14, and the second event occurs Feb. 16 -18. If all three rain events occur as advertised corn and soybean production areas will be plenty wet and poised for good production potentials.

 

In outside markets, European stocks slid to fresh 16-month lows dragging down US stock futures and crude oil. Overnight, China's foreign reserves fell for a third straight month in January, as the central bank dumped dollars to defend the yuan and prevent an increase in capital outflows. China's foreign reserves fell $99.5 billion to $3.23 trillion in January, the lowest level since May 2012, central bank data showed, but higher than the median forecast of $3.20 trillion from economists surveyed in a Reuters poll. The size of the drop was second only to the $107.9 billion fall in December, the largest monthly decline on record. The central bank has intensified efforts to prop up the yuan after it staged a surprise devaluation in early August.

 

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

February 05, 2016 | Grain Hedge Insights | Kevin McNew | Views: 159

Weekly Cash Comments

Weekly Cash Commentary for week ending 02/05/2016

Soybean basis came under pressure this week giving up 2 cents a bushel, while corn basis continued to flat line at unchanged on the week.

 

Corn basis, although on average across the country it was unchanged for the week, did find some modest strength on the Eastern Seaboards well as in parts of Nebraska and South Dakota as a massive blizzard midweek shut down grain flows. Corn piling continues to be fairly prominent still in the Western Cornbelt and will act as a constraint on any significant basis improvement. At the Gulf, basis levels slipped 4 cents a bushel although river terminals were more stable only giving up 1 cent a bushel. At ethanol plants, corn basis was unchanged for the week.

 

For soybeans, basis levels fell under weakness this week as higher futures brought on more farmer selling and a 10 cent loss at the Gulf export market signaled a significant slowing in the US export program. River terminals lost 5 cents a bushel on average although losses of 10 to 15 cents were fairly common at some locations. At soy plants, basis levels were unchanged on average, although plants in the Southeast were up 5 to 10 cents a bushel.

 

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

February 05, 2016 | Grain Hedge Insights | Kevin McNew | Views: 200

Grains Quiet in the Overnight Session

In outside markets, the US dollar inched higher after being routed in the last two trade sessions

Grains Quiet in the Overnight Session

Grain markets were mostly quiet overnight with corn and wheat posting fractional changes while soybeans advanced around 3 cents a bushel. In outside markets, the US dollar inched higher after being routed in the last two trade sessions while crude oil and stock futures also were quiet, posting modest gains.

 

Thursday, Stats Canada estimated all wheat stocks there at 20.7 MMT versus expectations of 21.8, while canola stocks were pegged at 12.1 MMT up from expectations of 11.5. Overnight, Egypt had only 4 offers on its wheat tender as their quality restrictions continue to impede grain companies in offering supplies.

 

For South America, weather models point to favorable growing conditions as most of Argentina’s driest areas will get adequate rains next week. Production potentials will likely be restored near normal and the bottom line for Argentina is still a very good production year. In the meantime, Brazil will experience a favorable mix of rain and dry weather during the next two weeks supporting good crop development for nearly all of the nation.

 

The wait for U.S. monthly jobs numbers steadied stock markets on Friday and allowed the dollar to recover after what has so far been its weakest week in more than six years. After posting a strong number of 292,000 in December, January Non Farm Payroll is expected to cool down within the range of 170K to 245K while the unemployment rate is expected to hover in between 4.9% to 5% range. The actual report released at 7:30 am CDT this morning showed weaker than expected payroll numbers of 151,000 but the unemployment rate ticked down to 4.9%. Silver futures continued to inch higher overnight as weakness in the US economy is spurring prices to reach their highest mark since November.

 

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

February 04, 2016 | Grain Hedge Insights | Kevin McNew | Views: 397
February 04, 2016 | Grain Hedge Insights | Kevin McNew | Views: 161

US Dollar Continues to Move Lower

Grains were higher overnight with corn and wheat up 2 cents while soybeans were up 4 cents.

Grains were higher overnight with corn and wheat up 2 cents while soybeans were up 4 cents. In outside markets, the US dollar continued to move lower giving up 0.5% after losing 1.6% yesterday, which is supportive for grains. Stock futures were drifting lower as was crude oil. Silver and gold futures were still on the rise as economic risk leads to investors turning to safe havens of precious metals.

 

On Wednesday, EIA’s weekly ethanol report showed production off 2,000 BPD to 959,000 bpd, while stocks climbed sharply by almost 1 million barrels to 22.36 million barrels on the week. Overnight, Brazil’s Conab pegged the soy crop at 100.9 MMT, which was lower than their previous estimate of 102.1 in January, but still slightly higher than USDA’s estimate of 100.0. Conab sees Brazil’s corn crop at 83.3 MMT vs 82.3 MMT in January and USDA at 81.5 MMT.

 

Algeria's state grains agency OAIC bought between 450,000 MT and 500,000 MT of optional-origin milling wheat in a tender this week, European traders said on Thursday. OAIC paid around $178 a MT, cost and freight included, for the wheat, which was likely to be sourced in France and also partly in the UK.

 

Crude oil was up sharply on Wednesday gaining $2 a barrel on the US dollar plunge as well as news that Venezuela was looking to enter into talks with other nations to reduce output. However, the warning flag on oversupply continues to get deeper in the red as EIA crude oil stocks showed that weekly US crude oil inventories were up 7.8 million barrels when analysts only expected a 4.8 increase. Likewise, gasoline stocks ballooned by 5.9 million barrels compared to only a 1.7 million barrel increase that was expected.

 

The US dollar was back on the defensive in early trade in Europe after a collapse in expectations of a further rise in U.S. interest rates this year drove its biggest daily fall in over two months on Wednesday. Against a basket of currencies, the greenback fell another 0.5 percent to 96.796, it’s lowest since early November. The euro hit a 3-1/2 month high of $1.1161 EUR=EBS, extending its gains from an explosive sell-off a day earlier.

 

WEEKLY EXPORT SALES

 

                              Actual      Expected     Last Week

Corn                        1,129      800-1,000        817

Soybeans                     -43       400-600         647

Wheat                          66       200-400         294

 

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

February 03, 2016 | Grain Hedge Insights | Kevin McNew | Views: 428

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Grains Lower Overnight

February 08, 2016 | Grain Hedge Insights | Kevin McNew

Grains were lower overnight sinking to fresh lows on the month, while stock futures and crude oil started the day with big losses.

Overnight, Ukraine raised its grain export forecast for the 2015/16 season to around 37 MMT from 36. The increase comes from rising corn demand and...

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Grains Quiet in the Overnight Session

Grains Quiet in the Overnight Session

February 05, 2016 | Grain Hedge Insights | Kevin McNew

Grain markets were mostly quiet overnight with corn and wheat posting fractional changes while soybeans advanced around 3 cents a bushel. In outside markets, the US dollar inched higher after being routed in the last two trade sessions while crude oil and stock futures also were quiet,...

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