August 10, 2016 | Grain Hedge Insights | Kevin McNew | Views: 322

Grains Higher in the Overnight

Crude Oil Dips Below $43

Grains were higher overnight although continue to struggle with relatively tight, range-bound trade. In outside markets, crude oil dipped below $43.


This morning USDA announced a 143,650 MT sale of corn to Mexico. It was the first day in 10 days when there were no soybean announcements. In other export news, the Taiwan Sugar Corp. purchased 20,000 tonnes of US-origin corn and 15,000 tonnes of US-origin soybeans in a tender which closed on Wednesday, European traders said. Australian wheat exports in August look set to hit an eight-month high as the lowest prices in a decade draw Southeast Asian millers to market, easing worries that the fourth-biggest seller would fail to meet official forecasts for the season. Exports will hit 1.4 million tonnes in August, port shipping data shows, a rise of nearly 30 percent from July and the largest business month since December 2015.


But, in the EU bad weather continues to plague key wheat areas there. France's exports of soft wheat outside the EU will fall to 4.8 million tonnes in 2016/17 from an estimated 12.5 million last season due to a weather-hit harvest in the bloc's biggest grain grower, agricultural group InVivo forecast on Wednesday. French soft wheat shipments within the European Union were expected to fall to 6.7 million tonnes from 7.5 million, which would give total exports of 11.5 million tonnes, down about 40 percent from last season and the lowest volume since 2001/02.


USDA’s crop report on Friday is expected to show higher production of corn and soybeans from USDA’s first formal farmer survey of the season on production. Traders look for a corn yield of 170.6, up from USDA’s July projection of 168, while soybean yields are expected  at 47.5, up from 46.7 in July.


In crude oil,, the American Petroleum Institute (API) on Tuesday showed weekly U.S. inventories increased by 2.09 million barrels. But, the report also found a 3.9-million-barrel drop in gasoline stockpiles and a 1.5-million-barrel draw for distillates. Analysts are expecting that the Energy Information Administration (EIA) will report a 1.0-million-barrel drop in U.S. crude oil inventories when it releases its official weekly data on Wednesday, but the API data lends greater uncertainty to these forecasts.


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

August 09, 2016 | Grain Hedge Insights | Kevin McNew | Views: 404
August 09, 2016 | Grain Hedge Insights | Kevin McNew | Views: 306

Grains Slip Overnight

Crude Oil holds steady

Grains slipped overnight with soybeans giving up 6 of yesterday's 10-cent advance. Corn and wheat also moved lower in the night session. In outside markets, crude oil held steady around the $43 mark while the US dollar was mildly lower.


On Monday after the close, USDA’s crop ratings showed a drop in corn condition from 76% good-to-excellent last week to 74% good-to-excellent this week. Soybean atins held steady on the week. In the Eastern Corn Belt of IN & OH, conditions continue to be sub-par. Corn in Ohio slipped on the week from 54% to 47%, soybeans 58% to 52%, Indiana corn from 77% to 73%; soy 75%  to 74%.


Rains were non-existent in the last day over the US Midwest except for parts of Western NE
and S MO. Weather models show some chance of rain in the ECB next week.


France's weather-hit soft wheat harvest will produce 28.68 million tonnes, down 30 percent from a record 2015 crop, consultancy Agritel said on Tuesday. The production estimate was based on an average yield pegged at 5.48 tonnes per hectare, down from 7.93 tonnes per hectare last year, Agritel said in a harvest report. However,Russia should see higher wheat production this year.  Russia's IKAR agriculture consultancy said on Tuesday it had upgraded its forecast for Russia's 2016 grain crop by 2 million tonnes to 116 million tonnes. Its wheat crop forecast for the year was raised by 1 million tonnes to 70 million tonnes, IKAR added.


Crude oil took a break overnight from recent gain $39 mark up to $43 a barrel in the past week. The market has found renewed strength thanks to OPEC  stating in a written statement on Monday the cartel will hold an informal meeting in Algeria on September 26-28 on the sidelines of the 15th International Energy Forum.


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

August 08, 2016 | Grain Hedge Insights | | Views: 356
August 08, 2016 | Grain Hedge Insights | Kevin McNew | Views: 297

Soybeans Gapped Higher Overnight

Informa put out their forecasts for crops on Friday

Soybeans gapped higher overnight and were poised to go into the break with a 10-cent advance. Corn and wheat were also higher, extending gains from the end of last week.


On Friday, private analyst Informa put out crop forecasts generally lower than other analysts. For corn, they peg yield at 169.8 bushels/acre and production at 14.7 billion bushels while soybeans are projected to be 47.7 bushels/acre with a 3.96 billion bushel crop. Some talk has been circulating about potential issues with the corn crop. U of IL agronomists point to tip-back problems in some test plots suggesting the crop was under stress during the fill stage, even though it looks very green. Indeed, comparing Iowa yields in years of record production shows that high temperatures in June are generally in the low 80s. This year was the hottest June in 80 years which could limit the ability of the crop to hit a record yield this year.


Iowa Record Corn Yield Years and Average June High Temperatures

Year          Avg Jun High Temp      Yield

1986                     83.3                 135

1992                     81.9                 147

1994                     82.2                 152

2002                     84.3                 163

2004                     78.0                 181

2015                     81.9                 192

2016                     88.1                   ??


In the Eastern Corn Belt of OH & IN, a crop tour by Thomson Reuters found some drought stress in the late-planted crops there, but suggested the corn crops could still see respectable yields if weather is favorable in the later part of the season. Even so, it seems unlikely these areas will hit record yields.


Ohio soybeans were in much tougher shape than those in Indiana. Signposts of stress were very apparent on these soybeans, including many aborted flowers (meaning that pods will not form) and exposed leaves turned inward away from the sun even early in the day. Plants with aborted flowers still have the chance to produce new flowers, but it would be difficult to do without sufficient moisture. And once the pods are formed, the weather is instrumental in determining the size of the bean within.

But soybeans could be in luck because unlike corn, soybeans can often make do with just one or two good rainfalls in August, even if the temperatures are warmer. Current weather models suggest improved rainfall chances in the 7-14 day period.  


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

August 05, 2016 | Grain Hedge Insights | Kevin McNew | Views: 318

Weekly Cash Comments

Weekly Cash Commentary for week ending 08/05/2016

National basis was mixed to end the week.


Corn basis showed the most volatility this week. On average, corn basis rose half a cent driven by the central plains and ethanol plants. Ethanol plants gained almost 2 cents per bushel. This was partly driven by higher demand in Brazil for U.S. Ethanol. Corn along the river defied the trend and lost almost 6 cents per bushel.


Overall, soybeans were the biggest loser this week off more than 8 cents per bushel. Crush facilities lost 4 ½ cents.  Even with strong exports, basis losses along the river were off 7 ¼ cents keeping in step with corn losses.


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

August 05, 2016 | Grain Hedge Insights | Kevin McNew | Views: 336

Soybeans Gain in the Overnight Session

Crude prices end their two day rally

Grains found support in the overnight session. Soybeans lead the bounce, gaining almost 16 cents.


Concerns of moisture stress are on the horizon for parts of the grain belt. According to the Commodity Weather Group, scattered showers may occur in mainly southern Nebraska/Kansas/Missouri/southwest Iowa in the next five days, with only patchy activity elsewhere in the Midwest. However, widespread rains are expected to favor the central/northwest Midwest in the 6 to 10 day and will keep most of the driest spots in the Midwest limited to Indiana/Ohio/Michigan (15% of belt).


The CWG also stated there may be a few showers that may scatter through the southern Great Lakes in the 11 to 15 day, but some moisture stress will likely persist. Elsewhere, the favorable moisture and lack of extreme heat will aid corn/soy yields. Mid 90s are possible in the southwest Midwest next Wednesday to Friday, but highs otherwise remain in the 80s/low 90s in the next two weeks.


Crude prices began to slip today, ending a two-day rally. The glut of crude and its refined products weighed on markets while investors eyed a possible stutter in China’s imports.


In world news, France's farm ministry cut its yield estimate for this year's soft wheat harvest to a 30-year low. The plunge in yields led the ministry to reduce its soft wheat production estimate to 29.1 million tonnes from 36.95 million forecast last month, now down 29 percent on last year's record 40.9 million tonnes and the lowest level since 2003. The downward revision in French wheat crop is equivalent to the size of the entire wheat crop of Romania, the 5th largest wheat grower in the EU.


South Korea, the fifth largest market for U.S. wheat, had suspended clearance of U.S. wheat for food use and stepped up quarantine measures for U.S. milling and feed wheat shipments in the wake of the U.S. GMO wheat discovery last week. In other news, flash sales of 498,000 metric tons of new crop soybeans were sold to China.


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

August 04, 2016 | Grain Hedge Insights | Kevin McNew | Views: 379
August 04, 2016 | Grain Hedge Insights | Kevin McNew | Views: 381

Grains Continue their Solid Gains

US Dollar and Equity Futures Positive

Grains yet again came into the morning break with solid gains, but in past sessions have been unable to hold those gains once day-trading commences. In outside markets, crude oil slipped slightly off of yesterday’s sharp advance while the US dollar and equity futures were in positive territory.


Traders continue to look for record large corn and soybean crops this fall. The latest private firm to put out a forecast was Linn Group. They peg the US corn yield at 171.4 and an overall crop of 14.8 billion bushels versus USDA’s July yield of 168 and production estimate of 14.5 billion. For soybeans, they see yield at 48.6 and production at 4.07 billion bushels versus USDA of 46.7 and 3.88. USDA will release their first survey-based estimate of crop size next Friday, August 12th.


US corn prices are competitive in the world market as Brazil has shortage issues and Argentina has significantly higher prices than the US. The only real competitive country is the Ukraine, but even they are a few dollars per metric ton higher than the US. Ukraine’s summer season is proving more problematic for corn growth as dry conditions are stressing about ⅓ of the country’s corn crop.


This week’s export sales were solid for corn and soybeans. Wheat was in-line with expectations. A recent discovery of an unapproved GMO strain of wheat in Washington may hamper Asian trade with the US as countries there look for signs of unapproved GMO wheat in their US imports.




                                   OC-Act       OC-Exp      NC-Act       NC-Exp

Corn                                 331      300-500           896       500-700

Soybeans                          542      300-600        1,128    800-1,200

Wheat                                                                470       350-650


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

August 03, 2016 | Grain Hedge Insights | Kevin McNew | Views: 406

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