March 09, 2017 | Grain Hedge Insights | Kevin McNew | Views: 249

USDA Supply and Demand Report out Today at 11am CST

Grains Continue to sink lower

Ahead of USDA’s crop report, grains continued to sink lower with soybeans trading below $10.17 for the first time since Feb 27. In outside markets, crude oil was on a $5 downside beating in the last two days thanks to a huge build in crude stocks over the last week.

 

USDA reported a 120,000 MT of corn sales to Japan.

 

Brazil's agricultural statistics agency Conab on Thursday raised to 107.6 MMT its estimate for the country's 2016/17 soybean crop, up 2 MMT from its previous forecast. The agency said corn output in the season should reach 88.9 MMT, compared to 87.4 MMT estimated last month, as favorable weather for grains production continue to boost crop prospects.

 

In overnight news, a South Korea feed group was in the market for 66,000 MT which may come from optional origin sources. Saudi Arabia was looking to buy 720,000 MT of hard wheat. No origins were specified but it is thought EU origins might have an inside track to the business.

USDA’s supply and demand report will be out at 11 am CDT and is not expected to change the tone of traders attitudes. Attention will focus on SA crop projections with the trade looking for a bump higher in Brazil’s corn and bean estimates. This morning’s export sales report was mostly in line with expectations, which are nothing impressive on a seasonally-adjusted basis.

Fresh export business continues to be light. Meanwhile spot basis at river terminals took a fairly substantial hit yesterday. Corn basis at river terminals across 87 buyers tracked by Grain Hedge fall a collective 3 cents a bushel yesterday. Soybean basis was a bit weaker at IL river terminals. Corn plants were mixed  with 12 plants raising their basis yesterday, 9 dropping their basis and the remaining 121 plants holding steady. For soy crushing plants 4 out of 52 plants raised their basis yesterday.

 

Weekly Export Sales-

 

Actual

Expected

Wheat - OC

391

300-500

Wheat - NC

40

50-200

Corn - OC

741

700-1,000

Corn - NC

93

0-100

Soybeans-OC

485

350-550

Soybeans-NC

29

0-100


 

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

March 08, 2017 | Kevin McNew | Views: 504
March 08, 2017 | Editor's View | Elise Schafer | Views: 645

One Week Left to Add Your Facility to List of Exporters to China!

Let AFIA know by March 15 if your company exports or wishes to export to China

One Week Left to Add Your Facility to List of Exporters to China!

Attention all feed additives or feed premix exporters! If you are currently exporting or wish to export products to China within the next five years, you must fill out this form (one for each facility), and email it to the American Feed Industry Association (AFIA) by March 15.

In 2009, the Chinese government released Decree 118, requiring all feed facilities exporting non-medicated feeds to China to register with their Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).

According to Gina Tumbarello, AFIA’s director of international policy and trade, since there was no mechanism for facilities to register for export when the decree was announced, AQSIQ has been implementing protocols for facility registration by feed product groups since 2011. The Chinese agency is currently on the feed product group “feed additives and premixes.” As part of its process of establishing a protocol for feed facilities to become registered, China has requested from industry an all-inclusive list of U.S. facilities currently exporting and/or wishing to export feed additives and premixes to the country.

This facility list will be used to determine which facilities will participate in a visit by AQSIQ to a sampling of facilities, so they can determine a checklist of requirements for all U.S. facilities wishing to export feed additives or premixes to China.

Tumbarello said once the protocol is established for “feed additives” and “premixes,” from then on, all U.S. facilities wishing to export feed additives and/or premixes to China will have to follow this new protocol.

Once the protocol (checklist of requirements) is determined by AQSIQ, and is implemented, the facilities on the list originally provided to AQSIQ will be able to apply for facility registration for export of feed additives and premixes to China. If your facility is NOT included on AFIA’s initial facility list, the next opportunity to register your facility with AQSIQ may not be for several years. See AFIA's infographic below for a detailed explanation.

How can you ensure that your business with Chinese customers will not be interrupted? Simply follow these two steps:

  1. Complete the online form (one for each facility) and submit to Gina Tumbarello, gtumbarello@afia.org, and
  2. Pay administrative fee* online, per facility
  • AFIA Member: $250 per facility
  • Non-member: $500 per facility

*This administrative fee will help AFIA offset the administrative expenses associated with AQSIQ’s travel to the U.S. to conduct the systems audit required to establish the protocol for U.S. facilities to obtain the facility registration that will be needed export feed additives/premixes to China.

NOTE: By completing the form, your facility will be included on the facility list for consideration by AQSIQ to obtain the required facility registration needed for export of feed additives and/or premixes to China. This will NOT automatically approve you or register your facility with China AQSIQ. However, as part of this process for consideration, your facility may be audited by China AQSIQ.

March 08, 2017 | Grain Hedge Insights | Kevin McNew | Views: 255

US Southern Plains Continue to be Dry

Grains Continue to Bleed Lower Overnight

US Southern Plains Continue to be Dry

Grains continued to bleed lower overnight with front-month May beans trading to their lowest level in two weeks. In outside markets, crude oil gave up 50 cents a barrel while the US Dollar and equity futures trended higher.

 

Soybean imports for February were 5.5 MMT which is 23% below the January import total but still 28% above the same month last year. Both the hog margin in China and soybean crush margins have been moving lower over the past month.

 

The US Southern Plains continue to be dry with high wind conditions. The winter wheat crop is reportedly 3 weeks ahead of normal in terms of maturity with only modest chances of rain in the SE Plains over the next two weeks. However, ample global supplies should keep prices in check, while also giving the market a break was news that Japan would skip its regular weekly wheat tender.

 

Tomorrow’s USDA report is expected to show no major changes to US carryout figures. However, traders do expect USDA to ratchet up Brazil crop forecasts for soybeans to 105.9 (vs 104 in Feb) and corn to 87.8 (8.5 previously). Argentina crop estimates are expected to stay mostly the same from February.

 

U.S. private employers added 298,000 jobs in February, well above economists' expectations, a report by a payrolls processor showed on Wednesday. Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 190,000 jobs, with estimates ranging from 150,000 to 247,000. This pushed the dollar higher in early morning trade. Official government jobs data will come on Friday morning.

 

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

March 07, 2017 | Kevin McNew | Views: 209
March 07, 2017 | Grain Hedge Insights | Kevin McNew | Views: 239

US Export Prices Firmed Relative to Foreign Competitors Over Last Week

South Korea will ban imports of US Poultry

South America’s crop size continues to balloon as FC Stone released its projections on Brazil. They peg the soybean crop at 109.1 MMT vs 104.1 in February. While they see a small drop in the 2nd season crop at 61.3 MMT vs 61.6 previously, they boost the 1st season crop to 32.0 vs 29.9 previously.

 

South Korea, Japan, Taiwan and Hong Kong have limited imports of US poultry after the US detected its first case this year of avian flu on a commercial chicken farm. South Korea will ban imports of U.S. poultry and eggs after a strain of H7 bird flu virus was confirmed on Sunday at a chicken farm in Tennessee. So far this year South Korea has shipped in nearly 1,049 tonnes of U.S. eggs, according to ministry data, accounting for more than 98 percent of its total egg imports as of March 3.

 

Overnight a South Korea feed manufacturer bought 60,000 MT of US corn. Iraq is purportedly in the market for wheat and is seeking it from the United States, Canada or Australia.

 

US export prices firmed relative to foreign competitors over the last week. Brazilian soybean prices fell $ a Mt on the week relative to US prices.

 

 WORLD EXPORT PRICE SPREADS RELATIVE TO US

Crop

Country

Today

Last Week

Last Year

CRN

ARG

-$4.4

-$3.9

+$0.5

CRN

BRZ

-$22.6

-$20.4

-$21.5

CRN

EUR

+$0.0

+$1.7

-$19.7

SBN

ARG

-$7.9

-$4.0

-$13.5

SBN

BRZ

-$2.0

+$4.1

-$9.8

WHT

EUR

-$17.8

-$14.2

-$42.9

 

Export spreads represent a foreign country price minus US price

at export destinations, in USD per metric ton.  A higher spread indicates

the foreign price has risen relative to US prices, making the foreign country less

competitive and the US more competitive.


 

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

March 06, 2017 | Kevin McNew | Views: 250
March 06, 2017 | Grain Hedge Insights | Kevin McNew | Views: 238

Grains In Positive Territory to Start the Week

In Outside Markets, Crude Oil drifts Lower

Grains were in positive territory to start the week led by wheat. In outside markets, crude oil and the US dollar drifted lower.

 

Australia's 2017/18 wheat crop is expected to fall 32% from the previous season, according to ABARES govt forecast, as seasonal conditions turn drier, pushing yields to average levels. Farmers there are expected to harvest 23.98 MMT of wheat next season down from a record 35.13 MMT in 2016/17. Acreage planted in April is expected to be off only 1% but dry conditions expected from a re-surging El Nino in the next  months are expected to push yields to a three-year low.  

 

Heavy rain has hampered road transport towards northern ports in Brazil. But, estimates continue to grow on the overall size of the Brazilian bean crop. Traders look for an upward revision in the USDA monthly to 106 MMT up from 104 previously.

 

South Texas saw some decent rains over the weekend bringing 1 to 3 inches of precipitation. Combined with previous rains over the past week it should be adequate for improved spring field work and early planting. Meanwhile OK/KS saw no real precipitation over the weekend. The next 7 days looks dry with weather patterns favoring locations to the East in AR/MO & S IL.

Crude oil softened overnight as US oil rig counts continued to rise. The number rose 609, the highest since October 2015 and the seventh straight week rig numbers have risen. Also weighing on trade is data last week showing Russia's February oil output was unchanged from January at 11.11 million barrels per day (bpd), giving doubt on Russia's moves to rein in output as part of a pact with oil producers last year.

 

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

March 03, 2017 | Kevin McNew | Views: 227
March 03, 2017 | Grain Hedge Insights | Kevin McNew | Views: 266

US Dollar Index Erodes Overnight

Grains were mixed overnight heading into the morning break

Grains were mixed overnight heading into the morning break. In outside markets, the US Dollar index eroded overnight while crude oil tried to bounce higher after sharp losses on Tuesday.

 

In Brazil, at least 11 ships are facing delays loading beans at some northern ports as rained out roads have stalled truck deliveries from Mato Grasso. Road work has begun to help the stalled truckers as several thousand trucks have reportedly been stranded on unpaved, rain damaged roads.

Growing conditions in Argentina's main soy belt were helped over the previous seven days by showers in areas that had suffered from a lack of ground moisture, the Buenos Aires Grains exchange said on Thursday in its weekly crop report. Rain in the central and southern agricultural area improved moisture levels in southeast Buenos Aires, where conditions had been overly dry during the last month the report said.  The exchange kept its estimate for the recently planted 2016/17 soybean crop unchanged at 54.8 million tonnes.

Russia is considering exporting part of its 4 MMT state grain stockpile to free up storage space before the new crop arrives, industry sources said.  Russia's storage capacity is buckling after the country harvested a record grain crop of 121 MMT in 2016, with prospects for this year also looking favorable.

 

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

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