March 14, 2016 | Grain Hedge Insights | Kevin McNew | Views: 509
March 14, 2016 | Grain Hedge Insights | Kevin McNew | Views: 289

Corn and Wheat Higher in Overnight Session

Crude oil was off sharply with equity futures also sinking in the overnight trade session.

Grains were mixed with corn and wheat higher in overnight trade, while soybeans were slightly weaker. Crude oil was off sharply with equity futures also sinking in overnight trade. The US dollar was higher trying to recover from last week’s sharp sell-off.

 

Corn found strength going into the new week after Friday’s CFTC report showed funds added to their short position, creating a record large position of 265,394 contracts in managed money. In wheat, they bought back 15,000 contracts on the week, but are still just off last week’s record large short position.

 

Over the weekend, hundreds of thousands of Brazilians flooded the streets on Sunday in the biggest ever protests calling for President Dilma Rousseff's removal on corruption ties, reflecting rising popular anger that could encourage Congress to impeach the leftist leader. The Brazilian Real and stock markets there have climbed on hopes a new regime would be instituted.

 

In wheat, the weather in the Plains is expected to get cold and potentially hit a hard freeze as far south as NW TX, the OK Panhandle and N Central KS across portions next weekend. By early next week, more cold and snow is expected in Westerns KS/OK & TX. Precipitation over the weekend continued to be heavy in the Delta South, while the Eastern Plains and Central Texas got some welcomed rain. The heart of the HRW belt however, saw little if any precipitation.

 

Oil prices were under pressure to start the week. Iran indicated over the weekend that it wouldn't be interested in attending production freeze talks until it has raised output to over four million barrels per day.

 

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

March 11, 2016 | Grain Hedge Insights | Kevin McNew | Views: 659
March 11, 2016 | Grain Hedge Insights | Kevin McNew | Views: 321

Grains Continue their Rally Overnight

The US Dollar also firmed after yesterday's steep slide with S&P futures and crude also finding strength

Grains continued their rally overnight with soybeans leading the complex higher on a 4-cent advance reaching its highest mark since December. The US dollar also firmed after yesterday’s steep slide with S&P futures and crude oil also finding strength in early trade.


Brazilian soybean export premiums surged over the past week even as the lineup of vessels waiting to load soybeans at local ports swelled, raising demurrage costs as the harvest peaks, shipping agents and traders said on Thursday.  Prompt export premiums increased to 38/41 cents/bushel (buy/sell) over May futures in Chicago, from 24/28 cnt/bu a week ago, price discovery agency Certo said on Thursday. The increase in spot free onboard export prices was similarly reflected in later deliveries until August.


SRW acres across the delta and mid-south have had 10 inches of rain over a broad area this week. Some areas have had much more. This opens the door to another poor quality SRW crop but also puts some delays in corn planting in these states. The hard wheat states have a cold weather threat that starts to show in longer term forecast near the end of March. The weather to date has pushed wheat well ahead of normal development so this timing could damage wheat if the forecast comes true.


Corn had solid exports on Thursday coming in at the high end of expectations. As the US dollar continues to come under pressure in recent months, this sets the stage for a more competitive position for US exports, which should be especially beneficial to wheat and corn.

 

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

March 10, 2016 | Grain Hedge Insights | Kevin McNew | Views: 610
March 10, 2016 | Grain Hedge Insights | Kevin McNew | Views: 352

Grains Were Modestly Lower Overnight Following A Lackluster USDA Report

Weather continues to be an issue in the Plains wheat area as the latest models show a mostly dry bias.

Grains Were Modestly Lower Overnight Following A Lackluster USDA Report

Grains were modestly lower overnight following yesterday’s lackluster USDA supply and demand report. In outside markets, equity futures were higher as S&P futures took a run at the 2,000 mark again while crude oil was modestly lower, but managed to come back from steeper losses in the night session.

 

Yesterday’s USDA report showed few changes to the supply and demand tables. US corn and wheat carryout was unchanged from February after traders had been expecting an increase in stocks on weaker exports. Soybean carryout was higher thanks to a 10 MB decrease in domestic crush. In the global situation, India’s wheat crop was reduced 2.5 MMT which brought world carryout down more than expected, while USDA kept corn and soybean production unchanged for both Brazil and South America. After the close yesterday, the Rosario Grain Exchanged bumped up its forecast for Argentina’s soybean crop to 59 MMT and 24.5 MMT for corn. USDA has the crops there pegged at 58.5 and 27.0, respectively.

 

Weather continues to be an issue in the Plains wheat area as the latest models show a mostly dry bias. The forecast model run continues to suggest restricted precipitation in hard red winter wheat county over the next week to ten days which leaves a small amount of concern about the long range outlook. There is some chance of precipitation March 17-24, but it appears to be fairly light. Meanwhile flooding rain will continue into Friday in the Delta and in a part of the lowermost Midwest. Follow up precipitation during mid- to late-week next week will likely aggravate the situation. A prolonged period of dry weather will be needed before spring fieldwork can resume. Some replanting of early corn will be needed and a small portion of wheat produced in the Delta will be damaged by this week’s flooding rain.

 

Oil prices dipped on Thursday after U.S. crude hit 2016 highs the day before and Brent shot back over $40 per barrel, with analysts warning that larger gains would be unwarranted as a global glut continues to outweigh strong demand.  Expectations of more stimulus from the European Central Bank (ECB) this week, which would strengthen the dollar against the euro and potentially hamper dollar-traded oil imports, also weighed on markets. "The ECB will cut deposit rates by 20 bps (basis points) and extend its bond buying program by one year. This could be bullish for the dollar and bearish for oil," French bank Societe Generale said.

 

WEEKLY EXPORT SALES

 

                         Actual         Expected

Corn                1,192.3         800-1,200

Soybeans            478.4            400-700

Wheat                433.5            200-500

 

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

March 09, 2016 | Grain Hedge Insights | Kevin McNew | Views: 611
March 09, 2016 | Grain Hedge Insights | Kevin McNew | Views: 319

Quiet Overnight Trade Session

Grains were quiet overnight with mixed trade ahead of the USDA crop report this morning at 11 am CDT.

Quiet Overnight Trade Session

Grains were quiet overnight with mixed trade ahead of the USDA crop report this morning at 11 am CDT. Crude oil and S&P futures were up trying to get back some of yesterday’s steep losses.

Not much is expected out of the USDA report, with expectations for a modest bump in US corn and wheat carry-out due to slower than usual exports, and a potential uptick in world corn and bean carry-outs on improved production forecasts out of South America.

 

US Ending Stocks (in million bushels)

                     Expected           Range           USDA Feb

Corn                  1,854       1,812-1,887           1,837

Soybeans              452            440-466              450

Wheat                  975            951-991              966

 

World Stocks (in million metric tons)

                           Expected          Range        USDA Feb

Corn                       209.1       207.2-210.0        208.8

Soybeans                 80.9            80-80               80.4

Wheat                   238.7          236-240            238.8

 

Yesterday saw steep losses in crude oil and after the close API showed another week of building crude stocks. API data showed a third week in a row of higher than expected crude stock inventories with this week coming in 4 million barrels more than last week, versus a forecast of only a 3 million barrel build. EIA will release their official estimates at 9:30 am CDT this morning with traders looking for a 3.86 million barrel build versus last week’s huge build of over 10 million barrels.  

 

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

March 08, 2016 | Grain Hedge Insights | Kevin McNew | Views: 630
March 08, 2016 | Grain Hedge Insights | Kevin McNew | Views: 297

Grains Weak in the Overnight Trade Session

Weekly crop reports from a few key wheat states showed mostly deteriorating conditions in the face of unseasonably warm & dry weather

Grains were weaker overnight with soybeans leading the complex lower. In outside markets, crude oil pushed back from earlier losses following yesterday’s $2 a barrel rally while S&P futures fell off the 2,000 point mark in overnight trade.

 

Weekly crop reports from a few key wheat states showed mostly deteriorating conditions in the face of unseasonably warm & dry weather. The Kansas office of USDA/NASS pegged 56% of the wheat crop as good/excellent. Texas showed an increase in ratings from 40% to 42%, but still sits well off of normal for this time of year.

 

The European Commission on Tuesday forecast that EU soft wheat stocks would rise further in 2016/17 despite an expected drop in production, adding to large inventories that it already sees reaching a seven-year high in the current 2015/16 season. In its first crop forecasts for 2016/17, the Commission projected soft wheat end-of-season stocks in the European Union of 17.4 MMT, up slightly from 17.2 MMT forecast for 2015/16.

 

On Monday, USDA’s export inspections were slightly better than expectations for corn and wheat, while soybeans were at the high end of expectations. UDA will release its monthly crop forecast on Wednesday, with the consensus of analysts expecting little change in US grains carryout.

 

Crude oil continues to find strength as prices get closer to the $40 a barrel range. Oil prices surged Monday on hopes that declines in oil drilling around the world and an output deal among major producers would shrink the global glut of crude.

 

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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