December 16, 2016 | Grain Hedge Insights | Kevin McNew | Views: 309

Weekly Cash Commentary

Weekly Cash Commentary for week Ending 12/16/2016

On average corn was off 1 3/4 cents, breaking a five week streak of higher movement. Ethanol plants moved lower as well, off 1 1/2 cents per bushel. US ethanol margins have firmed of late with spot ethanol seeing a big move higher on Monday. With a strong spot margin for ethanol production, a lot of plants should expand expand capacity in the short-run, but it may be short-lived as forward margins are much weaker. Corn along the river saw the biggest drop, losing 2 1/4 cents.

 

Soybeans saw minimal movement this week gaining an average of 1/2 cent per bushel. Crush facilities were the biggest movers gaining 1 1/4 cents. Yesterday brought news of under performing US crush in November. NOPA pegged the soybean crust at 160.7 MB and a high figure of 162 had been expected by the trade. Soybeans along the river also moved slightly higher by 1/2 cent.  Informa Economics continued to ratchet up their US soybean acre forecast for 2017, calling it at 88.8 million. If realized, that would amount to a 5.1 million acre build in soybean acres.

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Corn_2016_12_16

December 16, 2016 | Grain Hedge Insights | Kevin McNew | Views: 269

Expected Soybean Planted Acres on the Rise

Grains found modest support overnight while the US dollar slipped slightly following yesterday’s surge to 13 year highs. Crude oil and equities were firmly in positive territory heading into the morning session.

Expected Soybean Planted Acres on the Rise

USDA announced a 205,000 MT sale of soybeans to unknown destinations.

 

Yesterday brought news of under performing US crush in November. NOPA pegged the soybean crust at 160.7 MB and a high figure of 162 had been expected by the trade.

 

Informa Economics continued to ratchet up their US soybean acre forecast for 2017, calling it at 88.8 million. Likewise, they dropped corn acre projections for 2017 to 90.2. If realized, that would amount to a 5.1 million acre build in soybean acres and a 4.3 million acre drop in corn.

In weather, Argentina is expected to see a widespread rain event in the 5-day forecast covering half of the country. What is now considered to be 50% of the crop area is considered dry, but after these rains that area should drop to only 15%.

December 15, 2016 | Grain Hedge Insights | Kevin McNew | Views: 500
December 15, 2016 | Grain Hedge Insights | Kevin McNew | Views: 225

US Dollar Hits New Highs

The US Federal Reserve raised Interest Rates by a Quarter Point on Wednesday

US Dollar Hits New Highs

Grains continued to grind lower overnight and the US dollar hit new heights bolting higher by 1.3%.

 

USDA announced a 132,000 MT sale of soybeans to China this morning.

 

Weather models continue to point to favorable rain potential in Argentina starting this weekend. The market is gaining confidence as the forecasts
have held up and the rain event is now days away instead of a week out.

 

NOPA Nov crush will be announced this morning with expectations of 162 MB vs 164.6 in Oct and 156.1 last year. This is a slight increase in daily crush rate over October but could be the largest daily crush for the year.

South Korean state agency Agro-Fisheries & Food Trade Corp. has issued an international tender to purchase some 90,000 tonnes of GMO-free soybeans free of genetically-modified organisms (GMOs), European traders said on Thursday. The soybeans are sought in three consignments of 30,000 tonnes from optional origins for 2018 arrival. Japan's Ministry of Agriculture bought a total of 122,847 tonnes of food quality wheat from the United States and Canada in a regular tender that closed late on Thursday.

 

Weekly Export Sales-

                                     Actual          Expected

Corn                               1,516          800-1,100

Soybeans                        2,008       1,100-1,500

Wheat                               531             300-500


 

The U.S. Federal Reserve raised interest rates by a quarter point on Wednesday and signaled a faster pace of increases in 2017 as the Trump administration takes over with promises to boost growth through tax cuts, spending and deregulation.

 

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

December 14, 2016 | Grain Hedge Insights | Kevin McNew | Views: 249

NOPA Nov Crush will be announced on Thursday

Grains were Lower Overnight

NOPA Nov Crush will be announced on Thursday

Grains were lower overnight as equities and crude oil also traded into negative territory going into the morning break.

 

US ethanol margins have firmed of late with spot ethanol seeing a big move higher on Monday. With a strong spot margin for ethanol production, a lot of plants should expand expand capacity in the short-run, but it may be short-lived as forward margins are much weaker.

 

China cash meal has been firm for a while with big feeding margins on hogs and what is seen as a slight delay in bean imports. Chinese imports of soybeans for the last quarter of 2016 are expected to be slightly bigger than last year. The Chinese government has closed 6 to 8 bean crushing plants in Guangdong to help control pollution. They have been given a week to develop plans to control emissions. The plants combined crush about 775 TMT a month.

NOPA Nov crush will be announced Thursday with expectations of 162 MB vs 164.6 in Oct and 156.1 last year. This is a slight increase in daily crush rate over October but could be the largest daily crush for the year.

Fed policymakers will announce their interest rate decision today, which is expected to show a quarter point rise. The market will be looking for clues in the Fed statement about what might happen to rates going forward in 2017.

 

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

December 13, 2016 | Grain Hedge Insights | Kevin McNew | Views: 463
December 13, 2016 | Grain Hedge Insights | Kevin McNew | Views: 204

Grains Were Listless in the Overnight

Crude Oil Pushes Higher

Grains were listless overnight showing no directional bias in light trade. In outside markets, crude oil pushed higher as did US equity futures and the US dollar.

 

China's soymeal futures jumped to a five-month high on Tuesday amid talk that environmental regulators have launched a crackdown on 3 plants in one of the nation's largest crushing regions, fueling concerns about supplies as stocks dwindle. They are expected to be closed one to two weeks.

 

France's farm ministry on Tuesday estimated the area sown with winter soft wheat for the 2017 harvest at 5.2 million hectares, up 0.2 percent compared with this year. A group of animal feed makers in the Philippines has issued an international tender to purchase up to 56,000 tonnes of feed wheat to be sourced from Australia or the Black Sea region.

 

China appears ready to resume corn exports for the first time in around a decade as farmers turn to cheaper sorghum for animal feed and corn stockpiles grow at home. Beijing granted export permits in September to at least two companies, including state grain concern Cofco. Some 2 million tons are expected to be shipped out for the time being.  China is said to be holding one year’s worth of production in excess storage.

Fed policymakers begin meeting today in what is expected to lead to an interest rate hike on Wednesday’s announcement. Traders, however, will be looking for clues in the Fed statement about what might happen to rates going forward in 2017.

 

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

December 12, 2016 | Grain Hedge Insights | Kevin McNew | Views: 513
December 12, 2016 | Grain Hedge Insights | Kevin McNew | Views: 212

Grains Start Sunday Night in Positive Territory

Equity Futures were Mixed

Grains started Sunday night in positive territory but reversed lower overnight. Crude oil got a shot from expected further cuts in oil, while equity futures were mixed and the US dollar was lower.

 

USDA announced the sale of 256,000 MT of soybeans to China and 100,000 MT of milo to China.

 

Argentina did not see much rain over the weekend but C Brazil rains improved moisture in drier corn/soy areas. The 6 to 10 forecast shows big rain potential. In the near-term temps are rising and about a third of grain growing areas are dry.

 

Friday’s crop report was neutral to negative, but on the world front global supplies and stockpiles continued to balloon with big jumps in wheat and corn carryouts. USDA still has a big estimate for US corn feed use, with USDA expecting a 10% increase in corn for feed, but across the board US livestock production shows only modest 2 to 4% growth in production figures in 2017.

 

Saudi Arabia's main state grain importer, the Saudi Grains Organization (SAGO), said on Monday it has bought 725,000 tonnes of hard wheat.
A tender closed on Friday for 715,000 tonnes of wheat. Accepted origins were from the European Union, North and South America and Australia, at the seller's option. India is expected to bolster wheat imports after eliminating their import duty on Friday. Expectations are for an extra 2 MMT of imports from India, but in the big wheat picture that will have no lasting impact. USDA on Friday raised global wheat stocks by nearly 3 MMT to 252 MMT.  

Oil rose by as much as 6.5 percent on Monday to an 18-month high after OPEC and some of its rivals reached their first deal since 2001 to jointly reduce output to try to tackle global oversupply and boost prices. On Saturday, producers from outside OPEC, led by Russia, agreed to reduce output by 558,000 bpd, short of the target of 600,000 bpd but still the largest contribution by non-OPEC ever.

 

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

December 09, 2016 | Grain Hedge Insights | Kevin McNew | Views: 178

Weekly Cash Comments

Weekly Cash Commentary for week ending 12/09/2016

The cash markets showed mixed movements this week.

 

On average corn gained 2 1/2 cents, for a fifth consecutive week of gains. Ethanol plants saw positive movement as well up 2 1/4 cents per bushel. China is aiming to produce 4 million tonnes of ethanol by 2020, doubling output from the current level, even as it keeps tight control over the use of food grains, a government plan showed on Monday. Corn along the river was the leader to the upside this week up 5 1/4 cents. Corn exports were notably good this week coming in 400,000 MT above expectations at 1,495,000 MT.

                         

Soybeans were off 1/2 cent this week, continuing to fluctuate from week to week. Crush facilities were off as well losing an average of 1 1/2 cents per bushel. Beans along the river were the leader to the downside, off 1 3/4 cents. Although cash markets have dropped, foreign demand for soybeans remains strong and has provided some support to the bean market.

 

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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