February 28, 2017 | Kevin McNew | Views: 210
February 28, 2017 | Grain Hedge Insights | Kevin McNew | Views: 288

Winter Wheat Ratings are out for Select States

US Dollar Continues to Weaken

Turnaround Tuesday was in check this morning with grains turning higher in early trade as beans lead the complex with an 8-cent advance. The US Dollar continued to weaken as did crude oil adding to yesterday’s losses.

 

Winter wheat ratings were out for select states after the close on Monday. HRW wheat states continue to see poor conditions especially in the Southern Plains relative to last year. The outlook for moisture in the next month is limited with temperatures expected to be above normal, helping push the crop out of dormancy.

 

Winter Wheat Crop Conditions (Good-to-Excellent Rating)

 

State

  % G-E Feb

  % G-E Jan

   % G-E Last Year

CO

  40

  36

   45

IL

  72

  74

   58

KS

  43

  44   

   59

MT

  51

  70

   53

NE

  44

  47

   59

ND

  81

  82

   55

OK

  43

  33

   68

SD

  57

  62

   69

TX

  34

  30

   40

 

 

Egypt was in the market overnight for wheat with the lowest offer submitted being French wheat at $197; the results should be out later today. Iraq was also in the market for wheat while a South Korea feed buyer was shopping for soymeal.

 

China’s crush rate has been ticking up as hog profitability has improved slightly. Imports of soybeans into China are expected to be a strong 7 MMT when published at the end of March. Brazilian FOB bean prices continue to hold firm at a $2.5/MT premium to US FOB prices vs last year when Brazil was at a $12/MT discount. Slow farmer selling in Brazil continues to keep bean supplies to the world market somewhat limited.


 

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

February 27, 2017 | Kevin McNew | Views: 280
February 27, 2017 | Grain Hedge Insights | Kevin McNew | Views: 274

POTUS Economic Agenda speech set for Tuesday

Grain Markets Show Little Direction to Start the Week

Grain markets continued to show little direction to start the week as soybeans were higher while wheat was lower. Corn spent most of the night session fractionally higher. In outside markets crude oil was higher.

 

On Friday, USDA’s cattle on feed numbers matched closely what analysts had been expecting. The February Cattle on Feed inventory was reported at 10 Million head, 101% of a year earlier while January placements were 111% of a year earlier.
 

Palm oil continued to sell-off overnight as did China’s soybeans. On Friday, January soybean imports into China were reported at 7.66 MMT That’s off from 9.0 last month but above the 5.6 imports of January 2016. Marketing year-to-date China's soy imports are up 5.5% over the same 5-month period last year while USDA has penciled in a 3.3% advance for the year.

 

South America weather was yet again favorable over the weekend. Weekend rains favored north 1/2 Brazil corn/soy. Center-West Brazil rains are expected this week to support safrinha corn. The 6-15 day rains cause minor fieldwork interruptions farther south. In Argentina, weekend showers favored S. & far W. The 6-10 day shows a break in rain which should allow wet spots in NW Buenos Aires to ease.

The dollar edged up from a 2-1/2-week low on Monday but traders await guidance from U.S. President Trump on his economic agenda. Trump is set make his first major policy address to the U.S. Congress on Tuesday, and is expected to give some details on his planned infrastructure spending and tax reform.  Traders will look for action plans vs vague ideas in the speech after 3 months of banking on Trump’s economic stimulus trade.

 

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

February 24, 2017 | Kevin McNew | Views: 243
February 24, 2017 | Grain Hedge Insights | Kevin McNew | Views: 176

Weekly Cash Comments

Weekly Cash Commentary for week ending 02/24/2017

Grain basis was mostly flat this week even with a sharp sell-off in futures prices.

 

In corn, there was some modest strength in Western Cornbelt processors. River terminals however saw more strength as basis levels improved 2 cents a bushel on average.

 

Conversely, soybean basis slipped by 1 cent a bushel while soybean plants were mostly unchanged for the week.

 

First notice day for grain is on Tuesday which will see grain buyers rolling out of March contracts.  With little need for extra pipeline supplies it seems likely that buyers may use the roll to reduce basis.

 

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

February 24, 2017 | Grain Hedge Insights | Kevin McNew | Views: 293

Grains Mixed in the Overnight with Soybeans Turning Higher

Crude Oil and the US Dollar were Lower

Grains were mixed overnight with soybeans turning higher for the first time in 6 days while wheat and corn dipped lower. In outside markets, crude oil and the US dollar were lower in early trade.

 

USDA’s Ag Outlook Forum released carryout estimates for the 2017 US crops. Yesterday, USDA forecasted corn plantings at only 90 million acres, off 4 million from last year but this morning’s carryout projections show only a slim 105 MB drop in ending stocks to 2,215 MB from the current year forecast of 2,320. In soybeans USDA keep ending stocks the same year-on-year at 420 MB even with a 4.7 million acre increase as they expect soy yields to average 48 vs 52 last year. Wheat did see a sharp drop in carryout which USDA pegs at 905 MB for next year vs 1,138 this year.

 

In South America, rains favored central and southern Brazil yesterday benefiting drier corn/soy areas with harvest interruptions very limited. This weekend rains will shift to the drier NE. Central and west Brazil should have limited rains until mid next week aiding corn/soy harvest and safrinha seeding. Showers were isolated in Arg. corn/soy yesterday but late next week should see new moisture aiding corn/soy filling but raising risk of early harvest delays.

Export sales were disappointing for both corn and beans as old- and new-crop deals were below trade expectations.  

 

Weekly Export Sales-

 

Actual

Expected

Wheat - OC

451

350-550

Wheat - NC

256

0-50

Corn - OC

743

800-1,100

Corn - NC

264

300-500

Soybeans-OC

413

550-850

Soybeans-NC

28

100-300

 

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

February 23, 2017 | Kevin McNew | Views: 288
February 23, 2017 | Grain Hedge Insights | Kevin McNew | Views: 265

Grains Dipped Lower in the Overnight

Crude Oil Rallies into the mid-$54 Mark

Grains Dipped Lower in the Overnight

Grains dipped lower overnight as the prospect of a big South American harvest looms over the complex. In outside markets, crude oil rallied into the mid-$54 mark ahead of fresh data from EIA on crude stocks.

 

Yesterday after the market close Agroconsult pegged the Brazil soybean harvest at 107.8 MMT vs its previous forecast of 105.3 MMT and above the latest USDA figure of 104. Likewise, the boosted corn output to 93 MMT well above USDA at 86.5 MMT.

 

This morning USDA’s Ag Outlook Forum kicked off with USDA forecasting US corn plantings at 90 million acres in 2017 vs 94.0 planted last year. For soybeans, USDA penciled in a 4.6 million acre increase to 88 million while wheat acres are expected to fall to 46.0 vs 50.2 last year. These estimates are not based on surveys but instead on analyst forecasts.

 

Delays in corn shipments from the US appear to be giving China an opportunity to deal corn to Japan and South Korea. One deal is close and talks have begun on two more, sources said, with China benefiting from its close proximity to big Asian customers and bulging stockpiles left over from a now-abandoned farmer support scheme. Although the volumes are small, it still is a bearish development at a time of huge US stockpiles and strong export demand in the past 6 months from the US.

 

EIA crude stocks are expected to grow 3.5 million barrels according to an average of industry analysts. Last week’s inventory was up 9.5 million barrels and 6 weeks in a row stock levels have come in higher than industry expectations.

 

Over the last week US export competitiveness has generally improved. The ongoing strength in the Brazilian Real continues to help the US competitive position in corn and soybeans against Brazil.

 

WORLD EXPORT PRICE SPREADS RELATIVE TO US

 

Crop

Country

Today

Last Week

Last Year

CRN

BRZ

-$20.0

-$20.9

-$21.9

CRN

EUR

+$1.6

-$0.9

-$21.2

SBN

ARG

-$5.2

-$6.4

-$31.3

SBN

BRZ

+$2.5

+$1.3

-$22.1

WHT

EUR

-$11.9

-$20.8

-$45.9

 

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)

February 22, 2017 | Grain Hedge Insights | Kevin McNew | Views: 317

Traders Await Acreage Forecasts from USDA Forum

US Soybeans edge up on Wednesday

US soybeans, wheat and corn rose on Wednesday as traders took positions ahead of a USDA forum this week which is expected to shed light on what crops US farmers are planting for this summer’s harvest. But, gains were limited by huge new soybean crops expected in South America.

 

US soybeans edged up for the first time in four sessions on Wednesday to move away from a three-week low, though ample global supply capped gains.

 

Traders are awaiting acreage forecasts from the USDA forum to gauge an expected drop in US wheat sowings and a shift from corn towards soybeans. There are very wide ranging ideas about what the changes in US sowings will be this season, with estimates of the switch from corn into soybeans from 2 million acres to as much as 5 to 6 million acres.

 

The US has crushed an unprecedented amount of soybeans since the harvest began last fall, but there have not been as many buyers as processors had hoped for, and this could end up burdensome on domestic soybean supply. Data released by the National Oilseed Processors Association showed that its members crushed 160.621 million bushels last month, which marked the third busiest January on record and edged analyst estimates of 159.141 million.

 

The government report Export Inspections of US wheat in the latest week at 558,252 tonnes, topping a range of trade expectations for 350,000 to 550,000 tonnes. Corn inspections were 1,152,233 and soybeans came in at 1,076,390.


 

A Libyan state grain buying agency has again delayed the offer deadline in an international tender to purchase 100,000 tonnes of milling wheat, 50,000 tonnes of durum wheat and 75,000 tonnes of yellow corn this time to February 28th European traders said on Wednesday. The deadline for the tender, which also seeks 75,000 tonnes of feed barley and 25,000 tonnes of soymeal was February 19.

 

Brazil rain favored Rio Grande do Sol & Mato Grosso yesterday, not excessive but persists through the week; rains increase in C-S Brazil through the weekend and early next week expanding minor harvest delays. Showers expand to ease dryness in NE Brazil; locally heavy rain fell in S Buenos Aires in Argentina yesterday but excessive wetness still very limited.

 

Global stocks hit record highs on Wednesday, topping 2016’s gains just two months into 2017, while the dollar rose before Federal Reserve; minutes that will be scoured for clues about the next US interest rate rise.


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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