January 22, 2016 | Grain Hedge Insights | Kevin McNew | Views: 220

Grains Firmed in the Overnight

Outside markets were firm as well with oil bouncing off its lows.

Grains firmed in the overnight session with soybeans leading the complex higher on 4 cent advances in early morning trade. Outside markets were firm as well with oil bouncing off its lows on a $1.50 a barrel advance and S&P futures were up 1.3%.

 

Export tender activity has heated up of late although many of the deals seem to be getting done without US participation. Notably, Egypt’s wheat deal yesterday for 235,000 MT was won by Romania, France and Russia. Prices between US and French wheat have been diverging this week thanks to the Euro’s slide against the US dollar. Current FOB prices in France are $32/MT cheaper than the US, which compares to only a $25/MT discount this time last month. India also announced the results of its corn tender which ended up going to a South Korea trading firm.

 

In South America, the next 7 days look to bring excessive moisture in parts of Northern Brazil while Argentina will see warm and dry weather. For the 7 to 14 day forecast rain should return to northeastern Argentina and southern Brazil boosting soil moisture and ending recent drying.

 

U.S. oil prices rebounded more than $1 a barrel from 12-year lows on Thursday, posting their biggest daily gain this year as rallying financial markets gave some bearish traders reason to take profits on record short positions. U.S. crude briefly vaulted back to $30 as hopes for easier monetary policy from Europe fueled a recovery in European and U.S. stock markets. Even bearish EIA crude inventory data which showed a 3.8 million barrel increase in stocks versus a 2.8 increase expected didn’t stymie the rally. Instead, the report triggered buying among traders who had feared the figures could be even worse. Still, few traders expected a quick recovery from this year's 20 percent slump, with oil under pressure from a deepening supply glut and signs of economic weakness in China.

 

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

January 21, 2016 | Grain Hedge Insights | Kevin McNew | Views: 544
January 21, 2016 | Grain Hedge Insights | Kevin McNew | Views: 265

Grains Posted Modest Gains Overnight

Outside markets saw S&P futures up.

Grains posted modest gains overnight while outside markets saw S&P futures up following yesterday’s near collapse while crude oil was hovering in unchanged territory.

 

In Argentina there are growing concerns about dryness. Net drying occurred in quite a few areas and warmer temperatures have begun to accelerate drying rates. Very warm to hot temperatures into the weekend with restricted rainfall may bring on greater dryness and some crop stress for a little while, but rain late in the weekend and more again late next week will offer a chance for relief – at least in some areas. Another week or two of dry weather could seriously impact plant development for several summer crops, but weekend rainfall and cooling temperatures should be sufficient for a little relief.

 

Consultancy Strategie Grains on Thursday, forecast a rise in the European Union's soft wheat exports next season, helped by reduced competition from rival Black Sea origins, mainly Ukraine. In its first estimate for next season's exports, the consultancy put EU exports in 2016/17 at 28.9 MMT, up from 28.1 in 2015/2016.

 

Russia's grain exports in December hit a record high of 3.8 MMT, owing to a weak rouble making Russian grain more competitive on global dollar-denominated markets, SovEcon agriculture consultancy said in a note. Due to seasonally lower demand, grain exports will decline to 1.4-1.5 MMT in January, of which between 1.1-1.2 MMT will be wheat. Grain shipments are likely to gain pace in February and March when many forward contracts signed by traders in December and January must be fulfilled, SovEcon said.

 

S&P futures were finding support early on, but yesterday’s 3.5% collapse at one-point during the trade session is sending fear throughout the financial markets. Investment managers are warning that the S&P 500, which has lost 9 percent this year, could drop another 10 percent and oil could fall as low as $20 a barrel. Jeffrey Rottinghaus, whose T. Rowe Price mutual fund beat 99 percent of rivals over the past year, also said the U.S. economy may slip into a mild recession.

 

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

January 20, 2016 | Grain Hedge Insights | Kevin McNew | Views: 817
January 20, 2016 | Grain Hedge Insights | Kevin McNew | Views: 185

Grains Were Weaker to Unchanged in The Overnight

U.S. soybeans lost ground on Wednesday, giving up some of last session's gains

Grains were weaker to unchanged overnight with soybeans giving up nearly 6 cents and wheat down 3. Going into the morning pause in trading, corn was trying to hold onto a fractional gain. In outside markets, S&P futures were off sharply, losing almost 2% of their value while crude oil was off over a $1 a barrel.

 

U.S. soybeans lost ground on Wednesday, giving up some of last session's gains as South American supply was seen hitting records despite concerns over wet harvest weather in Brazil. Yesterday, Brazil consultant Agro Consult expected a 99.2 MMT soybean crop which although slightly lower than USDA’s estimate of 100 MMT is still up from last year’s tally of 96.2 MMT. However, Agro Consult pegs Brazil’s corn crop at 85.6, well above USDA at 81.5.

 

In other news yesterday, Informa came out with forecasts for 2016 US crop acreage. They pegged corn acres at 88.9 MA which is up from 2015 acres of 88.0, while soybeans they suggest will be sharply higher at 85.2 in 2016 versus 82.7 in 2015.

 

In overnight news, there was some modest tender activity for corn and feed wheat although the deals were announced as optional-origin. Most expect the business ultimately to go to South America on the basis of lower prices.

 

Global stocks resumed their recent sell-off Wednesday as oil prices sank to a 12-year low and resurgent concerns about global growth snapped a brief bout of stabilization in financial markets. Shares in Asia and Europe were sharply lower and investors favored perceived havens such as the yen, gold and U.S. Treasury’s. Analysts said investors were spooked by further declines in oil prices and a lack of stimulus announcements from Beijing in the wake of data released Tuesday showing slowing growth.

 

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

January 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 479
January 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 210

Grains Start the Week Higher

Outside markets were recovering overnight with oil trying to claw its way back to $30 a barrel

Grains were higher to start the week with solid advances by soybeans of 7 cents and corn and wheat were up 3 to 5. Outside markets were recovering overnight with oil trying to claw its way back to $30 a barrel and S&P futures posted a better than 12% advance.

 

South Korea's Major Feedmill Group (MFG) purchased 55,000 MT of feed wheat to be sourced from Argentina in a deal on Tuesday, European traders said. Low priced Argentine wheat has made a strong reappearance in world markets after the country relaxed export restrictions, with rare sales of Argentine feed wheat to the United States also reported.

 

In Russia, wheat export prices fell further last week as the rouble dropped close to a record low against the dollar on weak oil prices. Black Sea prices for Russian wheat with 12.5 percent protein content were at $181-182 a MT at the end of last week, down $2-$3 from a week earlier, Russian agricultural consultancy IKAR said in a note. The rouble is down 6% against the dollar since the start of 2016.

 

Soybeans found support as rains in Matto Grasso, Brazil will limit harvest for the next few weeks. Also, some concerns of dryness in parts of Argentina; although the outlook does call for rain.

 

Oil prices rose more than 5 percent on Tuesday as investors viewed bullish Chinese oil demand data as a buying trigger, but contracts remained near 12-year lows as the IEA said the market should stay oversupplied this year. Traders said prices drew support from strong oil demand in China. Preliminary Reuters calculations based on government figures showed record oil consumption of 10.32 million barrels per day (bpd), up 2.5% from 2014, defying slowing growth in the world's second-largest economy.

 

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

January 15, 2016 | Grain Hedge Insights | Kevin McNew | Views: 645

Weekly Cash Comments

Weekly Cash Commentary for week ending 01/15/2016

Grain basis levels continued to remain flat this week even after the USDA report gave a spark to futures prices. Corn was up half a cent a bushel on average across the US while soybean basis was unchanged.

 

For both corn and soybeans, the only bright spot in basis this week was at river terminals. As flood waters receded this helped bring back buying interest from river terminals. Corn basis at river terminals was up 2.75 cents a bushel on average while soybean basis posted a 2.25 cent advance.

 

For end users, margins continue to be pressured which has kept basis levels in check. Ethanol basis did manage to be unchanged for the week but lagged the broader market, while soybean crushing plants dropped basis by 1-cent a bushel on average.

 

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

January 15, 2016 | Grain Hedge Insights | Kevin McNew | Views: 291

Grains Were Mixed Overnight as Soybeans Found Some Selling Pressure

Outside equity markets came under pressure overnight as crude oil fell below $30 a barrel.

Grains were mixed overnight as soybeans found some selling pressure, falling below $8.80, while corn and wheat had some modest gains in the overnights session. Outside equity markets came under pressure overnight as crude oil fell below $30 a barrel.

 

Moisture has returned to Ukraine and Russia after a very dry fall got the winter wheat crop off to a poor start. A couple of impressive storms moved from Ukraine into parts of Russia with moisture totals varied from 0.3 to 1.3 inches and where it came as snow accumulations were substantial at times with 3 to 8 inches and local totals to 15 occurring from last weekend’s storm bringing snow depths at that time up around 2 feet in a few areas.

 

On Thursday, the monthly El Nino/La Nina report from NOAA's U.S. Climate Prediction Center stated "A strong El Niño is expected to gradually weaken through spring 2016, and to transition to ENSO-neutral during late spring or early summer.” La Nina events tend to be associated with US droughts in the Midwest, so a forecast that pushes the La Nina to after the summer of 2016 would suggest a lower likelihood of drought this growing season.

 

Oil is sliding for a third week on signs Iranian exports may add to a global supply glut. Commodity producers led losses in European stocks and US equity futures suffered sharp losses overnight. Crude’s drop to a 12-year low is sending shock waves around the world. Norway sees a crisis in its industry, energy firms are laying off workers and currency markets from commodity-producing countries are in turmoil. The slump is also denting the outlook for inflation around the world, causing traders to curb bets on how far the Federal Reserve will raise interest rates this year.

 

International sanctions on Iran may be lifted Monday, allowing for a boost in oil shipments from the fifth-biggest member of the Organization of Petroleum Exporting Countries. Iran is trying to regain lost market share and doesn’t intend to pressure prices with an export increase once sanctions are removed, officials from its petroleum ministry and national oil company said this month.

 

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

January 14, 2016 | Grain Hedge Insights | Kevin McNew | Views: 569

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