January 26, 2018 | Grain Hedge Insights | Kevin McNew | Views: 452

Corn Surpassed USDA Weekly Export Sales Expectations

Grains Trading Unchanged to Higher in the Overnight Session

In the overnight session the grains are trading unchanged to higher with corn up ¾ of a cent, soybeans up ¾ of a cent, Chicago wheat up 2 ¾ cents and KC Wheat up 3 ¼ cents this morning. Chicago wheat was able to break through both the 20 and 50 day moving average and is now at the recent high January 3rd. Soybeans trade action during yesterday’s session could be seen as concerning after it was unable to hold onto it intra-day gains and closed near the days open. The March soybean contract briefly traded above $10.00 before closing at 9.91 ¼.

 

Exporters sell 125,000 metric tons of corn for delivery to unknown destinations during the 2017/2018 marketing year. -USDA

 

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Yesterday the Argentinian Agricultural Ministry revised their corn plantings estimate from 8.8 million hectares to 8.7 million hectares in their latest crop report. Soybean plantings were also revised to 16.75 million hectares, down from 16.8 million last month. The revisions were made after dryness throughout Argentina delayed plantings and in some cases prevented planting altogether. Concerns are now that the dryness in central and southern Argentina will damage yield potential.

 

South Africa is also expecting to see plantings lowered due to hot and dry conditions in the western part of its growing region. The country’s Crop Estimates Committee is expected to revise its corn acreage forecast from 2.629 million hectares to 2.159 million acres. The western part of South Africa’s growing region produces a large amount of white corn.  


 

Wheat sales were reported at 427,200 metric tons which was an improvement from the previous week and meeting trade expectations. Corn sales were reported at 1,445,900 metric tons which was down 22 percent from the previous week but above the trade expectations. Soybean sales only reported 616,300 metric tons which was below expectations and down 50 percent from the previous week.

 

Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

427

200-500

Corn - OC

1,445

900-1,250

Soybeans - OC

616

850-1,200

 

 

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January 25, 2018 | Grain Hedge Insights | Kevin McNew | Views: 507

Soybeans Rise Again as Argentina Sets for More Hot Dry Weather

Grains Trade Higher in the Overnight Session

In the overnight session the grains trade higher with corn up ¼ cent, soybeans up 3 ¼ cents, wheat up 2 ¼ cents and KC Wheat up 2 ½ cents. Corn rallied sharply yesterday and is well above the 20 and 50 day moving average as short covering powered most of the days action. Export sales will be released on Friday the 26th due to the temporary closure of the Federal Government.

 

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The weather forecast in Argentina is still looking for more precipitation in the northern part of the crop growing region with only minor shower and thunderstorms in the central and southern regions. Next week is expected to be dry which will increase stress on the crops in the central and southern growing regions.

 

Ethanol production was mostly unchanged week over week at 1.062 million barrels per day. This was another strong week following the freezing temperatures that strained logistics in the first half of January. The ethanol production for this week was 1% over last year during the same week. Ethanol stocks increased sharply this week to 1 billion gallons from 955 million last week.  

 

Chinese customs data released on Thursday showed that China imported 60 percent of its soybean from Brazil in 2017 with the U.S. accounting for only 34.4 percent of imports. Unfortunately, that was the U.S’s lowest percentage share of China’s total soybean imports since 2006. Brazil surpassed the U.S. as the primary supplier to China in 2012 and currently has an edge over the U.S due to its longer growing seasons, higher protein content and cheaper prices. Although Brazil is slightly behind normal harvest pace at this time of the year the growing season has been very favorable and the country is gearing up for another very large harvest.    

 


 

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January 24, 2018 | Grain Hedge Insights | Kevin McNew | Views: 399

Soybeans Pause after 7 Day Rally

Grains Were Up in the Overnight Session

In the overnight session the grains were up with March corn up 2 ¼ cents and soybeans unchanged, Chicago wheat up 2 ¾ cents and Kansas City Wheat up 2 ¼ cents. Corn showed traction yesterday in the market after experiencing selling pressure throughout the majority of the day and pushing as low as $3.495 but finishing close to the high of the day at $3.515. The inability for the selling in corn to hold into the close was a positive sign which was trading around its 50 day moving average and its 20 day moving average.  

 

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Kansas City Wheat is also trading higher this morning, but technically the complex is setup for strong overhead resistance at around $4.30. Both the 20 and 50 day moving averages are overhead and provided strong resistance on January 19th when prices tested those levels.

Informa economics revised its 2018 soybean planting forecast lower to 91.197 million acres from its previous forecast of 91.387 million acres. Informa also revised their U.S. corn expected 2018 corn acreage lower to 89.179 million acres from 89.675 in its previous estimates. The company also sees spring wheat seedings at 11.255 million acres and durum wheat acreage at 2.254 million acres.

 

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January 23, 2018 | Grain Hedge Insights | Kevin McNew | Views: 439

Grains Mixed in the Overnight with Corn and Wheat Down

Heavy Snow in the Midwest over the Weekend Disrupting Transportation

In the overnight session the grains were mixed with corn down ½ a cent, soybeans up 3 ½ cents, Chicago wheat down 2 cents and Kansas City Wheat down 1 ¼ cents.

 

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Heavy snow over the weekend in Northwestern Kansas, Nebraska, Western Iowa and into Minnesota dropped between 6-14 inches, stressing livestock and disrupting transportation. The snow provided welcome moisture in Kansas and Nebraska but missed the driest areas of Southern Kansas, Oklahoma and the Texas Panhandle.

 

Argentina weather is expected to bring more precipitation to the north for the rest of the week, as the central and southern parts of the growing region stay mostly dry with scattered thunderstorms. The weather models are showing that continued dryness is expected next week into the beginning of February. Weather in Brazil is expected to continue bringing favorable growing conditions to the country.

 

 

Export inspections were reported on Monday despite the government shutdown over the weekend. This week 668,946 metric tons of corn was inspected for export which was well below analyst estimates which ranged from 800,000-1,050,000 metric tons. Soybean inspections were reported at 1.419 million metric tons which was on the high side of analyst expectations and wheat inspections were reported at 337,980 metric tons which met expectations this week.


 

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January 22, 2018 | Grain Hedge Insights | Kevin McNew | Views: 491

US Government Shutdown will Impact Timing of Reports this week

Grains Trade Higher in the Overnight

In the overnight session the grains traded higher. Concerns about dryness in central and southern Argentina, a weaker U.S. Dollar and strong weekly export sales are all helping to support grain prices at the start of the week. The U.S. government is still shutdown which will impact the timing of reports this week starting with the export inspections on Monday.

 

Heavy rains fell over the weekend in the northern crop growing regions of Argentina including Chaco, North West Corrientes, eastern Santiago Del Estero and Northern Santa Fe. As much as 12.44 inches of rain fell in parts of Chaco with 5-8 inches falling in other parts of the region. Despite the heavy rains in the northern part of the growing region the forecast looks to bring more dry weather in the central and southern parts. The next two weeks look to bring more hot dry weather to areas that already has marginal subsoil moisture.

 

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Brazil harvest is off to a slow start this year due to delayed planting at the beginning of the season. Analysts estimate Mato Grasso’s soybean harvest is  between 2.8 and 3.29 percent complete compared to 11.49 percent last year during the same period. Mato Grosso is usually the first state to begin harvesting in Brazil. This slight harvest delay may be helpful for U.S exports in the short run, but reports of strong yields may have a more negative effect on U.S. soybean prices once harvest is fully ramped up.

 

     

 

Basis for both corn and soybeans increased last week across the U.S. The national average soybeans basis advanced .7 cents and corn basis increased 1.5 cents. Soybean crush plants increased basis by an average of 2 cents, while river terminals lowered soybean basis by 2 cents. Ethanol plants were steady this week with river terminals corn basis edging up a penny.  

 

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January 19, 2018 | Grain Hedge Insights | Kevin McNew | Views: 537

Chicago Soybean Futures Rise for a Fifth Straight Session on Friday

Grains Trade Higher in the Overnight Session

In the overnight session the grains traded higher with corn up 1 ½ cents, soybeans up 3 ¾ cents, Chicago wheat up ¾ cent and Kansas City wheat up 1 ¾ cents.

 

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Ethanol production rebounded sharply this week with production increasing to 1.061 million bushels per day, up from 996 bpd recorded last week. The warmer temperatures across the US helped lower the stress on the supply and distribution logistics. The rebound brought production back above last years pace during the same week. Ethanol stocks were mostly steady at 955 million gallons compared to 954 million gallons last week. Ethanol stocks are still seasonally very strong at about 7.7 percent above last years levels.

 

Yesterday it was announced by the Buenos Aires Grain Exchange that 2017-18 soybean plantings estimates may be revised lower again due to the dryness in the northwestern parts of Argentina. This region represents roughly 30 percent of soybean plantings and they are behind schedule getting the crop into the ground.

 

Export sales were strong this morning for corn and soybeans but wheat missed analyst expectations. Corn sales booked 1.888 million metric tons this week which was up significantly from the previous week and well over analyst expectations. Soybean export sales increased by 31 percent over last week, beating expectations and booking 1.240 million metric tons. Wheat sales were disappointing compared to expectations but was higher than last weeks totals.


 

Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

153

200-500

Corn - OC

1,888

500-800

Soybeans - OC

1,240

600-1,000

 


 

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January 18, 2018 | Grain Hedge Insights | Kevin McNew | Views: 421

Snow in Central Plains/NW Midwest early next Week will Provide Beneficial Moisture

Grains Traded Lower in the Overnight

In the overnight session the grains traded lower with corn down ½ a cent, soybeans down 1 ½ a cent, Chicago wheat up 2 cents and Kansas City wheat up 1 ¼ cents. Corn rallied 4 cents higher yesterday after it was unable to push to new lows after the relatively bearish WASDE report last Friday. With sentiment being relatively bearish the fact that corn was unable to push to new lows triggered short covering in yesterday's session. March corn prices are now firmly up against the 50 day moving average which has acted as resistance in October, November, December and most recently January 3rd.   

 

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Strategie grains lowered their forecast for European Union soft wheat exports to 21.6 million metric tons, down 750,000 metric tons from last months forecast. This revision primarily affects France and Romania exports which were each revised about 300,000 metric tons lower. The revision comes after the massive Russian wheat harvest continues to dominate the global export trade.

The International Grains Council raised its 2017/18 global corn forecast by 14 million metric tons to 1.054 billion metric tons. The revision was a result of increased European Union, China and Nigeria production estimates. The organization also revised its 2017/18 wheat production higher by 8 million metric tons to 757 MMT.   

 

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January 17, 2018 | Grain Hedge Insights | Kevin McNew | Views: 355

Minimal Winterkill Overnight, As Snow Protected Coldest Areas of E Kansas and W Missouri

Grains Mostly Unchanged in the Overnight Session

In the overnight session the grains were mostly unchanged with corn up ½  of a cent, soybeans unchanged, Chicago wheat unchanged and KCBT wheat up ½ of a cent.

 

Exporters sell 130,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year. -USDA

 

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Yesterday the National Oilseed Processors Association reported the amount of soybeans crushed by its members in December. The organization is made up of 13 members which account for roughly 95% of the soybean crushed in the US. This months report showed a record high 166.382 million bushels which was a record high and well above analyst expectations of 165.385 million bushels. Soybean oil stocks were reported at 1.538 billion pounds at the end of December which was well above analyst estimates of 1.381 billion pounds.

 

On Wednesday Brazilian Agriculture Minister Blairo Maggi said that his country is looking into removing a 20 percent tariff on ethanol imports from the United States. The decision could hinge on the US lifting the ban on fresh beef exports from Brazil.

 

Export inspections were reported at 1.231 million metric tons of soybeans, 368,651 metric tons of wheat and 584,389 metric tons of corn. Export inspections missed expectations for corn but was within analyst estimates for wheat and soybeans.

 

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January 16, 2018 | Grain Hedge Insights | Kevin McNew | Views: 499

Wheat Prices Drop to One Month Low on Large US Plantings

Corn and Soybeans Trade Higher in the Overnight Session

In the overnight session corn and soybeans are trading higher as wheat stumbles. March corn is up 2 cents, March soybeans are up 5 ¾ cents, March Chicago wheat is down 3 ¼ cents and Kansas City wheat is down 4 ¾ cents this morning.

 

Kansas City wheat broke through the 50 and 20 day moving average with strong volume on Friday after the Seedings report showed larger than expected wheat acres planted throughout the U.S. The USDA announced that 32.608 million acres were planted to wheat which was above the analyst expectations which ranged from 31.1 to 32 million acres.  

 

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Weekend precipitation in Argentina was good, but coverage and amounts were variable across the major crop growing regions. Between 1 to 2 inches of precipitation was observed over the weekend throughout Cordoba and Santiago del Estero, but other areas in Western and central Buenos Aires, La Pampa and southern Cordoba saw less than .6 inches. Net drying occured in the areas that received less moisture as temperatures soared in the 90’s and 100’s on Friday. By the weekend, temperatures moderated with highs in the 70’s and 80’s. Although rains were received throughout Argentina there are still signs of crop stress and a reduction in yield potential. More widespread precipitation is needed to improve the yield outlook.

 

Last week’s commitment of traders report showed that managed money increased their net short position in corn futures and options by 23,940 contracts to 222,516. Money managers also increased their net short soybean position by 7,329 in futures and options to 92,835 contracts. Managed money also increased their CBOT wheat short position in futures and options by 813 contracts to 128,990. KCBT wheat net short position declined by 11,360 contracts to 17,600.


 

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January 12, 2018 | Grain Hedge Insights | Kevin McNew | Views: 499

Snow in the Midwest will help most of the Wheat from Cold Push

Grains Trade Slightly Higher in the Overnight

In the overnight session the grains traded slightly higher with March corn up 1 cent, March soybeans up ½ of a cent and March wheat unchanged. Argentina is still expected to receive rain today and tomorrow which is expected to start in the south and move northward. Follow-up precipitation is in the forecast between January 20-25th.

 

Exporters sell 320,000 metric tons of corn for delivery to unknown destinations during the 2017/2018 marketing year. -USDA

 

Today is a very important day for price direction with the USDA releasing the January WASDE report, the Quarterly Grain Stocks and the Winter Wheat Seedings report. Below are the analyst expectations.


 

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Winter wheat seedings is expected to show that farmers only planted 31.307 million acres, down from 32.696 million acres in 2017. The range of analyst estimates goes from 30.100 million acres to 32.0 million acres. The smallest ever winter wheat planted area was in 1909 when only 29.196 million acres was seeded.

 

Expectations are for ending stocks to be revised higher for soybeans and lower for corn and wheat. The average analyst guess for soybean ending stocks 472 million bushels which is an increase from 445 million bushels in the December report. The revision higher is anticipated due to the slower than needed pace of soybean exports this year. Corn ending stocks are expected to decline slightly to 2.431 billion bushels compared to 2.437 billion bushels in the December report. Wheat ending stocks are expected to decline slightly to 959 million bushels from 960 million in December.

 

Analysts are expecting that the USDA will increase the 2017-2018 soybean production estimates in Brazil to 110.27 million metric tons from December's estimate of 108 million metric tons. Argentina production will most likely be revised smaller due to the dry conditions which have delayed planting. Analyst expect Argentina corn production to slip to 39.9 million metric tons from 41.5 million in December and soybean production to slip to 52 million metric tons compared to 54.5 million metric tons in Dec. If realized that would be the smallest soybean crop out of Argentina in five years.        


 

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