August 02, 2017 | Grain Hedge Insights | Kevin McNew | Views: 295

Hard Selling Across the Board in Grains Yesterday

Overnight Session Trades Higher

In the overnight session the market traded higher after hard selling across the board in the grain complex yesterday. Yesterday morning’s GFS weather model showed little change in temperature patterns throughout the US but showed slightly drier conditions are expected in Iowa, Illinois and Indiana with probability leaning toward slightly wetter conditions in Minnesota, Missouri and Wisconsin.

      

The Grain Crushings and Co Products report released yesterday showed that corn consumed for alcohol and other was 490 million bushels in June ‘17, down 4 percent from May but up 2 percent YOY. Corn used for fuel alcohol which is the largest line item in the report showed 437 million bushes were used in June down 3 percent from May but up 2 percent from June 2016.

 

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It was announced yesterday that 154.1 million bushels of soybeans were crushed in June which was outside the range of estimates and well above the average analyst guess of 146.9 million bushels in a Reuters poll.

 

FCStone released their August crop survey results which showed corn at 162.8 bushels per acre compared to the July WASDE estimate of 170.7. Their crop survey pegged soybean yield at 47.7 bpa compared to 48 bpa in the latest WASDE report.

Yesterday’s selling pressure drove December Corn to $3.76 ¾ by the close, leaving the June 23rd low of $3.74 unbroken and still likely to provide support. November Soybeans fell sharply yesterday closing the day at $9.70 ½ which is the high side of the consolidation pattern that formed between April 17th and May 17th. In the short term the $9.70 level could provide support for soybeans but the most notable area in the November soybean chart landscape is the gap in price action between June 30th and July 3rd when prices jumped from $9.52 ½ to $9.63 ½. That gap area should provide some support if prices retrace further.  

 

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August 01, 2017 | Grain Hedge Insights | Kevin McNew | Views: 193

Grains Trade Lower in the Overnight Session

Grain Crushings Report Out Today at 2 pm

In the overnight session the grains traded lower after the crop progress report showed soybeans and corn conditions slightly above market expectations. Corn condition was reported at 61% good-to-excellent down one percent from last week. Soybeans condition was 59 percent good-to-excellent up two percent from the previous week. Spring wheat conditions deteriorated last week falling to 31 percent good-to-excellent, down 2 percent from last week.

 

At 2 PM today the USDA will release its Grain Crushings report which gives monthly totals for agricultural products consumed in dry and wet mill production. According to a Reuters poll of six analysts the average trade estimate for soybeans processed in June is for 146.9 million bushels with estimates ranging from 146 million bushels to 148 million bushels. If realized this would be a 7 percent decline from May. The reuters poll also estimated June soyoil stocks to be 2.24 billion pounds.

On July 17th, the NOPA crush report estimated that its members, who account for 95% of US soybean crush, processed 138.074 million bushels of soybeans in June, down from 149.246 million in May. The NOPA crush report also showed that soyoil stocks declined to 1.703 billion pounds, down from 1.749 billion in May.      

 

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Weather forecasts in the 1-5 day time frame continues to look cooler which should be supportive of a crop that often times can deal with heat stress during this time of the year. Precipitation will benefit many growing regions this week with the exception of Iowa, the western Dakotas and Montana. Weather in China’s corn growing regions also looks favorable over the next 10 days with temperatures ranging from 1-3 degrees above normal with abundant precipitation in the forecast.   

 

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July 31, 2017 | Grain Hedge Insights | Kevin McNew | Views: 172

Cooler Temperatures Across the Mid West This Week

Grains Traded Lower in the Overnight Session

In the overnight session the grains traded lower pressured by some weekend rains and a milder weather forecast.

 

USDA reported a sale of 150,000 metric tons of corn for delivery to Columbia for the 17/18 marketing year.

 

Corn traded down 5 1/4 cents, soybeans down 14 cents and wheat down 4 ½ cents. September corn is now approaching support around 3.64 ½ from the low which was back on June 23rd. This support marks the low side of the range that corn has traded since the beginning of June.

 

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The latest weather models show cooler temperatures across the midwest  into the middle of this week. Precipitation is forecast to be normal this week with above average moisture expected in the Texas panhandle, Southern Kansas, Oklahoma and Missouri by the weekend. The Dakotas and Minnesota showed some slight improvement in the precipitation outlook.    

The commitment of traders report released on Friday showed that for the week ending July 25th large speculators cut their net long positions in Corn by 1,434 contracts to 45,746. Wheat speculators also saw net selling by 9,951 contracts to reach a net short position of 31,337. Soybean speculators trimmed their net short position by 11,977 contracts to just 156.

 

The crop conditions report will be released after the market close and the trade is looking for a slight improvement in the good-to-excellent rating in corn, unchanged in soybeans and a decline in spring wheat.  

 

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July 28, 2017 | Grain Hedge Insights | | Views: 145

Wheat Quality Council Estimates Are In

On Thursday, the International Grains Council cut its 2017-18 global production forecast for corn, wheat and barley. The revisions were made as a result of the dry weather in North America, Europe and Australia. The IGC revised its global corn production down to 1.02 billion metric tons. The revision was primarily due to cutting US production estimates by 5.6 million metric tons and EU production by .7 metric tons. The IGC increased the Brazil 2017-18 corn crop up by 1.5 million metric tons.

 

The IGC also lowered global wheat production estimates by 3 million metric tons to 732 due to a decline in expectations from US, Australia and the EU. The Russian wheat crop was revised three million metric tons higher in their projections to 71 million metric tons.  

 

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The Wheat Quality Council estimated their official Spring wheat yield on Thursday after traveling North Dakota, South Dakota and Minnesota for three days. Spring wheat yields were estimated at 38.1 bushels per acre, down 2.2 bpa from the July 12th USDA estimates of 40.3 bpa. The wheat tour does not estimate total production because it is still early to estimate harvested acres. Abandonment will be a real wild card especially in the western part of the spring wheat region. Crop yields looked good to the east and steadily got worse as the tour moved west. In western North Dakota tour scouts noted that some wheat had already been baled for hay. The Spring wheat tour did not enter Montana which has been in significant drought much of the growing season.

 

The Ministry of France announced on Thursday that tariffs will be raised on beef imports into Japan, a key U.S trading partner. The tariff will increase from 38.5 percent to 50 percent and was automatically triggered after beef imports from all nations and from countries who do not have an economic partnership agreements increase more than 17 percent from the year earlier. Australia which provides a large amount of Japan’s imported beef will be exempt from this tariff because of their existing economic partnership agreement. This is the first time since 2003 that this automatic tariff has been triggered.

 

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July 27, 2017 | Grain Hedge Insights | Kevin McNew | Views: 226

Dollar Feels Pressure after FOMC Statement

Grains Traded Higher in the Overnight Session

In the overnight session the grains traded higher with uncertainty still surrounding the impact of the hot and dry weather. December corn up 3 1/4, November Soybeans up 8 and Chicago Wheat up 5.

 

The EIA ethanol numbers released on Wednesday showed a drop in week over week production by 14 thousand barrels per day to 1.012 million BPD. Weekly ethanol stocks also fell by 608,000 barrels to 21.529 million BPD. To meet the UDSA’s corn used for ethanol projections we will need to see ethanol production pace pick back up and run 3-5% above last year’s levels for the remainder of the marketing year.   

 

The dollar also felt pressure yesterday after the FOMC statement suggested that both overall and core inflation had declined and that the fed will start unwinding the balance sheet “relatively soon”. The language seemed to give traders the impression that there is no increased risk for a rate hike between now and December which will put pressure on the USD.     

 

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Day 2 - Wheat Crop Tour

Spring wheat crops in central northwestern North Dakota were showing the effects of hot and dry conditions and yield prospects were down sharply from a year ago, scouts on the annual crop tour said Wednesday.

 

The early-planted stuff looks the toughest, said Dave Green, executive vice president of the Wheat Quality Council, which runs the tour. Prospects were slightly better for later-planted wheat and crops in northern areas could still benefit from moisture with harvest still a few weeks away.

 

Scouts in west-central ND scouted five spring wheat fields and calculated an average yield of 21.3 bushels per acre. A year ago, scouts on the same route calculated average yields of 61.8 and 52.7 bpa.

 

Scouts on another route in central ND scouted six spring wheat fields and calculated an average yield of 35.8 bpa; last year the average yield calculation was 52.1 to 41.5 bpa. Northwest ND spring wheat fields (three) were scouted and calculated an average yield of 27 bpa; the average durum yield at 45.4 and 52.7 bpa.

Export sales were weaker with new crop wheat down 26 percent, old crop corn down 80 percent and old crop soybeans down 26 percent week over week. Old crop corn sales notched a marketing year low for this week, recording only 92,000 metric tons.     

 

Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

498

 

Corn - OC

92

200-500

Corn - NC

486

200-400

Soybeans - OC

303

100-300

Soybeans - NC

531

300-1,000


 

 

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

July 26, 2017 | Grain Hedge Insights | Kevin McNew | Views: 156

Day 1 Wheat Quality Tour Results are In

Corn and Beans Continued to Inch Lower in the Overnight Session

Corn and beans continued to inch lower overnight while wheat was holding on to slim gains going into the morning break.

 

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Russia's Agriculture Ministry hopes to receive government permission to export some of its grain stockpile in September. The ministry has been considering exporting 500,000 tonnes of grain from its 4 million tonne stockpile to free up storage space and to lessen federal budget spending on servicing the stock.

 

Day 1 of the US Wheat Quality Tour found average spring wheat yields of 37.9 bu/acre down from 43.1 in 2016 and the 5-year average of 45.7. The area covered was in Eastern & Central North Dakota. Day 2 of the tour will head in NW ND.

The latest weather models continue to diverge on moisture forecasts, but tend to agree on temps. Persistent heat in the Northern Plains and Canadian Prairies will persist for the next 10 days. The EC forecast through 10 days features dryness in all major North American crop regions with either little rainfall or modest totals that will come in near normal or about an inch below normal. The GFS shows a much more substantial weather system moving across the portions of the Plains and Corn Belt states as August begins that pushes 10-day rainfall from Nebraska through Iowa/Minnesota and into Wisconsin/Illinois up to 2 inches above normal.

 

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July 25, 2017 | Grain Hedge Insights | Kevin McNew | Views: 121

Crop Progress on Monday Shows Further Crop Deterioration on Grains

Grains Mixed in the Overnight

Grains were mixed overnight with soybeans posting gains while wheat and corn were lower.

 

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After the close Monday, USDA showed further deterioration in the grain crops. Soybeans plummeted to 57% good-to-excellent versus 61% last week and 60% expected by the trade. For corn, the condition ratings also came in lower than expected, off 2% from last week to 62%.

 

The latest weather model shows increasing rainfall across South Dakota and southern Minnesota into Iowa. This should bring important moisture to the drier-biased portions of the western Corn Belt from much of Iowa into northern Illinois late Wednesday into early Thursday. Some meaningful rain will also fall in southeastern South Dakota late Tuesday into Wednesday. More rain will be needed over time to increase the short subsoil moisture.

Egypt was in the market for wheat overnight. Although no official deal has been announced, the lowest offers accounting for freight were Russia and Romania.

 

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

July 24, 2017 | Grain Hedge Insights | Kevin McNew | Views: 63

Grains Bolt Lower to Start the New Week

USDA Cattle on Feed Report Shows Solid Growth

Grains bolted lower to start the new week as rains fell over the weekend in key growing areas.

 

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Rainfall over the last 3 days were in the 1 to 3 inch range from Eastern IA thru the Eastern Cornbelt. Also, Eastern SD/ND into MN got 0.50 to 1 inch of precip over this time period. Weekend temps were well into the 100s for all of KS and parts on NE. Looking ahead, a storm system should bring about an inch of rain over much of Iowa by mid-week into Thursday.

 

On Friday after the close, USDA’s Cattle on Feed report showed solid growth again with July 1 cattle on feed up 104% from last year versus a trade estimate of 102.9. Placements in June were a whopping 116% high versus last June, which was well above the analyst expectation of 106.1%.

Overnight there was modest export interest in wheat from Bangladesh and Algeria. Russian wheat export prices were mixed last week after nine straight weeks of growth due to concerns over a lack of high quality wheat and strengthening competition with France for wheat supplies to Egypt.

 

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July 21, 2017 | Grain Hedge Insights | Kevin McNew | Views: 60

December Corn Drifts Back to $4 Overnight

Looking at weather shows heat across the central and southern Midwest through the weekend.

Grains were lower overnight with Dec corn drifting back to $4 in overnight trade.

 

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Yesterday after the close, Argentina’s ag ministry revised their 2016 crop forecasts, pegging the corn crop there at 49.5 MMT up from 47.5 MMT and well above USDA’s forecast of 41. For soybeans, the Argentine crop is estimated at 55 MMT down from 57 previously and USDA at 57.8.

 

Looking at weather shows heat across the central and southern Midwest thru the weekend. Rains of 1 to 2 inches over the next few days will hit S MN, WI and N. IL. But areas to the West remain dry. For the 6 to 10 day forecast, the weather models diverge quite widely in their outlook. The GFS model shows more cooling in the cards, but the European models, which some meteorologists are favoring right now, points to extensive heat in the WCB. The 11 to 15 day forecast indicates warmth returning or maintaining into early August, posing risk to yield and production. The focus at that point will be shifting towards soybeans, where lack of precipitation and additional heat could continue depleting soil moisture in some areas, and risk the crop during the pod fill stage.

French farmers had harvested 63 percent of this year's soft wheat crop by July 17, up from 29 percent a week earlier, data from farm office FranceAgriMer showed on Friday. Crop conditions were stable with 66 percent of soft wheat was rated good/excellent.

 

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

July 20, 2017 | Kevin McNew | Views: 58

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