October 04, 2017 | Grain Hedge Insights | Kevin McNew | Views: 223

Dec Corn Down 1 Cent and Nov Soybeans Unchanged in The Overnight Session

Forecast To Clear Up Favoring Harvest in the Next 6 to 10 Days

In the overnight session the grains were mixed with December corn down 1 cent, November soybeans unchanged and December wheat down 2 ½ cents. Precipitation is expected to pass back over the Midwest from Thursday through Saturday which should continue to slow harvest pace. The forecast clears up favoring harvest in the 6-10 and 11-16 day precipitation forecasts.  

 

According to a Reuters article published this morning China’s soybean imports from the United States are expected to be delayed for at least two weeks as exporters struggle to find soybeans that meet quality specifications. Quality has been a huge challenge because early harvested soybeans are sourced out of the Mississippi Delta which suffered crop damage from the recent Hurricanes. The scarcity of soybeans that meet quality specs in the Gulf region has caused delays at the U.S. Gulf shipping terminals as waiting times have grown to 10-12 days, which is above the usual 5 days during this time of year. This situation is made worse by the low water levels along the Mississippi and delays in barge traffic which have driven barge rates sharply higher.  

 

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Recent precipitation has aided soil moisture in 80 percent of Brazil’s corn and soybean planting areas. The slow transition out of the dry season had slowed initial planting pace, but recent moisture has helped the situation. The next 10 days show little signs of moisture and any precipitation will be isolated to the southern regions of Brazil through the middle of the month.

 

Egypts GASC announced this morning that they purchased 180,000 metric tons of Russian wheat.


 

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October 03, 2017 | Grain Hedge Insights | Kevin McNew | Views: 469

Ohio River Near Brockport IL Closed to Navigation

Grains Were Mixed in the Overnight Session

In the overnight session the grains were mixed with December corn down 1 ¼ cents, November soybeans down 2 ¼ a cents and December wheat up 1 cent. Rains are slowing harvest in the Northwestern Midwest early this week and are expected to slow harvest again between Thursday and Saturday.

 

Harvest pace for corn is moving slower than expected with only 17 percent complete compared to average expectations of 21 percent and a four year average of 26 percent during this time of year. Soybean harvest is also behind pace with only 22 percent harvested which missed expectations of 25 percent. Soybean harvest over the last four years averages 26 percent complete this week.

 

Corn ratings improved to 63 percent rated good-to-excellent in this week’s Crop Progress report, which was above expectations of 61 percent. Soybean conditions held steady at 60 percent of the crop rated good-to-excellent.

 

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The USDA announced that 151.6 million bushels of soybeans were crushed in August which was slightly below trade estimates of 152.3 million bushels. This brings total soybean crushings for the 16-17 marketing year to 1.899 billion bushels which is above the USDA’s forecast in the latest WASDE report of 1.895 billion bushels. Soybean oil stocks at the end of August were at 1.81 billion pounds which was below analyst expectations of 1.887 billion pounds. The USDA also reported that corn used for ethanol in August was 481 million bushels which was up from the previous month which reported 454.8 million bushels used.

 

Yesterday, it was announced that the Ohio River was closed to navigation near Brockport, Illinois after an equipment failure leaving roughly 89 vessels waiting to pass. It is unclear how long it will take to resolve the issue. This will continue to put pressure on grain basis which has already been pressured along the river as lower water levels have slowed the movement of freight.
 

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October 02, 2017 | Grain Hedge Insights | Kevin McNew | Views: 483

Barge Rates Jump to a Three Year High

Grains Trade Lower in Sunday Night Session

In the Sunday night session the grains are trading lower with December corn down 1 cent, November soybeans down 3 ¾ cents and December Chicago wheat trading 5 cents lower this morning. Rains are expected in the first half of the week across the Northwestern Midwest which will slow harvest pace. Precipitation is then expected to move eastward by the later half of the week.

 

The Quarterly Grain Stocks was released on Friday surprised the market lifting corn and soybeans and sending wheat prices on another slide lower. U.S Corn stocks were reported at 2.295 billion bushels which was lower than the average Reuters analyst guess of 2.353 billion bushels. Soybean stocks were reported at .301 billion bushels which was below the analyst expectations of .338 billion bushels. The USDA also announced that based on the quarterly grain stocks report, they have adjusted their 2016 harvested area down 40,000 acres to 82.7 million acres and revised their yield estimate down .1 bushels per acre.

 

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Total wheat in all positions was reported at 2.253 billion bushels which is down 11 percent from a year ago, but above analyst expectations of 2.205 billion bushels. Spring wheat was the biggest surprise with the stocks report showing 416 million bushels compared to the trade expectations of 382 million bushels. Spring wheat is now trading down 35 cents lower than its opening price on Friday.  

 

Barge rates have jumped to a three year high as harvest is underway in the U.S. Rates have been further lifted due to low river levels which have caused some delays as emergency repair work is conducted. This will likely have a negative impact on basis along the river.

 

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September 29, 2017 | Grain Hedge Insights | Kevin McNew | Views: 411

Dec Corn and November Soybeans Down in the Overnight Session

Grain Stocks Report to be Released Later Today

In the overnight session the grains traded lower with December corn down ½ a cent, November Soybeans down 3 cents and December Wheat down 1 cent. Weather forecasters are watching the Northwest grain belt for harvest delays early next week.  

 

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The Grain Stocks report will be released today, September 29th at 12 PM. Traders will be focusing on this report as the final carryout number for the 2016-2017 marketing year. With the marketing year complete and last years use set, the remaining stocks will give the clearest picture of 16-17 production. In the last 17 September stocks report, the USDA has revised its crop production estimate in 15 of them which makes this quarters grain stocks more difficult to predict.  

 

Here are the expectations for the Grain Stocks report. In a Reuters poll of analysts the average trade guess for soybean stocks on September 1st is 338 mbu with guesses ranging from 321 mbu to 363 mbu. Analysts are expecting corn stocks to be at 2.353 billion bushels and wheat stocks at 2.205 billion bushels.  

 

Wheat production in Australia will be impacted by the high temperatures and low soil moisture during the spring this year. The hot dry conditions across Australia have analysts polled by Reuters estimating a production at 20.015 million metric tons which is below the USDA’s September WASDE report of 22.5 MMT and a long ways from last years production of 35.56 million metric tons. Australian wheat prices have been rising and are already above offers being made for U.S. cargoes in Asia which should help North America export sales this marketing year.     

 

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September 28, 2017 | Grain Hedge Insights | Kevin McNew | Views: 346

Weekly Export Sales Numbers Are In

Grains Trade Lower in the Overnight Session

In the overnight session the grains traded lower with December corn down 1 ½ cents, November Soybeans down 5 ¾ cents and December Wheat down 2 ¼ cents as clear weather throughout the majority of the grain belt will allow harvest to progress uninterrupted over the next 11 days. Precipitation early next week might cause some rain delays in the Northwest but widespread delays are unlikely.

 

There has been some light showers in parts of Mato Grasso over the last day and rains are expected to expand into the north over the next five days which will help planting which has been delayed recently due to dry weather.

 

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Ethanol production declined sharply week over week to 996 thousand barrels per day from 1.033 million barrels per day. Despite the decline production was still above last year’s numbers for the same time period. Ethanol stocks also declined this week to 871 million gallons from 888 million gallons last week. Ethanol production will have to run about 1 percent ahead of last years pace to meet the USDA’s corn used for ethanol estimate of 5.475 billion bushels.

 

The Buenos Aires Grain Exchange released their latest expectations for Argentina’s 2017-18 corn and soybean harvest. Corn production was seen at 41 million metric tons which is just below the 42 MMT estimated by the USDA in the September WASDE report. The exchange pegged Soybean production at 54 million metric tons which was 3 million metric tons below the latest WASDE report. Wheat harvest was seen at 17 million metric tons which was ½ MMT below the USDA’s most recent projections.

Export sales were strong for soybeans which were well above expectations. China and unknown destinations accounting for 2.4 million metric tons of the 2.982 total sales this week. Wheat sales were also strong this week, up 42 percent from last week and on the high side of analyst expectations. Corn sales on the other hand were a disappointment missing expectations with only 320,000 metric tons sold.
 

Weekly Export Sales-

 

Actual

Estimated

Wheat

435

250-450

Corn

320

500-800

Soybeans

2,982

1800-2200

 

 

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September 27, 2017 | Grain Hedge Insights | | Views: 369

Planting Pace for Winter Wheat is Running Ahead in Ukraine and Russia

Grains Trade Lower in the Overnight Session

In the overnight session the grains traded lower with December corn down 1 ½ cents, November soybeans down 2  ¾ cent and Chicago Wheat down ¾ cents.

 

On Friday, September 29th the USDA is scheduled to release its Quarterly Grain Stocks report. The average trade guess for corn is for 2.353 billion bushels with the highest analysts forecast at 2.495 billion bushels and the lowest forecast at 2.083 billion bushels. The average trade guess for soybeans is 338 million bushels with analyst forecasts ranging from 363 million bushels to 321 million bushels. The average trade estimate for wheat is 2.205 billion bushels with forecasts ranging from a high of 2.495 billion bushels to a low of 2.083 billion bushels.

 

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The planting pace for winter wheat is running ahead of pace in both Ukraine and Russia. Russia has reached 64 percent planted on an expected 43.24 million acres and Ukraine is 35 percent planted on an expected 6.17 million acres. Ukraine and Russia are expected to plant the same acreage as last year but some rainy weather throughout certain regions of Russia poses a risk to the crop according to the Agriculture Ministry.

 

With last years bumper wheat harvest, Russia is widely expected to become the world’s largest wheat exporter this marketing year. Weather conditions are better than last year throughout Ukraine which should continue to support a rapid planting pace.

 

On Tuesday, the U.S Environmental Protection agency announced it was seeking comment on a proposal that was announced in July to reduce the 2018 biodiesel blending requirements. The agency has expressed concern that the potential decline in biodiesel imports could raise domestic prices in a way that would cause economic harm.

 

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September 26, 2017 | Grain Hedge Insights | Kevin McNew | Views: 378

Crop Progress Shows Corn Harvest Behind Average

Grains Trade Lower in Overnight Session

In the overnight session the grains traded lower with December corn down ¾ of a cent, November soybeans down 3 ¼ cents and December Chicago wheat up 2 ¾ cents this morning.

 

Temperatures should cool down in the second half of this week. The recent  warm weather has helped speed along maturity after a cooler than normal late summer had some traders concerned about growing degree days. The corn crop is 51 percent mature according to the Monday crop progress report which is behind the five year average of 64 percent. Precipitation should be limited throughout the Midwest over the next couple weeks which will continue to support harvest work.  

 

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The Crop Progress report released on Monday showed that corn harvest for the third week in September is running behind the five year average with only 11 percent of the corn crop harvested compared to the average 17 percent. The corn crops good-to-excellent rating held steady this week at 61 percent. Soybean harvest is 10 percent complete compared to the five year average of 12 percent. Winter wheat is in line with the five year average with 24 percent planted.    

South Africa’s 2017 corn harvest is expected by analysts to be the largest on record at 16.498 million metric tons which is well above last year’s drought impacted production. The Crop Estimates Committee will provide its final production estimates on Thursday the 28th. Currently, the largest South African corn crop was in 1981 and produced 14.656 million metric tons.


 

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September 25, 2017 | Grain Hedge Insights | Kevin McNew | Views: 324

Grains Trade Lower in the Sunday Evening Session

Weather Looks to be Favorable in the Mid-West This Week

The grains traded lower Sunday evening with December corn down 1 ½ cents, November soybeans down 4 ¾ cents and December Chicago wheat down 2 ½ cents this morning. Weather this week looks to be mostly favorable with precipitation in the northern Midwest expected over the next two days and above average temperatures helping the drying process. The recent moisture in the panhandle of Texas has been favorable to winter wheat germination.  

 

Brazilian weather looks to bring moisture to some dry fields into Parana by the weekend with more chances of showers in Northern Brazil. The increased chances of showers should help the planting pace which started mid- September and is lagging behind the normal pace. The forecast for precipitation in Brazil is expecting dryness to return in the 11-15 day period, but expects rains by mid-October.


 

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The most recent Cattle On Feed report was a bearish surprise to many traders and showed that more cattle were placed in August than expected. August placements were 103 percent of last year compared to the Reuters average trade guess which showed trader expectations averaged around 97.1 percent. All Cattle on Feed was 104 percent of a year ago. Marketings were mostly in line with expectations with the USDA reporting 106 percent of cattle marketed in August compared to the average trade guess of 105.8. The report on Friday was released after the market closed.  

 

 

Corn imports into China continued to run strong in August with 380,000 metric tons imported. Although imports are down sharply from July, August's numbers representing a 14 times increase from last year when imports were reduced after China ended the state run stockpile program. Corn in China is mostly used to feed livestock.  

 

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September 22, 2017 | Grain Hedge Insights | Kevin McNew | Views: 416

Corn Soybeans and Wheat all Up after Overnight Session

Drought Expected to Persist Throughout ND, SD and MT

In the overnight session the grains traded higher with December corn up 2 cents, November soybeans up 7 ½ cents and December Chicago wheat up 1 ½ cents this morning. The strong export sales reported yesterday coupled with dryness in both Moto Grosso and Parana are helping to support prices this morning.

 

The dryness in Brazil is not an immediate threat but it has slowed the pace of planting which starts mid-September and continues through November. Some areas haven’t received rain in nearly a month and are taking longer than usual to come out of the dry season. Weather forecasters are expecting some precipitation in the 6-15 day forecast but confidence in the likely distribution is low. Although the the recent dryness is unlikely to have any impact on the crop, it puts emphasis on receiving more precipitation in October.

 

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The most recent Seasonal Drought Outlook maps have been updated by the Climate Prediction Center and show that drought is expected to persist throughout North Dakota, South Dakota and Montana. The report also shows persisting dryness expected throughout eastern portions of the Middle Mississippi Valley, Lower Michigan, western Nebraska.

 

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September 21, 2017 | Grain Hedge Insights | Kevin McNew | Views: 283

Strong Export Sales Numbers for Soybeans

Grains Trade Lower in the Overnight Session

In the overnight session the grains are trading lower with December corn down ½ a cent, November soybeans down 6 ¼ cents and December Chicago wheat down 2 cents. The sharp rally in the U.S dollar following the latest Fed meeting could be pressuring commodities this morning. The Fed’s intention to press forward with another rate increase by the end of the year despite the decline in inflation surprised many and triggered a sharp rally in the U.S dollar index.

 

EXPORTERS SELL 132,000 METRIC TONS OF SOYBEANS FOR DELIVERY TO CHINA DURING THE 2017/2018 MARKETING YEAR- USDA

 

According to the EIA report released on Wednesday Ethanol production dipped this week to 1.033 million barrels per day, down 1.3 percent from last week. This weeks production was 5.3 percent above last year during the same period. Production will need to continue running ahead of last years levels in order to meet the USDA 2017-18 forecast of 5.475 billion bushels used for ethanol. Ethanol stocks were mostly unchanged in this week’s report at 888 million gallons.    

 

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This weeks export sales were very strong for soybeans and less impressive for corn and wheat. Soybean sales recorded 2,338,100 metric tons with over half going to China. China importers are beginning to take advantage of the weakness in U.S soybean prices as supplies in Brazil have thinned. Wheat export sales were down three percent from last week and on the low end of analyst expectations with only 307,200 metric tons sold. Corn sales missed expectations with net sales of 526,900 metric tons recorded.

 

Weekly Export Sales-

 

Actual

Estimated

Wheat

307

300-500

Corn

527

700-1,000

Soybeans

2,338

1,200-1,500


 

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More Articles

Weekly Cash Comments

October 13, 2017 | Grain Hedge Insights | Kevin McNew

In the cash market this week there was a bit of buoyancy as river barge markets reverted to more normal pricing and corn harvest ground to a near halt. On the week, soybean basis was up 2 cents while corn basis posted a modest 1-cent advance.

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