November 22, 2017 | Grain Hedge Insights | Kevin McNew | Views: 844

Fall Weather Continues to be Challenging for Harvest

January Soybeans Up in the Overnight Session

In the overnight session the December corn is unchanged, January Soybeans up 5 ¼ cents and December wheat is down ¾ of a cent. December corn continues to trade around resistance at $3.44 ¾ per bushel after breaking below that support level last week. Weather in Brazil looks beneficial to the corn and soybean crop with an active rain pattern across most all of the grain growing regions. Argentina continues to have areas of dryness for their corn and soybean crop, but the 11-15 day weather outlook points to some precipitation.

 

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The grain markets will be closed for the Thanksgiving holiday, but will reopen Friday morning at 8:30 AM CST. Friday’s trade session will close early at 12:05 PM CST.  

 

Weather this fall has been challenging for harvest. The cooler weather and rain delays made it hard for later planted crops to dry down naturally in the field. Corn has been delivered wet from the field and has experienced moisture deductions and the size of the crop has put pressure on infrastructure.  Some elevators have shortened dump hours for high moisture grain as they try to work through their inventory. We have seen a 3 to 4 cent premium for 14.5 percent moisture corn at the Gulf.   


 

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November 20, 2017 | Grain Hedge Insights | Kevin McNew | Views: 555

Jan Soybeans Lower This Morning after a Light Setback after Friday’s 1.9 percent Jump

Corn and Wheat Also Lower this Morning

In the Sunday night session the grains traded lower with December corn down ¼ cent, January soybeans down 2 ½ cents and Chicago Wheat down 4 cents. The sharp rally on Friday brought corn prices back from the lows of the week, but will likely lead to upward resistance around $3.42 ½ early in the trade this week. Resistance at this level is from a level of previous support which was broken, often causing a role reversal where previous support turns into price resistance.  

 

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Last week the cash market firmed as basis moves out of harvest lows. Corn improved 2 cents and soybeans rallied 4 cents on average across the country. Soybean basis was driven by a sharp rise in the export markets. The PNW increased their soybean basis by 22 cents and the Gulf lifted theirs by 14 cents on average this week. Basis along the river system reacted to the strength out of the Gulf by improving 8 cents on average this week. Soybean plants increased an average of 3 cents this week. Corn basis also improved this week, but only by an average of 4 cents along the river and 4 cents at Ethanol facilities.

The latest commitment of traders report showed that money managers extended their net short positions to 230,556 contracts from 205,625 short last week. This is a record net short position that surpases the previous record of 229,176 net short positions on March 8, 2016. The managed money net position in soybeans fell 24,187 contracts last week to a net positive 22,550 contracts.    

 

 

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November 17, 2017 | Grain Hedge Insights | Kevin McNew | Views: 457

Weekly Cash Comments

Weekly Cash Commentary for week ending 11/17/2017

Basis levels were bolstered this week by improving export basis and a surge in end-user bidding out of harvest lows. On the week, corn was up 2 cents while soybeans climbed 4 cents.

 

Soybeans big lift came from a completing harvest and a sharp climb in export basis with the PNW up 22 and the Gulf basis up 14 on the week.  This helped push river terminals to an 8-cent advance on the week.  On the Upper Mississippi the shipping season winds down as winter freeze stops barge traffic and basis levels are starting to soften. For crush plants, they were up a solid 3-cent on the week but gains were not universal as some plants continue to hold steady.

 

 

For corn, export locations were more subdued but river terminals still managed to climb 4 cents on the week. Ethanol plants as a group were also up 4 on the week but gains were clearly less prominent in the Upper Midwest where fresh supplies continue to flow into the pipeline.

 

Carry in the futures market continues to widen on the market slump as ample supplies force wide spreads to encourage storage. For corn, the Dec-Jul spread stands at 29-cents, well above the 20-year average of 23 cents for this time of year. Meanwhile soybeans face an exceptionally large carry as Jan-Jul holds at 28-cents a 4x multiple of the 7-cent norm for this time of year.

 

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November 17, 2017 | Grain Hedge Insights | Kevin McNew | Views: 941

Grains Move Higher in the Overnight Session

Rains in the Midwest This Weekend Delay Corn and Soy Harvest

In the overnight session the grain moved higher with December corn up 1 ¼ cents, January Soybeans up 3 ¼ cents and December Chicago Wheat up 3 cents. Brazil rains will be scattered for the remainder of the week and provide widespread coverage for the rest of the month benefiting the corn and soybean crops. Argentina weather is more of a concern, with some isolated light showers expected today and Monday but the overall moisture profile declining over the rest of the month. Some crop stress may start to develop in North East Cordoba, Southern Santa Fe and Northern Buenos Aires.   

 

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Informa Economics announced their latest 2018 corn planting estimates at 91.415 million acres, revised higher compared to 90.460 million. They also estimated that soybean plantings in the same year at 89.627 million acres compared to 90.347 in their previous estimates. Informa also sees all wheat plantings at 45.625 million acres compared to 45.875 million acres.  In the latest WASDE report the USDA estimated that planted acres for the 17/18 crop was 90.4 million acres for corn, 90.2 million acres for soybeans and 46 million acres planted to wheat.

 

The latest harvest report from France showed that 99 percent of the corn harvest is complete for crops that were rated good-to-excellent. It also showed that SRW crop is 95 percent planted with 97 percent of the crops in good-to-excellent condition.    

 

It was announced that Iraq purchased direct from the U.S 90,000 metric tons of Rice outside of the tender process. Also in the news was Egypt’s GASC bought 240,000 metric tons of Russian wheat in a purchase tender.  

 

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November 16, 2017 | Grain Hedge Insights | Kevin McNew | Views: 851

Moderate Export Sales This Week

Grains Traded Mixed in the Overnight

In the overnight session the grains traded mixed with Corn up ¼ of a cent, January Soybeans up ½ a cent and December wheat up 2 ¼ cents. Weather in South America is mixed with mostly favorable weather in Brazil, but dryness starting to become noticeable in parts of Argentina which is slowing planting pace.

 

The NOPA crush report showed that processors crushed 164.242 million bushels in the month of October, which was below analyst expectations of 164.641 million bushels. The report also showed that Soymeal exports increased to 643,199 metric tons, up from 562,180 metric tons a year ago. The biggest surprise was the fact that soyoil stocks slipped to 1.224 billion pounds from 1.302 billion pounds last month. NOPA reported that 11.54 pounds of oil was produced per bushel which was below the 11.61 pounds per bushel produced last year. This has some analysts questioning the quality of this years soybean crop and triggered a rally in soyoil yesterday.
 

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Export sales this week were moderate for wheat, but soybeans was on the lower end of expectations and corn missed expectations altogether. Wheat sales were on the high side of analyst expectations but still declined 37 percent from the previous week. Corn sales were down 60 percent from last week and soybean sales slipped 5 percent.


 

Weekly Export Sales-

 

Actual

Estimated

Wheat

489

350-550

Corn - OC

949

1,200-1,700

Corn - NC

5

0-200

Soybeans - OC

1,104

1,100-1,500

Soybeans - NC

72

0-50

 

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

November 15, 2017 | Grain Hedge Insights | Kevin McNew | Views: 908

USDA To Release Monthly Soy Crush Report

Dec Corn and Jan Soybeans Up in Overnight Session

In the overnight session December corn increased ¼ of a cent after trading at the lowest price in over a year at $3.37. January soybeans increased 3 ¾ cents and December Chicago wheat was down 1 ½ cents. Southern Brazil is expecting more precipitation on Thursday and Friday. The precipitation is expected to move north into early next week; outlook will benefit the majority of the corn and soybean crop. There is some dryness in parts of Argentina as the country continues to plant soybeans. Stress on the crop is limited for now because of long term soil moisture reserves.

 

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Today at 11 AM CST NOPA will release their monthly crush report. The National Oilseed Processors Association represents 13 companies that make up over 95 percent of soybean crush in the United States. Analysts are expecting 164.475 million bushels of soybeans crushed in the month of October. This would be a sharp jump higher from September's report that showed only 136.419 bushels crushed during that month. The month of October typically has very large crush numbers as plants ramp up production during harvest. The largest monthly crush on record was reported in October 2016 at 164.641 bushels.

In July, California added Glyphosate to a list of cancer causing chemicals and would require all products containing the chemical to carry warnings by next July. Monsanto is suing California on Wednesday to halt the labeling requirement. Monsanto rejects that the chemical causes cancer and says that the requirement would force retailers to “spread false information”. This claim is in contradiction of the World Health Organization's research that concluded that Glyphosate was “probably carcinogenic”.


 

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

November 14, 2017 | Grain Hedge Insights | Kevin McNew | Views: 783

Corn and Wheat Drift Lower on Prospects of Large Supplies

Midwest Corn and Soy Harvest Delays Wednesday through Saturday

In the overnight session the grains were mixed with December corn down ¼ cent, November soybeans up 1 ½ cents and December wheat down ½ a penny. December corn is currently trading at $3.42 per bushel which is right at a previous low set on October 12th. The surprised yield revision by the USDA will most likely continue to weigh on corn prices as we move through the week.   

 

Exporters sell 133,096 MT of Corn for delivery to unknown destinations during the 2017/2018 marketing year-USDA

 

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The latest crop progress report showed that corn is now 83 percent harvested, up 13 percentage points from last week, but still below the five year average of 91 percent harvested at this point of the season. The second half of this week could provide some harvest delays, but the 6-10 day precipitation outlook shows drier than than normal conditions throughout the majority of the Midwest. Soybean harvest advanced to 93 percent complete, up from 90 last week but slightly behind the five year average of 95 percent. The soybean harvest pace was slightly behind analyst expectations for this report.

The report also showed that winter wheat is now 95 percent planted after lagging behind the five year average all season long. The winter wheat crop is rated 54 percent good-to-excellent which is behind the 59 percent good-to-excellent rating last year.

 

Farmers have planted 12 percent of the expected soybean acres in Argentina, but dryness in the forecast may slow planting pace in the coming weeks. Both Buenos Aires and Santa Fe are expected to be dry this week.
 

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

November 13, 2017 | Grain Hedge Insights | Kevin McNew | Views: 753

Cash Market Creeps Higher

Soybeans Posting Stronger Gains than Corn

In the overnight session the grains traded lower with December corn down 1 cent, January Soybeans down 3 ½ cents and December wheat down 5 ¼ cents. The six to ten day forecast is expecting cooler than normal temperatures in the central and eastern grain belt as well as North Dakota and Iowa. The majority of the grain belt is expected to stay drier than normal during that time with chances for precipitation isolated to Michigan and Ohio.   

 

Exporters sell 135,000 MT of soybean cake and meal for delivery to Philippines during the 2017/2018 marketing year-USDA

 

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Last week’s supply and demand report will most likely continue to weigh on prices this morning. The surprise yield increase for corn was well above market expectations and some analysts are concerned they may raise it further in the coming months. Soybean yield was also above expectations and recent stories about delays in soybean imports in China may also be in the back of traders minds this morning.

 

The cash market creeped higher last week with Soybeans posting stronger gains than corn. Soybean basis improved nationally by 3 cents with soybean plants up 7 cents and basis at river terminals up 11 cents. The gulf soybean basis increased 7 cents this week. Corn basis increased a penny across the U.S with ethanol plants up 1.5 cents and basis at river terminals increasing 3 cents.   

 

 

Russian wheat prices fell for a second week in a row as the Rouble lost strength compared to the dollar. Russian wheat fell to $191.5 per metric ton last week, down from $192 the week before. The large Russian harvest continues to put downward pressure on global prices. Russia is expected to export a record 45 million metric tons this marketing year.     

 

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

November 10, 2017 | Grain Hedge Insights | Kevin McNew | Views: 749

Weekly Cash Comments

Weekly Cash Commentary for week ending 11/10/2017

Soybeans continued to move higher on basis this week as harvest wraps up and fresh supplies are becoming limited. For the week, US average soybean basis climbed 3-cents while corn basis inched up 1-cent as harvest deliveries were still strong in the Western Cornbelt.

Beans found strength this week driven in part by the Gulf export market which shot up 7 cents a bushel which helped an even bigger move at upstream river terminals which garnered an 11-cent advance. There was however some disruptions in barge traffic on the lower Ohio near Paducah, KY as heavy rains and a rock dike stymied movement. Elevators there took a defensive stance on basis giving up 6 cents on the week. Crush plants followed suit with the broader market moving up 7 cents on average but gains of 10 to 15 cents were fairly widespread at some key facilities.

 

For corn, the market was more subdued as harvest continues to be in full force in the Upper Midwest. Nonetheless, river terminals as a group still managed a 3-cent advance on average. However, ethanol plants were more subdued bidding up basis only 1.5 cents on average.

Basis levels should continue to climb as harvest wraps up in the coming days for beans and likely wraps up enough in corn to slow pipeline supplies. With futures heading south farmer selling should be more limited once we get done with the harvest season.

 

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

November 09, 2017 | Grain Hedge Insights | Kevin McNew | Views: 1097

Export Sales for Corn and Wheat This Week Were Strong

January Soybeans Trading Higher This Morning

In the overnight session the grains were mixed soybeans showing the most strength as traders anticipate a production revision lower in the WASDE report released today. December corn is trading unchanged, January soybeans are trading 3 ¾ cents higher this morning and are now above $10 per bushel. December Chicago wheat is up ¼ penny this morning.

 

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Ethanol production improved only slightly this week with the Wednesday EIA report showing last week’s production at 1.057 million barrels per day, up from 1.056 million barrels per day last week. Ethanol stocks decreased slightly to 21.345 million barrels but continue to be at record levels for this time of the year. Since the beginning of the marketing year ethanol has been produced at a strong rate, averaging around 3.3% above last year’s levels.


 

It is taking longer to issue safety certificates for non GMO soybeans for import into China and at least a couple vessels are without certificates in China ports. The delay in receiving these certificates can be very costly as traders suffer from higher demurrage costs for each day the ship sits without being unloaded. Though this delay has impacted only a few ships recently it is changing the way traders are sourcing their soybeans, favoring the Gulf of Mexico over the Pacific Northwest because the longer transit time provides more lead to receive the safety certificates on time.


 

Export sales were strong for corn and wheat this week, but below expectations for soybeans. This weeks wheat export sales were a marketing year high and beat expectations sharply. This weeks wheat sales was boosted due to a large Iraq order of 450,000 metric tons. Corn sales were also up sharply from last week, with Mexico accounting for nearly half of the sales. Mexico accounted for nearly all the new crop corn sales recorded this week. Soybean sales were down 39 percent from last week and missed analyst expectations.

 

Weekly Export Sales-

 

Actual

Estimated

Wheat

781

350-550

Corn - OC

2,364

1,200-1,600

Corn - NC

574

500-700

Soybeans - OC

1,160

1,300-1,800

Soybeans - NC

4

0-50


 

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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