April 13, 2018 | Grain Hedge Insights | Kevin McNew | Views: 399

Snow to Hit Upper Midwest through the Weekend

Grains are Down This Morning

China Soy Imports Falter

China's soybean imports fell 10% in March from a year ago. March imports of 5.66 MMT were down from last year's 6.33, but up slightly from last month's 5.42, according to customs data. Imports are expected to increase in coming months as China normally turns to Brazil beans at this point in the season.

 

Thursday’s Trump Policy Musings

President Trump said on Thursday his administration may allow the sale of gasoline containing 15% ethanol year-round, which could help farmers by firing up corn demand but faces opposition from Big Oil. Trump administration continues to jockey between oil and corn constituencies as they clash over the nation's bio-fuels policy.  President Trump has directed his top trade and economic advisers to take a fresh look at the Trans-Pacific Partnership (TPP) trade agreement he withdrew from in his first week in office. He said he's going to deputize (National Economic Council Chairman) Larry Kudlow and (US Trade Representative) Robert Lighthizer to look at re-entering the TPP negotiations and to take another look at whether or not a better deal could be negotiated.

 

US Weather

Days 1-5: Snows to hit Upper Midwest (Dakotas & Minnesota) through the weekend, while rounds of rain and thunderstorms in the Midwest/Delta. Planting progress is unlikely to proceed through next week as a result. Frost/freeze expected in S Plains. Temps in the 20s for KS, and sub-freezing temps will stretch into much of OK.

Days 6-10: Colder than normal temps dominate the north central U.S. with a moderate brand of cold across the Midwest. Limited precip over the next 10 days for southern Plains’ Hard Red Winter (HRW) wheat crop. Although, overnight model guidance (both GFS & EC) has begun to place a rainfall event somewhere in the vicinity of 20-22 April that could bring rain and thunderstorms to the southern Plains.

Days 11-15: Temps could moderate back to near normal with the very cold anomalies fading away. This should, on its own, be beneficial for plantings which typically begin to ramp up in parts of the southern Midwest by the end of the month. However, precip could be active during this time frame, which could be unfavorable from a planting standpoint. However, model guidance out through this time frame can be highly variable.

French Crops Lagging

Corn sowing is under way, with 1% of the expected area sown by April 9 vs 23% a year earlier. FranceAgriMer estimates 78% of French soft wheat in good/excellent condition, unchanged vs week earlier but below the 89% rating last year.
 

 

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

April 12, 2018 | Grain Hedge Insights | Kevin McNew | Views: 385

Strong Soybean Export Sales

Corn and Soybeans Up This Morning

Headlines

Strong soybean exports sales. Ethanol production held steady while stocks continue to decline. Argentina purchases US soybeans for the 2nd time this week.

Ethanol Production

Ethanol production declined last week to 1.034 million barrels from 1.038 million barrels. Weekly production was 4.9% above LY. Ethanol production dipped LY through May which means if weekly production holds steady over the next two months we will be back on track to meet the current corn used for ethanol estimate of 5.575 billion bushels. Ethanol stocks declined again this week to 918 million gallons from 942 million gallons LW. Over the last four weeks we have seen a 10% decline in ethanol stocks which is the largest on record over a four week period.

Argentina Purchases U.S. Soybeans

Argentina purchased 120,000 MT of 18/19 soybeans from the U.S. on Wednesday. Argentina made a similar purchase on Tuesday. These sales will show up in next weeks export sales report. The buyer was oilseed processor Vicentin SAIC and shows the impact of the drought in Argentina. These purchases represent the largest imports to Argentina from the U.S. in 20 years and it is likely there will be more to come.  

 

Weekly Export Sales

Soybean sales beat expectations and were up 74% from the four week average. China accounted for 254,700 MT while unknown destinations accounted for 665,800 MT.  Egypt, Mexico and Taiwan were also present on the buyer list. Soybean exports were only 419,700 MT which was a marketing year low. Corn sales and wheat sales missed expectations. Both corn and wheat sales were 46% below the four week average.

 

 

Actual

Estimated

Wheat

120

150-350

Corn

839

900-1,400

Soybeans

1,510

900-1,400

 

Ukraine Planting Underway

Planting in Ukraine was reported to be 23% complete. Weather is forecast to be favorable for both spring and winter crops. This year 7.4 million hectares of spring grain is expected to be planted, up from 7.3 million hectares last year.

 

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

April 11, 2018 | Grain Hedge Insights | Kevin McNew | Views: 448

Trump to Delay any Bio-Fuels Reform

Grains Mixed in the Overnight Session

Headlines

Soybeans higher in the overnight on lower world carry-out. Abiove increased Brazil production and export estimates. Trump to delay bio-fuel reform. Exporters sell 120,000 metric tons of Soybeans for delivery to Argentina during the 2018/2019 marketing year.-USDA Exporters sell 141,518 metric tons of Soybeans for delivery to Mexico during the 2018/2019 marketing year.-USDA

April WASDE Highlights

Global soybean carry-out was lower than expected with 90.8 MMT vs 92.9 MMT expected. Global wheat carry-out was larger than expected with 271.20 MMT vs 268.16 MMT expected.  Argentina soybean crop estimated at 40 MMT vs. 42.6MMT expected and down from 47 MMT in March. Argentina and Brazil corn production were both about .75MMT below trade expectations.  Little changed in U.S. corn, soybeans and wheat balance sheets.

Abiove Raises Soybean Estimates

Brazil industry trade group Abiove increased their soybean production forecast in Brazil to 117.4 MMT, up 2.4 percent from March. The group increased their export forecast for Brazil soybeans to 70.4 MMT up sharply from 68.1 MMT in 2017. Abiove expects the amount of soybeans crushed in Brazil to increase to 43.2 MMT.

Plains Forecast

The forecast shows an increased chance of precipitation in the central plains late in the 6-10 day, but forecast remains dry in southwestern plains. The latest forecast shows the chance of rain across much of the winter wheat belt, but confidence in the event remains low. Traders are still concerned about dryness in the region.

Brazil Forecast

Forecast is wetter in the 6-10 day forecast with most moisture focusing on the northern growing regions. Dryness is expected to lower soil moisture in southern and central growing region. The longer range forecast shows chances of below normal rainfall in the northern belt of 2nd crop corn for the month of May. There is potential for some crop stress, but rainfall throughout the rest of the belt should be mostly beneficial.  

Argentina Forecast

Showers forecast in 6-10 day forecast for Buenos Aires, Santa Fe and Entre Rios will slow corn and soybean dry-down and delay harvest.

Trump Administration to Delay Bio-fuel Policy Reform

Reuters reported this morning that Trump will delay any bio-fuels reform for about three months in an effort to shield the farming sector currently worried about the impacts of a looming trade war.  

 

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

April 10, 2018 | Grain Hedge Insights | Kevin McNew | Views: 282

WASDE Report Scheduled for 11 AM CST

Grains Mixed to Down in the Overnight

Headlines

WASDE report scheduled for 11 AM CST. Wheat conditions decline from LW. Perdue says farmers will be protected. Exporters sell 120,000 MT of Soybeans for delivery to Argentina during the 2018/2019 marketing year.-USDA  Exporters sell 132,000 MT of Soybeans for delivery to China during the 2018/2019 marketing year.-USDA Exporters sell 279,000 MT of Soybeans for delivery to unknown destinations during the 2017/2018 marketing year.-USDA

 

April WASDE Report Expectations

Analysts are expecting corn, soybean and wheat ending stocks to increase from the March WASDE report.  Argentina soybean and corn production estimates are expected to be revised lower due to to unfavorable growing conditions.  Brazil soybean production expected to be revised higher.

 

Crop Conditions Report

Corn planting is 2% complete nationally. Missouri corn is only 1% complete compared to a four year avg. of 7% complete. Winter wheat rated 30% G/E, down from 32% LW. Winter wheat rated 35% P/VP, up from 31% LW.

 

Farmers will be protected by Trump

The Agriculture Secretary said on Monday that U.S. farmers will be protected by the Trump administration as rising trade tensions threaten the ag economy.  No details were given by Secretary Perdue, but White House spokeswoman Sarah Sanders said on Monday that the Trump Administration will present a plan shortly.

 

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

April 09, 2018 | Grain Hedge Insights | Kevin McNew | Views: 468

US Grains and Stock Market Rally in Overnight Session

Midwest to Remain Cold

China Pushes Back on US Trade War

China said it would be impossible to negotiate under “current circumstances”. The comments come after U.S. President Donald Trump on Sunday predicted China would take down its trade barriers, and expressed optimism that both sides could resolve the issue through talks. US grains and stock market rally loses steam overnight after initial optimism Sunday night begins to fade. Exporters sell 232,500 metric tons of Soybeans for delivery to unknown destinations during the 2017/2018 marketing year. -USDA

 

Global Soy Trade Realigning

World buyers are turning to US soybeans as Brazil prices soar. Friday brought fresh biz to the EU of 458,000 MT, one of the biggest deals to that part of the world in recent history. Brazil prices have been red-hot of late, elevating to a $2 per bu premium over the board last week before backing off late week to a $1.70 a bu premium.


 

Midwest Weather

Dry weather to continue in the Plains while the Midwest to remain cold. Heavy rains of 1 to 3 inches across much of the Delta over the weekend. Temperatures were quite cold over the weekend across the central U.S., but warmer weather is expected later this week. Another round of cold will return by the weekend, however, which will likely delay corn planting and germination. No improvement is expected in the Plains wheat areas over the next 10 days as dry weather continues.


 

Cold Snap Hits Wheat Belt

Temperatures plummeted across the Plains on Saturday morning, with lows ranging from the low to mid 20s across northwestern Texas to the single digits across far northern Kansas and Nebraska. Temperatures broke daily records across most of the Plains wheat areas, in some cases by very large margins. Temperatures were not quite cold enough across Texas to cause damage to the wheat crop, but some spotty damage was possible in western Oklahoma and portions of central and western Kansas, where some of the crop is beginning to joint and temperatures dropped into the teens.  Much warmer weather prevailed yesterday and damaging cold is not expected over the next 10 days.  
 

Tender Action Overnight

South Korea’s MFG Feed Group bought 125,000 MT of optional origin corn. Australia was the lowest offer for Iraq’s 50,000 MT wheat. US wheat was $30/MT higher than Aussie wheat.

 

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

April 06, 2018 | Grain Hedge Insights | Kevin McNew | Views: 417

Grains Traded Sharply Lower in the Overnight Session

Weekend Precipitation to Favor KCBT Wheat Belt

Headlines

Trump directs U.S. trade officials to ID tariffs on $100 billion more Chinese imports. Argentina expecting rains this weekend and into next week. Cold temperatures across Mid U.S into next week. WASDE report next Tuesday. Exporters sell 458,000 MT of Soybeans for delivery to unknown destinations of which 327,00 MT is for 2017/2018 delivery and 131,000 MT is for 2018/2019 delivery.-USDA  Exporters sell 130,632 MT of Soybeans for delivery to Mexico of which 65,316 MT is for 2017/2018 delivery and 65,316 MT is for 2018/2019 delivery.-USDA Exporters sell 20,000 MT of Soybean Oil for delivery to unknown destinations during the 2017/2018 marketing year.-USDA Exporters sell 100,000 MT of Corn for delivery to Egypt during the 2017/2018 marketing year.-USDA

 

Trump calls for more tariffs

The market traded sharply lower in the overnight session after the White House directed U.S. trade officials to identify tariffs on $100 billion more Chinese imports. China announced it would counter U.S. protectionism “to the end, and at any cost,” in response. The Trump administration responded stated that China’s retaliation was “unfair”. In a statement on Thursday, Trump said “Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers.” He also stated that the U.S. is still open to discussions “in further support of our commitment to achieving free, fair and reciprocal trade and to protect the technology and intellectual property of American companies and American people.”  China formally launched a WTO challenge against Trump’s first round of proposed tariffs yesterday. The China commerce ministry is scheduled to hold a media briefing at 7AM CST.

 

USDA looking to protect farmers from trade war

The USDA is currently having discussions about ways to protect farmers from the fall-out of a trade war. Secretary Bill Northey stated that there are “a lot of good options out there” and that the USDA needs to “see the reaction of what tariffs will be and what the reaction of markets are”. There have been NO specific proposals yet.

Argentina

Rain is expected each day over the next week.  Rain is expected to impact central and southern production areas of Argentina over the weekend and into Tuesday. Rains will slow corn and soybean dry-down.

 

Plains Wheat

Weekend precipitation favoring southeastern KCBT wheat belt. Temperatures are expected to be colder than normal through Wednesday next week. Cold temperatures on Saturday could damage some plains winter wheat; but, damage is not expected to be major.    

 

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

April 05, 2018 | Grain Hedge Insights | Kevin McNew | Views: 525

Grains Extend Rebound in the Overnight Session

Grains Up This Morning

Headlines

Grains extend rebound in the overnight. Soybean export sales beat expectations. Slow planting progress expected to continue in Delta/Deep south.

 

Weather

Plains wheat remains dry in western KS, southeastern CO, western OK and northwestern TX. Southeastern Plains is forecast to receive moisture in the 6-10 day outlook.  The Delta is expected to continue receiving moisture in the 6-10 day outlook which is expected to continue slowing planting progress.

 

Argentina

Showers and thunderstorms are expected today and into the weekend in central and southern production regions of Argentina. More showers are expected to start in southern Argentina and move north from Monday to Wednesday.

 

Brazil

China’s tariff announcement yesterday drove the Brazilian soybean premium 37% higher after already being at record levels during harvest. Brazil soybean harvest is 72% complete up from 65% last week. This is on par with the average harvest pace of 73% at this time. Brazil harvest of 1st crop corn is 60% complete, up 9% from last week and on par with the average harvest pace of 58%.

Ethanol

Ethanol production was mostly unchanged this week at 1.038 million barrels per day vs LW production of 1.039 mbpd. Production was 1.9 percent ahead of last year during the same week. Production needs to maintain 2.5 percent above last year to meet the USDA’s expectations. If production holds steady around these levels and doesn’t dip during the April May time period, ethanol production has a chance to get back on track to meet USDA’s corn used for ethanol estimates. Ethanol stocks slipped lower last week to 942 million gallons from 957 million gallons the previous week. Stocks are now below last years levels by 54 million gallons    

 

Export Sales

Corn and wheat missed analyst expectations, but soybean sales soared. Corn sales were down 34% from LW and down 50% from the four week average. Wheat sales were down 69 percent from LW and 63% from the four week average. Soybean sales increased from last week with strong sales to unknown destinations and 137,400 MT sold to China.

 

 

Actual

Estimated

Wheat

109

200-500

Corn

898

1,000-1,300

Soybeans

1,133

600-900

 

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

April 04, 2018 | Coach’s Corner | Greg Martinelli | Views: 1109

Just Put Me in Coach!

I’ve been in sales for years, why would I need a coach?

Just Put Me in Coach!

As we wrap up the college basketball season, let’s take some time to reflect on all the time and effort the players put into their skills to be at the championship game.  Years and years of grade school basketball, travelling teams that single sported kids join, camps and clinics; all before they ever even get into high school.  Then it’s four years as a starter on the varsity team, followed by scouting trips and video clips sent to the different colleges.  Congratulations! They are now part of a championship team.  Now, it’s 20 hours minimum and maximum per week of practicing, mandated by the NCAA.  Each and every week for four years, it’s 20 hours to the minute, followed by regular classroom requirements. 

At 22 years old, the seniors on a championship college basketball team could have as much as 14 years of continuous training, practicing and preparation for the game. 

Do you think any one of the coaches of the 64+ teams in the bracket said, “Guys, you’ve been doing this for a long time and I don’t think you are really going to learn anything new?” “Let’s just take this month off from practice”?  Not likely. 

Do you think a single player on any of the 64+ teams in the bracket said, “Coach, I’ve been doing this a long time and I don’t need to practice or prepare?  Just put me in the game.”  Not likely. 

And neither should you!  You have way more at stake than they do. Yes, they are on TV and it’s a big deal, but for you, it’s your livelihood, your career and your financial success at stake.

 

What does a coach do?

  1. Help to establish accountability:  Even when we know what to do, we often don’t do it.  The coach helps to call out this behavior and how it holds us back.
  2. Connect the dots:  We are stuck or don’t see a way forward past the walls we run into.  We don’t see the connection between our behaviors and the results we get from those behaviors.  The coach holds up the mirror so we can see ourselves.
  3. Help us be our authentic selves:  We come to work and painstakingly try to be someone we are not.  The coach draws this struggle out into the discussion and holds you accountable to deal with it.
  4. Take us from good to great:  Given enough time, all of us get good at something.  Then we level off or possibly decline or become obsolete.  The coach keeps us moving to get out of this rut and towards greatness.
  5. Find the answers from within ourselves:  Good coaching is not telling, directing nor giving the answers.  It’s about getting the individual to come up with and see the answers for themselves.
  6. Get us from where we are, to where we want to be:  Like a good GPS, coaching involves a discovery process of first establishing where you are, where you want to go and the possible routes you can take.  And just like a GPS, there are several ways to get from point A to point B.  Some faster.  Some easier.  Some riskier, etc.  You choose which, and a coach reminds you to make your choice and keep moving.

Why does it matter?

It works.  Following the launch of a coaching program, companies feel the investment is worth it.  In a 2013 study by the Richardson Company, they surveyed companies that invested in a coaching program and found 86% affirmed they had a positive ROI from their coaching program.  You can ask the people who received the coaching and you hear similar responses.  All three generations in the work force (Baby Boom, Gen-X and Millennial) felt the impact from coaching was very effective.  You can look at their actual performance and again, you see improvement.  Across all three generations, their actual performance improved as well. 

From the Ken Blanchard Company to the ICF (International Coaching Federation), the below results were consistent.  Coaching helps employees:

  • Establish and take action towards achieving goals
  • Become more self-reliant
  • Gain more job and life satisfaction
  • Contribute more effectively to the team and the organization
  • Take greater responsibility and accountability for actions and commitments
  • Work more easily and productively with others (boss, direct reports, peers)
  • Communicate more effectively

So, whether it’s your 1st or your 21st spring planting in your agribusiness career, consider getting a coach to improve your already good performance in sales.

Join us at coach’s corner every other week, where Greg Martinelli offers sales coaching tips for the Ag Sales Professional.

April 04, 2018 | Grain Hedge Insights | Kevin McNew | Views: 434

Grains Sink in the Overnight Session

China Announces 25 Percent Tariffs

Headlines

China tariffs on soybeans sink grains in the overnight. Nov Soybeans fell as low as $9.97 following tariff announcement. Exporters sell 129,000 metric tons of Soybeans for delivery to China during the 2018/2019 marketing year.-USDA Exporters sell 325,000 metric tons of Soybeans for delivery to unknown destinations of which 130,000 MT is for 2017/2018 delivery and 195,000 MT is for 2018/2019 delivery.-USDA

 

China tariffs announced on U.S soybeans

China announced 25 percent tariffs on 105 U.S. products including soybeans, frozen beef and cotton. The list of tariffs also included signature U.S. exports such as Jack Daniels whiskey, Ford automobiles, Tesla electric cars and Gulfstream Jets. China's list of tariffs is a direct response to the Trump administration's plans to add tariffs to $50 billion in Chinese goods announced on Tuesday. China’s counter-measures were announced only 11 hours following. China's rapid response caught many off guard. Analysts were expecting U.S soybeans to stay off limits in the trade dispute because of China’s massive demand for the oilseed. Traders believe China may still have to purchase U.S. soybeans if there is any disruption in South American supplies. The effective date for China’s of these tariffs will be announced at a later time. China shipped around 33 million metric tons of U.S. soybeans last year and replacing that amount of soybeans will not be easy.  

EPA grants major refiner bio-fuels exemption

On Tuesday, the EPA granted three of Andeavor’s smaller refineries with a “hardship” exemption from the bio-fuels regulation. Hardship waiver has been typically reserved for small refinery operations in financial trouble. This is the first example of the EPA granting a large profitable refinery with a waiver from the U.S. Renewable Fuels Standard. This also raises the question as to whether other large refineries will also seek such waivers. Andeavor is on of the nation's largest oil refining companies.  

 

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

April 03, 2018 | Grain Hedge Insights | Kevin McNew | Views: 347

KC Wheat is Trading Higher This Morning

Grains were Up in the Overnight Session

Headlines

Wheat higher on low crop rating. Soybeans rebounds from yesterday's losses. Argentina expecting precipitation

 

Argentina

Wetter weather pattern expected to develop in crop regions. Rainfall is expected to continue over the weekend and into next week bringing 1.5” to 3” of rain to much of the crop-growing regions. Precipitation could provide some benefit to late planted double crop soybeans, but is disrupting drydown and harvest for much of the corn and soybean crops. If rains materialize it could provide some stability to production estimates which have been trending lower since the beginning of the growing season.

Crop Progress and Conditions

KC Wheat is trading higher this morning after winter wheat conditions were lower than expected. The seasons first crop progress and conditions report showed that 32 percent of the winter wheat crop was rated good to excellent compared to 51 percent good to excellent last year. Winter wheat conditions are at their lowest beginning ratings since 2002. Dryness remains across central and southwestern parts of HRW wheat area with little relief in the forecast.   

China Tariffs on U.S Ethanol

China announced on Sunday it will add an additional 15 percent tariff on ethanol imports from the U.S. Analysts say this will keep Chinese buyers from buying U.S ethanol in the near term but that the country will eventually need to source additional ethanol to meet their gasoline blending target of 10 percent ethanol by 2020. Chinese tariffs on U.S ethanol have been at 30% since January 2017 which slowed imports to a trickle.   

 

China Ready for Proportionate Response

Additional tariffs are expected to be announced by the U.S. on $50-$60 billion in Chinese imports. The tariffs are following an investigation under Section 301 of the 1974 U.S. Trade Act.   China’s ambassador to the U.S said that the country is prepared to respond to any additional U.S. tariffs with counter-measures of the “same proportion.”

 

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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More Articles

Tips for Working Safely Around Grain
Graphics: MidWest Plan Service, Iowa State University

Tips for Working Safely Around Grain

April 23, 2018 | Ken Hellevang,Ph.D., PE, Extension Engineer, Professor

Everyone working around stored grain should understand hazards and proper safety procedures
 

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