September 20, 2016 | Grain Hedge Insights | Kevin McNew | Views: 227

Grains Start the Day in Positive Territory

US Dollar Slightly Higher

Grains were again in positive territory to start the day with soybeans leading the complex higher. In outside markets, the US dollar was slightly higher as were equities while crude oil was slipping lower going into the start of the day session.

 

USDA’s crop progress report showed on change in the condition of the US corn and soybean crops, as both held steady on the week at 74% and 73% good-to-excellent, respectively. Corn harvest came in a little below expectations with 9% of the crop harvested versus an average trade expectation of 11%. Soybean plantings were at 4%, which was inline with expectations but slightly below the 5-year average pace of 5% harvested at this time of year.

 

Russia is expected to harvest a grain crop of between 110 and 116 MMT this year, Agriculture Minister Alexander Tkachev told a conference in Moscow on Tuesday. The country's grain exports may total 35-40 million tonnes in the 2016/17 marketing year which started on July 1, he added. The ministry had previously expected the crop in a range of 113 million to 116 million tonnes

This morning Stats Canada revised higher their wheat crop forecast.  They pegged all wheat output up 14.3% to 31.32 MMT vs 27.39 MMT in 2015. Canola output was seen as unchanged at 18.31 MMT as compared to the same output level in 2015.

 

The U.S. Federal Reserve's two-day Federal Open Market Committee meeting on interest rates begins today. The meeting concludes on Wednesday with an interest rate decision due at 1 p.m. CDT.

 

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


 

September 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 290
September 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 216

Soybeans Post Double Digit Gains

Equities Higher to Start the Week

Soybeans posted double digit gains to hit a one-week high to start the day while corn and wheat gains were limited to a few cents. In outside markets, crude oil found strength and helped push equities higher to start the week.

 

Crop consultant Safras pegs Brazil's 2016/17 corn crop at a record 92.3 MMT versus 70.75 MMT in 2015/16 . They expect summer crops planted area for corn to rise 7.8% from year ago to 4.21 million hectares. The increase in summer crop area is linked to the improved price of the grain in comparison to soybeans.

 

Dry soil could hit the sowing of winter grain in Ukraine, analyst UkrAgroConsult said on Monday.
Winter wheat accounts for 95% of Ukraine's overall wheat output, and the winter crop is also a significant part of the barley harvest. The consultancy said in a statement the average daily temperature was up to 6 degrees Celsius higher than the norm, and that had created poor conditions for preparing the soil for winter sowing.

 

Egypt was again tendering for wheat. But their last tender met with silence as no global sellers offered up wheat because of strict Ergot restrictions.

Oil prices rallied on Monday, after Venezuela said a deal to stabilize the global oil supply is imminent between nations inside and outside the Organization of the Petroleum Exporting Countries.

 

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

September 16, 2016 | Grain Hedge Insights | Kevin McNew | Views: 239

Weekly Cash Comments

Weekly Cash Commentary for week ending 09/16/2016

National basis levels moved lower after a taking a break last week. Historically basis levels are pegged to keep moving lower until mid to late October.

 

On average, corn lost 1/2 cents per bushel.  Ethanol plants were down 1 cent per bushel this week. Corn basis along the river was off the most losing almost 3 cents. Basis along the river and at the gulf typically gets hit the hardest this time of year.

 

Soybean basis was hit especially hard this week off almost 4 cents nationally. Crush facilities took the lightest blow losing 2 3/4 cents. NOPA reported that soy processors crushed 2.6 percent fewer beans in August than a year ago and the pace fell below market expectations due to declines at plants in the Southwest. Soybeans along the river were the biggest loser, off 7 1/4 cents.

 

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

September 16, 2016 | Grain Hedge Insights | Kevin McNew | Views: 175

Disappointing NOPA Crush Numbers

Possible interest rate hike

Grains were weaker to start the day as outside markets for equities and oil were lower on thoughts that the Fed might raise interest rates next week.

 

Yesterday, NOPA soybean crush figures were a disappointing 131.8 MB for the month of August. That compared to an average analyst estimate of 136.2 MB and an August of 2015 crush of 135 MB.

 

In overnight news, global wheat sellers sat on their hands for the latest round of Egyptian wheat tenders. Egypt's state grain buyer, the General Authority for Supply Commodities (GASC), did not get any offers from global wheat suppliers at its purchase tender on Friday on the back of continuing worries over the country's ergot fungus policy, Cairo-based traders said.

 

In weather news, overnight rains in the Western Cornbelt with heavier rains near Nebraska/Iowa & Iowa/South Dakota borders will slow harvest there. Rain is expected to head east next 2 days and favor OH/IN. Next week should be more favorable for dry conditions and harvest progress.

 

This morning fresh inflation data in the US showed consumer prices were rising faster than expected. That put Fed watchers on alert for a potential interest rate hike at the Fed meeting Sep 20-21. The US dollar index is up 0.5% while crude oil and equities are lower. The Baker Hughes rig count later today should provide more guidance for crude oil .US rig count numbers have been increasing steadily since the end of May.

 

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

September 15, 2016 | Grain Hedge Insights | Kevin McNew | Views: 227
September 15, 2016 | Grain Hedge Insights | Kevin McNew | Views: 191

Grains Struggling to Hold Modest Gains

Crude and Equities also trying to recover from yesterday's sharp sell-down

Grains were struggling to hold on to modest gains going into the morning break. Outside markets saw crude oil and equities also try to recover from yesterday’s sharp sell-down.

 

NOPA soybean crush figures are due out later this morning and are expected to reach 136.2 million bushels for the month of August. That would be a record large figure for the month if realized. Estimates range 128 to 142 MB.

In weather news, the Midwest should see rains return tonight into the weekend before breaking early next week. The long-term forecast for 16-30 days shows a wet trend, potentially slowing the US harvest.

 

Export sales this morning were unimpressive with all three commodities coming in at the low end of expectations for the week.

 

WEEKLY EXPORT SALES

                                         Actual     Expected

Corn                                     724      800-1,100

Soybeans                            1,012     900-1,200

Wheat                                   402       350-550

 

On Wednesday, EIA crude oil stocks were off for the week coming in 50,000 barrels below last week. Traders had expected a 3.8 million barrel build. However, gasoline stocks ballooned on the week helping push oil prices lower.

 

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

September 14, 2016 | Grain Hedge Insights | Kevin McNew | Views: 235
September 14, 2016 | Grain Hedge Insights | Kevin McNew | Views: 125

Grains Slightly Weaker in Overnight Trade

Crude Oil Continues to Dip Lower

Grains were unchanged to slightly weaker in overnight trade while in outside markets equity futures tried to recover some of yesterday’s sharp losses while crude oil continued to dip lower.

 

Yesterday, Argentina's government said they were considering postponing a tax cut planned for next year on soy exports, as a recession in Latin America's third-largest economy eats into fiscal revenue. Also, Argentine farmers are expected to harvest at least 15 MMT of wheat in the 2016/17 crop year versus 11.3 in the previous season. Wheat planting in Argentina expanded dramatically when President Mauricio Macri eliminated export taxes soon after his December inauguration.

 

Japan's Ministry of Agriculture is seeking to buy a total of 149,231 tonnes of food quality wheat from the United States, Canada and Australia in a regular tender that will close late on Thursday.

 

The US has issued a challenge with the WTO for China's price supports for domestic production of rice, wheat and corn. The US Trade Representative's office said China's "market price support" for these grains was estimated to be nearly $100 billion above the WTO limits and constitutes an artificial government incentive for Chinese farmers to increase output.

The American Petroleum Institute (API) is reporting a 1.4-million-build in US crude oil inventory over last week—bursting the bubble created the week before when official data showed the biggest draw on inventory in a century. Still, the build is much lower than expectations of a 4-million-barrel build, in part because the release of shut-in oil following a Gulf of Mexico hurricane.

 

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


 

September 13, 2016 | Grain Hedge Insights | Kevin McNew | Views: 209

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