August 04, 2016 | Grain Hedge Insights | Kevin McNew | Views: 352

Grains Continue their Solid Gains

US Dollar and Equity Futures Positive

Grains yet again came into the morning break with solid gains, but in past sessions have been unable to hold those gains once day-trading commences. In outside markets, crude oil slipped slightly off of yesterday’s sharp advance while the US dollar and equity futures were in positive territory.


Traders continue to look for record large corn and soybean crops this fall. The latest private firm to put out a forecast was Linn Group. They peg the US corn yield at 171.4 and an overall crop of 14.8 billion bushels versus USDA’s July yield of 168 and production estimate of 14.5 billion. For soybeans, they see yield at 48.6 and production at 4.07 billion bushels versus USDA of 46.7 and 3.88. USDA will release their first survey-based estimate of crop size next Friday, August 12th.


US corn prices are competitive in the world market as Brazil has shortage issues and Argentina has significantly higher prices than the US. The only real competitive country is the Ukraine, but even they are a few dollars per metric ton higher than the US. Ukraine’s summer season is proving more problematic for corn growth as dry conditions are stressing about ⅓ of the country’s corn crop.


This week’s export sales were solid for corn and soybeans. Wheat was in-line with expectations. A recent discovery of an unapproved GMO strain of wheat in Washington may hamper Asian trade with the US as countries there look for signs of unapproved GMO wheat in their US imports.




                                   OC-Act       OC-Exp      NC-Act       NC-Exp

Corn                                 331      300-500           896       500-700

Soybeans                          542      300-600        1,128    800-1,200

Wheat                                                                470       350-650


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

August 03, 2016 | Grain Hedge Insights | Kevin McNew | Views: 392
August 03, 2016 | Grain Hedge Insights | Kevin McNew | Views: 279

Soybeans Lead the Overnight Gains

US Dollar Slightly Higher

Grains were higher overnight led by soybeans which posted nearly double-digit gains in the night session. In outside markets, crude was trying to push back to the $40 a barrel mark, and the US dollar was slightly higher as well.


This morning USDA released a new round of flash export sales. There was a 290,000 MT deal for new-crop corn and two soybean deals totaling 697,000 MT with 66,000 MT of that total for old-crop and the remainder to be exported in new-crop.


Brazil's government is working to adjust its regulations regarding imports of genetically-modified organisms (GMO) in order to allow entry of more transgenic varieties from the United States, the Agriculture Ministry said on Tuesday.  The imported GMO corn would restricted to use in animal feed, the ministry said.


Persistent rain in recent days and weeks is delaying Germany's harvest, especially of wheat and rapeseed, creating uncertainty about the crop outcome, the Association of German Farmers said on Wednesday. Wheat harvesting started in mid-July in early areas but rain means work is far from complete. It is possible that German winter wheat yields will be about 10 to 20 percent below last year, it said.


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


August 02, 2016 | Grain Hedge Insights | Kevin McNew | Views: 420

Steep Slide in Soybeans Yesterday

US Dollar Falls to 6-week lows

Steep Slide in Soybeans Yesterday

Grains found little relief overnight following yesterday’s steep slide in soybean prices. Overall the grain complex was mixed. In outside markets, crude oil tried to bounce off of it's $40 a barrel low while the US dollar fell to 6-week lows.


Crop conditions on Monday yet again came in unchanged with corn at 76% and beans at 72% good-to-excellent. Every week seems to bring a bearish surprise as traders look for a small down tick in crop conditions, but USDA conditions have held strong all season long.  Adding to the bearish sentiment, on Monday FC Stone estimated yields for corn at an all-time high of 175 and beans 48.8 bpa with production of 4.05 bb and 15.15 bb respectively. This compares to the most recent USDA yields of 168.0 and 46.7 and production of 14.540 and 3.880.

Brazilian soybean, meal and corn exports are expected to fall to half the level seen last year in August, according to shipping line-ups at the ports, as merchants focus on selling corn on the local market and soy loses its competitive edge abroad. Conab forecast exports of 22 MMT, well below the record 30.2 MMT exported in the previous year. Brazil exported only 7.6 MMT of corn from January through June, according to private-sector data.


USDA Census Crush showed June soybean crush at 4.623 mmt or 154.1 mb which was in line with expectations. The avg. daily rate of crush was 5.137 mb which is down from 5.194 in May. Oil stocks were 2.048 bln lbs vs. 2.063 last month. USDA June corn use for fuel alcohol was 421.31 mb vs. 425.78 last month. Dry mill DDGs were 1.893 mmt vs. 1.845 last month.


Oil prices rebounded sharply on Tuesday after a slide below $40 a barrel triggered some bargain hunting, although analysts said worries about a global glut in the oil market could take prices to as low as $35 in the near term. Other factors — the recent uptrend seen in U.S. oil drilling activities, Libya’s expected return to the oil exporting markets, and the likely output increase by prominent Organization of the Petroleum Exporting Countries members such as Iraq and Iran last month — are also sparking stronger risk-off sentiment across commodities.


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


August 01, 2016 | Grain Hedge Insights | Kevin McNew | Views: 378
August 01, 2016 | Grain Hedge Insights | Kevin McNew | Views: 305

Grains Weak in the Overnight

Weekend weather has been ideal over much of the Midwest

Grains Weak in the Overnight

Grains were mostly weaker overnight with soybeans off nearly 20 cents and corn fading lower to start the week. Wheat managed to hold on to modest gains. In outside markets crude oil slumped lower as the US Dollar tried to reverse Friday’s sharp sell-off.


Weekend weather was nearly ideal over much of the Midwest as highs in the 80s from eastern NE to OH along with good rainfall totals in NE, MO and parts of northern IL made for good growing conditions. U.S. crop weather remains favorable with improved topsoil moisture in the Delta and an opportunity for enough rain to maintain a favorable outlook for the next ten days. Northern-most Midwest crop areas may receive the least rainfall for a little while.


There seems to be growing sentiment of record yield potential in corn and beans, which could spell even lower prices from here. Aug 12 brings the first survey based crop estimates for corn and beans, but before then there will be some crop tours giving on the ground readings. Private firm Planalytic’s has pegged corn yield at 167.4 and soybean yield at 47.2 based on satellite imagery data.


Russian wheat export prices rose last week, boosted by a weak crop in Western Europe. Black Sea prices for Russian wheat with 12.5 percent protein content were $164 a tonne on a free-on-board (FOB) basis at the end of last week, up from $161.5 a week earlier, Russian agricultural consultancy IKAR said in a note. In the US, wheat prices have fallen below France’s price for the first time since 2013. However, Black Sea prices continue to run at about a $10/MT discount.


On Friday, oilfield services provider Baker Hughes said the number of rigs drilling for oil in the U.S. last week increased by three to 374, the fifth straight weekly rise and the eighth increase in nine weeks. Technically, crude oil is approaching its 200-day moving average around $40.60 and could suggest. If prices remain supported here, it would suggest that Crude Oils Summer decline has been a retracement in a developing uptrend. Alternatively if Crude Oil prices drop below the SMA, it would suggest that prices are trending lower.


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

July 29, 2016 | Grain Hedge Insights | Kevin McNew | Views: 350

Weekly Cash Comments

Weekly Cash Commentary for week ending 07/29/2016

Spot grain basis found modest support this week as futures markets continued to erode in the face of ample supplies this fall. On the week, spot corn basis was up 1.6 cents on average while spot soybean basis was up 1.2 cents on average.


For corn, river terminals were the big winners this week gaining nearly 4 cents a bushel. Unseasonably strong exports continue to keep basis levels firming at export sensitive markets. Meanwhile, ethanol plants were up only 1.5 cents on average this week.


Conversely, soybeans saw only fractional gains of 0.3 cents a bushel at river terminals as export activity slows down along normal seasonal lines. However, soybean plants were up 3.2 cents a bushel on the week.


Looking ahead to new-crop bids, basis levels are generally weaker for corn when comparing the same elevator new-crop basis now versus 2015. On average, new-crop corn basis is off 4 cents from the same time last year, but beans are on par with basis levels being offered this time 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)


New-Crop Basis Bids For Same Elevator Comparisons: 2016 vs 2015

July 29, 2016 | Grain Hedge Insights | Kevin McNew | Views: 225

Grains Continue to Grind Lower

Crude Oil hits fresh lows in the overnight session

Grains continued to grind lower overnight with soybeans suffering the biggest loss. Outside markets were also weaker as crude oil hit fresh lows, approaching $40 a barrel.


The International Grains Council on Thursday raised its forecasts for global corn production in the 2016/17 season, largely reflecting improved crop prospects in the United States.  World corn production was upwardly revised to 1.017 billion tonnes, up from a previous projection of 1.003 billion and the prior season's 968 million.
The IGC also raised its forecast for global wheat production in 2016/17 to 735 million tonnes, up from a previous projection of 729 million but still marginally below the prior season's 736 million.


On Thursday, USDA’s export sales report was disappointing for soybeans, but flash sales announcements by USDA added 457,000 MT to potential future sales. Year-to-date new-crop soybean deals stand at 9.7 MMT well off of recent years where the US has booked 15 MMT by this time of year.


Crude oil continues to slump on oversupply fears. Along with oversupply in oil, there continues to be a gasoline glut worldwide. Investors will be watching for the weekly U.S. drilling report due later Friday for clues to the supply situation. Previous data from industry group Baker Hughes has shown an increase in oil drilling activities in the U.S. for four consecutive weeks.


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

July 28, 2016 | Grain Hedge Insights | Kevin McNew | Views: 350
July 28, 2016 | Grain Hedge Insights | Kevin McNew | Views: 314

Corn and Wheat Post Modest Gains Overnight

Crude Oil continues to come under pressure

Grains were mixed overnight with corn and wheat posting modest gains while soybeans sank into negative territory by the end of the night session.  Crude oil continued to come under pressure, falling below $42 for the first time since April.


Spring wheat yield prospects in central and northwest North Dakota are down from a year ago but still above average, scouts on an annual crop tour said on Wednesday.  The Wheat Quality Council tour calculated an average yield for 158 hard red spring wheat fields scouted in the region at 46.9 bushels per acre (bpa) on the second day of a three-day crop tour. The figure compares with the 2015 Day Two yield of 47.3 bpa and the five-year average of 45.7.


French consultancy ODA said it expects soft wheat production in the European Union to drop to 134 million tonnes this year, down 17 million from a record 2015 harvest, due to weather hit-yields in France and other parts of western Europe.

The estimate, posted late on Wednesday on ODA's Twitter account, was well below the European Commission's current forecast of 144.6 million tonnes made at the end of June and the 145.5 million tonnes estimated by fellow consultancy Strategie Grains in mid-July. As well as a widely expected plunge in French production, due to the impact of torrential rain, limited sunshine and crop disease, ODA said it expected similar problems in the Benelux countries, southern England and southern and western Germany.


    Weekly Export Sales


                      OC-Act     OC-Exp       NC-Act     NC-Exp

Corn                  438      300-500          476       450-650

Soybeans             -1      250-450          678        600-800

Wheat                                                506        400-600


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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