November 09, 2015 | Grain Hedge Insights | Kevin McNew | Views: 271
November 09, 2015 | Grain Hedge Insights | Cody Bills | Views: 252

Soybeans Start the week in Positive Territory

Grains were mixed overnight as soybeans started the week in positive territory while wheat slid lower.

Grains were mixed overnight as soybeans started the week in positive territory while wheat slid lower. Corn was mostly unchanged going into the start of the regular trade session. In outside markets, S&P futures and the dollar were lower while crude oil bounced back to hover around the key $45 a barrel level.

 

Trade ranges in grains will likely be limited in the next two sessions as traders await the latest Supply and Demand forecasts from USDA. For both corn and soybeans, traders look for better US production as compared to USDA in October. Analyst are penciling in higher yields which leads to an overall corn production estimate of 13.579 BB (with a range of 13.435-13.718) versus USDA’s forecast in October of 13.555. For soybeans, analysts look for 3.915 (range 3.895-3.955) versus USDA in October at 3.888 BB. Likewise, ending stocks are expected to be bumped up by USDA in Tuesday’s report, which will be released at 11 am CDT.

 

In Australia, harvest is underway for wheat but rains throughout much of the country are slowing the pace. Concerns on quality are appearing however in some locations but it is still too early to determine a bigger picture with just 15% of the crop received so far. The rains across the country will have an impact on quality however the extent of this will be only known over the coming month.

 

In outside markets, Friday saw a big jump in the US dollar as a stronger than expected jobs report put traders on alert for an interest rate hike at the Fed’s December meeting. The Dec US dollar index futures (DX-MZ5) reached its highest point on Friday since April 2014. The strong dollar makes US exports of commodities more expensive to foreign customers and is limiting export sensitive commodity gains.

 

In crude oil (GCLZ5 / QMZ5), prices recovered a bit in overnight trade as the US dollar weakened. China’s trade figures disappointed analysts’ expectations by a wide margin in October, reinforcing views that the world’s second-largest economy will have to do more to stimulate domestic demand given softness in overseas markets. According the CFTC data, hedge funds raised their bullish wagers on U.S. crude this week by the most in six months as speculators bought into oil contracts in forward months on the bet market fundamentals will take time to improve.

 

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

November 06, 2015 | Grain Hedge Insights | Kevin McNew | Views: 293

Beans Finding Low End Resistance

National soybean basis was up 5 cents this week. Kevin breaks down what he thinks will happen if Soybeans continue lower than the $8.58 mark.

November 06, 2015 | Grain Hedge Insights | Cody Bills | Views: 290

Weekly Cash Comments

Weekly Cash Commentary for week ending 11/06/2015

Basis levels continued to ascend higher this week all the while futures markets came under selling pressure.  For the week ending Thursday, Nov 5th, US average corn basis was up 3 cents a bushel while bean basis posted a nearly 5-cent advance on the week.

 

Basis levels in corn and beans both continued to be supported by plummeting barge rates. On the week, IL River barge rates gave up 5 cents a bushel, which helped push terminal corn bids higher by 4.4 cents a bushel and soy bids up by 7 cents a bushel. At the Gulf, it was a mixed week as export terminal bids were off 2 cents on corn and up 3 cents on beans.

 

For end users, basis levels were up at corn ethanol plants gaining 4 cents a bushel versus 3 cents a bushel on the US average.  Weekly ethanol production was up sharply according to EIA gaining to 969,000 BP versus 944,000 BPD in the previous week. Likewise, soybean crushing plants posted better than normal results with a 5.3 cent advance.

 

Look for basis levels for both corn and beans to continue to capitulate in the next two months on slow farmer selling and weak to lower futures markets.

 

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

November 06, 2015 | Grain Hedge Insights | Cody Bills | Views: 269

Grains Lower on Follow-Through Weakness

Stock futures get a jolt this morning

Grains were lower on follow through weakness from Thursday’s losses In outside markets, S&P futures and crude oil were higher.

 

Soybeans suffered a 20-cent loss on Thursday after news from USDA showed significantly below expectations on export sales the past week. Sales of soybeans were only 655,600 MT versus trade expectations of 1,400,000 to 1,800,000 MT. Wheat was also substantially below expectations with an anemic 87,000 MT of sales as compared to 300- to 500,000 MT expected by the trade.

 

Trade estimates ahead of USDA’s supply and demand report on Tuesday show analysts expect USDA to bump up production and carryout estimates. Ending stocks of corn are expected to go to 1,597 MB from 1,561 MB in October while for soybeans the stocks figure is expected to go from 425 MB in October to 436 MB in November.

 

In international weather, Brazil continues to see beneficial rains as planting progress moves ahead. Central and Southern Brazil are expected to see rains return by mid-November which should help in crop development.

 

Stock futures got a jolt this morning as better than expected labor data showed unemployment shrinking. This caused traders to put more weight on the likelihood of a potential interest rate hike by the Fed in their December meeting. The news sent the US dollar hit a 6 month higher on the news which was bearish for US commodities like oil. 

 

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

November 05, 2015 | Grain Hedge Insights | Kevin McNew | Views: 306
November 05, 2015 | Grain Hedge Insights | Cody Bills | Views: 258

Grains Mildly Lower in the Overnight

Rate Hikes possible in December

Grains were mildly lower overnight as the markets continue to hold steady to price levels seen over the past two months. In outside markets, crude oil was hovering around the unchanged mark from Wednesday’s trade, while S&P futures posted positive gains to get it back above the 2,100 mark.

 

Corn found some strength in demand yesterday as EIA reported a sharply higher weekly ethanol production figure of 969,000 BPD versus last week’s 944,000 BPD and the highest mark for the current corn marketing year.  In South Africa, planting has been deterred by dry weather. Rainfall in the past 30 days has only been 37% of normal and the outlook for the next week or so is for dry conditions to persist and temperatures are expected to be well above normal.

 

In wheat, prices were off their 4-week high as forecasts for more rain relief in dry U.S. growing belts offset concerns about adverse harvest weather in Australia, and turned attention back towards large global supply. Overnight, Egypt announced policy plans to subside domestic farmers in attempt to curb wheat imports and costs. Iraq also announced it was cancelling its tender to buy 50,000 MT of hard wheat. Meanwhile, Japan bought 129,663 MT of food wheat, with about one-third of the deal going to US suppliers and the rest going to Canada and Australia.

 

Looking ahead to Tuesday’s USDA crop report, a poll of analyst shows the average guess for US corn production at 13,579 MB versus USDA’s October forecast of 13,555 MB while for soybeans the expectation is for a slight bump 3,915 MB from the October USDA forecast of 3,888 MB.

 

In S&P futures (ESZ5), better-than-expected services industry data and comments yesterday from Fed Chair Janet Yellen that the economy is performing well enough to possibly raise rates in December put the brakes on a rally that had carried the S&P 500 to within 1 percent of its record. Fed Bank of New York President William Dudley backed Yellen’s stance, while Fed Vice Chairman Stanley Fischer expressed confidence that inflation isn’t too far below the central bank’s goal. Fed Bank of Atlanta President Dennis Lockhart is among central bank officials speaking today.

 

For crude oil (GCLZ5 / QMZ5), prices fell sharply on Wednesday as a strong dollar, tumbling gasoline prices and rising U.S. crude inventories bore down on the market. Adding to bearish sentiment was an internal OPEC document published by Reuters that showed weaker demand in the next few years for oil from the producer group, even as Saudi Arabia pumped near record levels to protect its market share. U.S. crude inventories rose for the sixth consecutive week, adding 2.85 million barrels last week, in line with forecasts, in spite of a drop in imports to the lowest level since 1991, the U.S. Energy Information Administration (EIA) said.

 

WEEKLY EXPORT SALES

 

                                         Actual           Expected

Corn                                     556              450-650

Soybeans                            655.6        1,400-1,800

Wheat                                 84.6              300-500

 

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

November 04, 2015 | Grain Hedge Insights | Kevin McNew | Views: 227
November 04, 2015 | Grain Hedge Insights | Cody Bills | Views: 210

Soybeans Find Support in the Overnight

On Tuesday, Informa came out with its latest estimates for 2015 US corn and bean production. Both estimates were higher than USDA’s October forecast

Grains were mixed overnight as soybeans found modest support while corn and wheat lost ground from Tuesday’s close. Oil added on to Tuesday’s gains, surpassing $48 a barrel while S&P futures also moved into positive territory.

 

On Tuesday, Informa came out with its latest estimates for 2015 US corn and bean production. Both estimates were higher than USDA’s October forecast as the private analyst firm looks for 170 bushel corn yields and 47.9 soybean yields. This compares to 168 and 47.2, respectively, by USDA in October. Overall production is pegged at 13,718 MB for corn and 3,952 MB for soybeans by Informa and up from USDA’s October estimates of 13,555 MB and 3,888 MB. The next USDA WASDE report is Tuesday, November 10th.

 

In overnight news, Australia is getting heavy rains on its eastern wheat crop, which has traders concerned about quality deterioration as it nears harvest.  Up to 50% of the crop could potentially be impacted. In tender news, US got a rare new deal with the Taiwan Sugar Corp which announced it purchased 23,000 MT of US corn and 12,000 MT of US soybeans.

 

US spot basis levels continue to increase with harvest nearing completion and farmers holding tight to supplies. Both ADM and Green Plains CEOs said that they are seeing substantially lower farmer sales than normal for this time of year. US average corn basis is up 7 cents a bushel in the past two weeks, and should continue to rise steadily over the remainder of the calendar year baring a big rally in futures.

 

S&P (ESZ5) futures got above the pivotal 2,100 mark for the first time since July 20th, and has now completely erased the losses after China’s meltdown in late summer. Investors will look to Fed Chief Janet Yellen for clues to the next interest-rate rise as she is scheduled to give a speech today. Also, a report on private-sector employment will be released ahead of the opening bell, offering a fresh sense of the jobs environment ahead of the closely watched nonfarm-payrolls report due Friday.

 

Crude oil continued its move higher overnight following Tuesday’s impressive 3.8% gain. Gains were tied to a 6% jump in gasoline prices and a strike in Brazil that cut around half a million barrels of output in the first 24 hours and has slowed state-run Petrobras' daily oil output by around 25 percent. EIA will release new inventory data today, with traders looking for a buildup in stocks by 2.8 million barrels.

 

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

November 03, 2015 | Grain Hedge Insights | Kevin McNew | Views: 299

Corn Basis Continues to Rally

After rallying this morning and in the overnight beans took a dive lower to close the day. Informa numbers were also released today.

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