April 07, 2016 | Kevin McNew | Views: 534
April 07, 2016 | Grain Hedge Insights | Kevin McNew | Views: 279

Crude Oil Gives up Yesterday’s Gains in the Overnight

Yesterday, Monsanto CEO Hugh Grant said his company seed sales suggest a corn acreage number lower than USDA’s forecast

Grains were lower overnight while in outside markets stock indices and crude oil gave up some of yesterday’s sharp gains.

 

Brazil’s government sees 2015/16 soybean crop 98.98 MMT versus last month’s forecast of 101.18 MMT. For corn, they peg the crop AT 84.66 versus 83.52 as the forecast in March.

 

In export news, South Korea bought some Australian wheat, while Egypt’s GASC tendered for wheat overnight with the lowest price coming in at $183/MT and no US interests were submitted for the tender.

 

Yesterday, Monsanto CEO Hugh Grant said his company seed sales suggest a corn acreage number lower than USDA’s forecast of 93.6 million acres. Although he did not give a specific forecast, Grant suggested a number greater than 90 million acres based on year-on-year company seed sales.

 

WEEKLY EXPORT SALES

 

                         OC Actual         OC Expected         NC Actual     NC Expected

Corn                      945.2             800-1,000                175.1             0-200

Soybeans               420.4                150-350                   1.5              0-200

Wheat                   -58.1                150-350                159.3            50-150

 

EIA crude stocks were down sharply on Wednesday as the government agency estimated US crude inventories were off nearly 5 million barrels. Analysts had been expecting a 3.15 million barrel build in stocks for the week.

 

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

April 06, 2016 | Grain Hedge Insights | Kevin McNew | Views: 326
April 06, 2016 | Grain Hedge Insights | Kevin McNew | Views: 279

Grains Head Lower in the Overnight Session

In outside markets, crude oil was higher as were stock index futures

Grains headed lower in the overnight session with wheat leading the complex to lower on improved crop ratings. In outside markets, crude oil was higher as were stock index futures.

 

On Tuesday, USDA pegged the US wheat crop at 59% good-to-excellent versus expectations of 57% from analysts. That is up above 44% at the same time last year and the five-year average of 42%. However, key HRW states of KS, OK & TX were all lower on the week seeing crop condition ratings slip over last week.

 

In Brazil, private consultant Celeres raised their soy and corn crop forecast, pegging soybeans at 99.9 MMT versus their previous forecast of 99.1 and lifting corn to 87.5 MMT from a previous forecast of 87.1.

 

Corn found modest strength on Tuesday, gaining ground on soybeans as traders unwound short corn/long bean spread trades. Corn rose to its highest in almost a week on talk U.S. farmers may plant more soybeans instead of the corn sowings they previously planned. Soybeans were lower, in turn weakened by prospects of larger U.S. sowings, but saw some support from rain hindering Argentina's harvest.

 

In oil, API weekly data showed crude oil stocks were down 4.3 million barrels versus trade estimates which expected a 2.9 million barrel build. This is the first time weekly data has shown a drop in crude stocks since mid-February. EIA official government data will be released at 9:30 CDT, with expectations for a 3.15 million barrel build.

 

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

April 05, 2016 | Grain Hedge Insights | Kevin McNew | Views: 326
April 05, 2016 | Grain Hedge Insights | Kevin McNew | Views: 222

Grains Were Mixed in the Overnight

Stock futures were on the defensive giving up nearly 0.75%

Grains were mixed overnight with wheat adding to Monday’s losses while corn and beans started the day in positive territory. Stock futures were on the defensive giving up nearly 0.75% while crude oil was soft as it continues its slide over the past week.

 

Malaysian palm oil futures rose on Tuesday, heading for their third straight session of gains on the back of a weaker ringgit MYR=, outweighing worries that an export tax on crude palm oil would dampen demand. Malaysian palm oil inventories in March are forecast to have dropped below 2 million tonnes, breaching that level for the first time in a year, with production coming in at the weakest for the month since 2007, a Reuters survey showed. Shrinking stockpiles at the world's No.2 palm oil producer as a crop-damaging El Nino weather pattern crimps output could underpin benchmark prices of the tropical oil, which have risen over the past two months and reached a two-year high.

 

Analyst Ukragroconsult raised its forecast for Ukraine's 2016 wheat harvest to 18.5 million tonnes on Tuesday, against a previous estimate of 17.7 million tonnes. The consultancy's Yelizaveta Malyshko told Reuters that very favorable weather this spring and optimal moisture content in soil were the main reason for the improved outlook. Ukraine, the world's third-largest grain exporter, harvested 26.5 million tonnes of wheat in 2015.

 

Weather continues to point to good odds of the Plains getting some moisture between Apr 10-15.  However, weather models of late are showing better rain potential more towards the central Plains and less towards the Western Plains were the most severe drought issues are occurring. KC wheat still has support at $4.60 but needs to find a breakout above $5 to change the choppy patterns of late.

 

Stocks were on shaky ground on Tuesday as the IMF warned of potential risk from developing markets. Major emerging markets, led by China, are increasingly likely to spread fear to financial markets, leading to poor stock performance in the U.S. and other developed countries, the International Monetary Fund said. In oil, prices continue to sink as traders discount any deal to curb production by OPEC in the meeting this month. Recent comments from Saudi Arabia cast doubts about the ability of world oil producers to agree to an output freeze at their meeting in Qatar.

 

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

April 04, 2016 | Grain Hedge Insights | Kevin McNew | Views: 353
April 04, 2016 | Grain Hedge Insights | Kevin McNew | Views: 413

Soybean Prices Continue to Move Higher

Crude was in Positive Territory after being off as much as 50 cents a barrel

Grains started the Sunday night session in positive territory with soybeans leading the complex higher, but by morning the market began to fade. Wheat and corn were in negative territory while soybeans held on to slim gains. In outside markets, crude was in positive territory after being off as much as $0.50 a barrel while the US dollar and stock futures had small gains.

 

In soybeans, prices continued to move higher hitting their highest mark since August. But, weakness in palm oil overnight kept soybean prices in check. Malaysian palm oil futures slid in early trade on Monday as a stronger ringgit and expectations for a drop in exports as an export tax restarts this month weighed on the market. The palm oil contract fell 0.7%.

 

In export news, three South Korean groups purchased a total 192,000 MT of corn set to be sourced from the United States or South America in private deals on Friday, European traders said on Monday. The deals followed a purchase of some 272,000 MT of corn also likely to be sourced optionally from the United States or South America by South Korea's largest feedmaker Nonghyup Feed Inc. (NOFI) in a tender which closed on Friday, traders said.

 

For wheat, rains looked more likely in key US HRW areas in the coming week with the best chance for rain in the window Apr 10-15. On Friday, Western KS had only about a 20% chance of rain during this time period but by Monday that probability had grown to about 60%.

 

In crude oil, Friday swathe latest US rig counts fall to 362 from 372 in the previous week marking the lowest weekly total since November 2009. However, Iran’s oil minister on Sunday said the country’s oil exports jumped again in March, potentially undermining a global deal to limit crude output and raise prices.

 

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

April 01, 2016 | Grain Hedge Insights | Kevin McNew | Views: 277

Weekly Cash Comments

Weekly Cash Commentary for week ending 04/01/2016

Soybean basis was on the defensive this week as higher futures and a sharp sell-off in corn pushed farmer sales towards cash beans. For the week, US average soybean basis was off 2.3 cents while corn basis was flat.

 

In soybeans, the biggest losses occurred at river terminals with the average decline at 5 cents on the week. Part of the weakness was tied to a 4-cent loss at the Gulf, but higher barge rates and active farmer selling put some losses as much as 8 to 12 cents a bushel on the week for key river terminals. At soy plants, basis was also weaker by 1.9 cents on the week, but the weakness at soy facilities has been muted as crush margins re higher as of late.

 

For corn, basis levels were mostly flat this week although river terminal strengthened slightly on a 1-cent gain out of the Gulf. Ethanol plants were unchanged as a group although there was some noted bidding up by 2 to 4 cents in the Western Cornbelt.

 

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

April 01, 2016 | Grain Hedge Insights | Kevin McNew | Views: 344

Grains Mostly Weaker in the Overnight

In outside markets, stocks were lower on unemployment ticking up

Grains were mostly weaker overnight with corn still feeling the sting from yesterday’s shockingly high corn acre number. In outside markets, stocks were lower on unemployment ticking up slightly to 5% from 4.9%.

 

Yesterday brought news that US farmers intend to plant 93.6 million acres of corn, 5.6 million more acres than in 2015. This was well above average estimates of 90 million acres and above the high end of analyst estimates at 91. The increase was most prominent in the Plains and Delta region which combined added 3.4 million acres, and the states of AR, LA & MS where flooding is a major issue were pegged to increase by 1 million acres combined.

 

Wheat was definitely the benefactor of higher corn acres seeing a 5 million acre drop to 49.6 million. This would be the lowest wheat acres in 45 years if realized.  This has the potential to draw down carryout in 2016 especially if exports recover from their big slump in 2015. With a weakening US dollar it seems likely wheat exports will come back in 2016.

 

For soybeans, acreage estimates of 82.2 million were just below the average estimate of 83.1 and below last year’s plantings of 82.7. However, even with normal yields and usage numbers on par with this year it would still lead to a jump in carryout from 460 MB to over 600 MB. Also, many analysts expect farmers to be more likely to switch out of corn into soybeans as prices have rallied since the March 1 survey of farmer planting intentions.

 

Overall this report was not favorable for the long-term outlook on grains. Even wheat which saw the biggest bullish input faces a big uphill climb to gain more competitiveness in the world market as the global glut keeps prices on the defensive.

 

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

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