April 04, 2018 | Grain Hedge Insights | Kevin McNew | Views: 441

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: 351

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)

April 02, 2018 | Grain Hedge Insights | Kevin McNew | Views: 391

Acreage Surprise on Thursday will Drive Trades Today

Grains Up in the Overnight Session

Headlines

Acreage surprise on Thursday will drive the trade on Monday. First Crop Progress and Conditions report of 2018 scheduled for released today. Better than expected rains over the weekend in Argentina.  

 

Planting Intentions Give Bullish Surprise

Grains trade higher with follow-through buying after a bullish surprise in the planting intentions report. Soybean acres were lower than expected at 88.9 million acres vs 91.1 expected. This was a BIG surprise and was 1 million acres below the lowest estimate.

Corn acres were reported at 88 million acres vs 89.4 million acres expected. Spring wheat acreage was higher than expected with 12.6 million acres reported vs 11.4 million acres expected.

 

Argentina

Weekend rains were heavier and more widespread than expected. Rains covered western and south central parts of Argentina. Weather is expected to be drier over the next few days with temperatures dropping. More showers are expected by the end of the week and the 6-10 day outlook looks to bring more moisture. Corn harvest is 18 percent complete and soybean harvest is 8.8 percent complete according to the Buenos Aires Grain Exchange. Late and 2nd crop corn is at the grain-filling stage throughout Cordoba, Buenos Aires and Santa Fe.

 

Brazil

Showers over the weekend slowed soybean harvest but helped 2nd crop corn. Precipitation is expected in the northern grain producing regions over the next 10 days and stay dryer in the southern regions.   

Crop Progress and Conditions

The USDA will restart its Crop Progress and Conditions report today. The report is issued weekly from April through November. Traders are expecting winter wheat conditions to show significant damage to winter wheat crops over the winter. Recent conditions reports have been state specific reports.

 

Monthly Oilseed Crushings

Scheduled for release at 2 PM CST.  The average analyst guess expects 163.5 million bushels of soybeans were crushed in February. The range of guesses spans from 162.5 million bushels to 164.9 million bushels.  


 

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

March 29, 2018 | Grain Hedge Insights | Kevin McNew | Views: 570

Prospective Plantings and Quarterly Stocks Report Thursday Morning

Grains Were Mixed in the Overnight Session

Headlines

Prospective Plantings and Quarterly Stocks out @ 11 AM CST. Soybean export sales disappoint. Ethanol production & stocks decline. Exporters sell 266,500 metric tons of Soybeans for delivery to unknown destinations during the 2017/2018 marketing year. -USDA

 

Weather

Precipitation (.25”-1.5”) fell in east central CO, eastern OK and eastern TX yesterday. More precip in northeastern CO and eastern OK today. Dry weather in Argentina through Friday. Some showers (.25”-1.5”)  forecast for northern Santa Fe, La Pampa, southern Cordoba and western Buenos Aires late this weekend into Monday.

Rains in Brazil favor Safrinha corn crop.   

 

Ethanol Production

Ethanol production declined to 1.039 million barrels per day from 1.049 MBPD LW. Production was 1.4% below last years same week production. Ethanol needs to run 2.8 percent above LY production levels to meet USDA corn used for ethanol estimates.

2016 and 2017 both saw ethanol production decline slightly between late March and May. Ethanol production cannot afford to dip during that time period this year, in order to stay on track with USDA’s corn used for ethanol projections. Ethanol stocks declined last week to 957 million gallons from 998 million gallons. The sharp decline in stocks was the largest single week drop since 2013.  

Export Sales

Soybean sales missed expectations,and were down 58 percent from LW. Corn sales met expectations, but declined 8 percent from LW.  Wheat sales met expectations and was up 33 percent from LW.

 

 

Actual

Estimated

Wheat

353

200-400

Corn

1,353

1,200-1,500

Soybeans

317

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)

March 27, 2018 | Grain Hedge Insights | Kevin McNew | Views: 463

Weekly Export Inspections were on the Low End of Estimates

Grains Were Up in the Overnight Session

Headlines

Lighthizer and Mnuchin are in talks with Chinese on trade. Export inspections within expectations. KC Wheat ratings improve.

 

HRW Wheat Weather

Today and Wednesday showers are expected in south eastern KS, OK and TX with precip ranging from .25” to 1.5”. Dry weather is expected to follow through the end of the week.  The 11-15 day forecast is wetter in the southern areas and is expected to bring moisture to southeastern KS, central OK and central Texas. Western KS, western OK, southeastern CO and the panhandle of Texas are all expected to stay dry. Hard red winter wheat ratings showed improvement after rains last week, but are still the worst on record for this time of the year. KS wheat rated poor/very poor declined to 49% from 55%. Wheat rated good to excellent increased to 13% from 11%. OK wheat rated poor/very poor declined to 54% from 66%. Wheat rated good to excellent increased to 9% from 5% LW. TX wheat rated poor/very poor increased to 63% from 60%. Wheat rated good to excellent increased to 12% from 10%.  

 

Argentina

The 1-5 day weather outlook remains dry for the remainder of the week with a few showers in northern Santa Fe into the weekend and missing the majority of the crop production region and driest areas.  The recent weather model increased moisture in Cordoba, western Buenos Aires and la Pampa in the 6-10 day outlook. Crop analyst from Rosario grains exchange Sofia Corina said on Monday “No matter how much it rains now, it won’t help. Yields are fixed”.

Brazil

Showers throughout Brazil continue to benefit second crop corn.

 

U.S. in Negotiations with China

White House trade adviser Peter Navarro confirms that U.S. trade representative Robert Lighthizer and treasury secretary Steven Mnuchin are in talks with the Chinese in hope of avoiding a trade war. In an interview on Fox news Sunday, Mnuchin said he is seeking an agreement “for them to open up their markets, reduce their tariffs, stop forced technology transfer. These are all the things we want to do.”  U.S. stocks traded higher following the news of trade talks.

 

Weekly Export Inspections

Export inspections were on the low end of estimates for both wheat and corn. Soybean inspections were strong this week.

 

 

Actual

Estimated

Wheat

278

250-500

Corn

1,153

1,250-1,500

Soybeans

584

450-650


 

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

March 26, 2018 | Grain Hedge Insights | Kevin McNew | Views: 409

Active Rains in the Midwest This Week

More Showers at Middle of Next Week Raise Wetness Threat for Wheat

Headlines

The grains are higher in the overnight. Heavy rains over the weekend missed the main growing regions in Arg. Chinese Ethanol imports were up noticeably in February.

Market focused on Prospective Plantings report on March 29th. Exporters sell 132,000 metric tons of Soybeans for delivery to unknown destinations during the 2017/2018 marketing year. Exporters sell 120,000 metric tons of Soybean Meal for delivery to Spain during the 2017/2018 marketing year.

 

Argentina Weekend Update

Although rains fell in Argentina over the weekend, significant rains missed the most important grain producing regions. Santiago Del Estero, Córdoba, southern Santa Fe and La Pampa all remained mostly dry over the weekend and continue to have very dry topsoil. Heavy rains fell over the weekend in northeastern Santa Fe, Corrientes and Rio Grande Do Sul with rain totals between 2” to 5” inches. Some rains also fell in Buenos Aires with central and northeastern Buenos Aires reporting only 1.1 inch. Rains are expected toward the end of this week in the northeastern part of the country, but meaningful precipitation is expected to miss the main growing regions again. Majority of crops entering late grain fill and full maturation stages.

 

Last Friday’s Trade Action was Supportive

Trade action on Friday seemed bullish after selling pressure in the first half of the day, which was triggered by trade tensions between the U.S. and China, was erased by the close of the session. On Friday, May corn traded a low of $3.69 ¼ but closed the day at $3.77. May soybeans traded as low as $10.09 ¼ but closed at $10.27 ¾. The days trading range was large and the fact that early and hard selling pressure could be turned around by the end of the day is a strong vote of confidence in the fundamentals of this market.

Commitments of Traders- (Week Ending March 20th)

The latest commitments of traders marks the end of an eight week long trend of buying corn and soybeans. This should not come as too much of a surprise as the chart clearly showed technical selling during that time window. Money Managers (MM) cut their net long position in corn to 213,231 from 233,063 LW.  MM cut their net long position in soybeans to 195,522 from 208,200 LW. MM increased their net short position in CBOT wheat to -56,207 from -35,684 LW. MM increased their net long position in KCBT wheat to 29,586 from 28,947 LW. MM decreased their MGEX wheat position to net short 653 from a long position of 1,239 LW.

 

China Ethanol Imports Surge

China purchased the most ethanol since May 2016. Chinese demand for U.S. ethanol slowed last year following a tariff increase.  China bought 197,652 cubic metres of ethanol in Feb. sourced almost entirely from the U.S. which was up 64% from January. The recent demand for U.S. ethanol is a sign that China will need to rely on trade to achieve the government mandate to mix biofuel into the nations fuel supply by 2020.

 

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

March 23, 2018 | Grain Hedge Insights | Kevin McNew | Views: 698

As Trade Tensions Mount, China Soybean Buyers Devise Contingency Plans

Grains down in the overnight session

Headlines

Grains lower in the overnight. Trump signs $60 Billion tariff memorandum.

China threatens 25 percent duty on pork products. Congress passes omnibus spending bill. Export sales on the lower side of expectations.

 

U.S. Import Tariffs

On Thursday, Trump signed a Memorandum that could impose tariffs on $60 billion of imports from China. There will be a 30 day consultation period once the list of Chinese goods are published.  US Grains council expresses concern that the tariffs will trigger a “painful retaliation against U.S. agriculture.” On Friday China declared plans to levy additional duties on U.S. imports valued at around $3 billion including a 25 percent duty on pork products. Soybeans were not included in the list of U.S. products.  

 

Omnibus Spending Bill

Congress passes $1.3 trillion omnibus spending bill. Omnibus spending bill included changes to Section 199A of the President's Tax Cuts and Jobs Act which was better known as the “Grain Glitch”. Omnibus spending bill reduced the deduction by the lesser of either 9% of farmers income from sales to a coop or 50% of wages attributed to those sales.

 

Argentina

Showers over the weekend concentrated in northeastern and southern regions.

Dryness is expected to continue in central and western crop region. The 6-10 day forecast turns dry again. Buenos Aires exchange cut its forecast for 2017/18 soybean production to 39.5 MMT from 42 MMT. (USDA @ 47 MMT). The exchange cut its corn production forecast for 2017/18 to 32 MMT from 34 MMT previously. (USDA @ 36 MMT)

 

Brazil

Rains in the west central and northwestern crop regions in the 1-5 day outlook helping the second corn crop. The 6-10 day forecast continues to bring beneficial showers, but will slow soybean harvest in the far south. Brazil soybean harvest is 58% complete, ahead of the five year average of 55%. Second corn crop planting has reached 92% complete ahead of five year average of 90%.

 

Export Sales

Wheat sales were down 63 percent from LW Corn sales were on the low side of expectations and down 41 percent from LW. New optional origin sales were reported for South Korea totaling 278,000 MT. Soybean sales were also on the low side of expectations, down 40 percent from LW.  

 

 

Actual

    Estimated

Wheat

265

    100-300

Corn

1,470

    1,400-2,100

Soybeans

759

    700-1,400


 

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

March 21, 2018 | Coach’s Corner | Greg Martinelli | Views: 1539

Sell More by Telling Better Stories

Stop the data dumping approach and try the Hero’s Journey Method to make more sales

Sell More by Telling Better Stories

We all love to sell based on data, facts, ROI, results, etc.  We rationalize that our customer wants to know the facts.  They want us to get down to business and explain our products and how valuable they are.  Unless they are 4 years old, none of them will tell you to, “Tell me a story.”  But, here’s the thing.  They really do want to hear a good story.  In addition, they will remember the story long after your data laden handout material is tossed in a filing cabinet.

Think of it this way.  Every sales person calling on your customer has data, proof of performance information, ROI charts, and the list goes on.  I’m not saying you don’t need data.  You do.  The problem is your customer will soon forget the charts and the numbers.  They merge into all the other information he received from all the other vendors in your category.

What to do?  How do I differentiate?  How do I stand out in the sea of data?  Tell a good story! But, it needs to structured.  Effective selling stories aren’t just amusing anecdotes or just fun to know stories.  They have structure and exemplify your point.  Learning to weave a good story into your selling process will set you apart from your competition.  Why? Because our brains are wired to remember in pictures, not numbers.  Think back to the last purchase you made which you feel really good about.  I’ll bet you remember the event in the format of a scene or setting and not in a table or chart with numbers. 

One method of good story telling is to use the Hero’s Journey.  Hollywood has been using it forever and we love it.  Just about every good movie will follow this format of storytelling.  The Hero’s Journey has several key components or steps.

The Hero’s Journey

1. Peace

In our opening scene, our hero is living a great life and all is peaceful.  In a sales situation, we tell a story of one of our past customers.  You explain how they too thought everything was fine.  They didn’t want to use your product or make a change either.  Then….

2. Call to adventure (change)

Something happened that changed their world.  In Hollywood movies, this is the earthquake, flood, attack from the bad guys or a death of someone close to our hero.  It thrusts our hero into action.  In Ag sales, this is out of control weeds, sudden death loss of animals, poor production during tough times (like now), etc.  Now our hero is forced to change. But….

3. Refusal and Failure

The hero still refuses to change.  This causes the bad to get worse.  In Hollywood, this is the part of the story where the bad guys get even stronger and do more bad things.  It appears there is no stopping them.  In our ag selling story, this might be the part where our hero faces financial ruin or the weeds kill the whole crop or they have to depopulate the entire swine barn, etc.  Failure is imminent.

4. The Turning Point

Our hero finally decides to fight back and change.  They try a few things and maybe fail.  Maybe this is where they tried a competitor’s product, but it didn’t get them the promised results.  Then they tried your products and saw the value.  They saw how it solved their weed problem, their animal death loss situation.

5. Success

With this new-found power, our hero journeys into the belly of the beast and defeats the bad guys.  In our ag sales story, this is the part where your past customer applied your products to the entire farm and had great success with it.  If you have to, this is the part where you can show a few numbers.  But try to stay in the story mode and not jump into the data. 

6. The Return

After defeating the bad guys, our hero returns home and all is right in the world.  Peace and tranquility are restored.  In our ag sales story, this is the part where you explain how you have a long running relationship with the customer in the story.  You became a trusted advisor and even best friends.  You golf together on weekends and ……

This format of storytelling has worked for Hollywood for over 100 years and it will work for you.  Think of all the great movies, and you will see the hero’s journey.  So, stop the data dumping approach to your selling process and try the Hero’s Journey Method of storytelling.  If they want the data, they will ask for it. 

You think your customer just wants to make a profit because that is what they tell you.  But in reality, they want to be seen as the hero in their company.  The Luke Skywalker that defeats Darth Vader.  The Superman who overcomes adoption on an alien planet.  The Forest Gump that has a meaningful life. Or Tom Hanks in almost any movie.  And the list goes on.  Show your customer how they too can be the hero with your product.

March 21, 2018 | Grain Hedge Insights | Kevin McNew | Views: 296

Precipitation Expected in Argentina over the Weekend

Grains Mixed in the Overnight Session

Headlines

CME group increased May soybean margins from $1,400 to $1,550. CME group increased May wheat margins from $1,150 to $1,250. Corn holds steady in overnight around support levels. Exporters sell 138,000 metric tons of Corn for delivery to South Korea during the 2017/2018 marketing year.

 

Corn Pullback

Rains in Argentina triggered additional selling pressure on Monday. Prices found support on Tuesday at 50 percent retracement level from mid-January lows to mid-March highs. The 50 day moving average is also bolstering support for Dec ‘18 corn at $3.955. Strong export demand should help support corn prices going forward.  

 

White House Could Announce Chinese Tariffs on Thursday

The White House is planning on releasing its measures which are targeted at China on Thursday. The proposed plan would not go into effect immediately and there would most likely be a period of time for U.S. industry to comment on the plan.

 

RFS Update

Sonny Perdue and Scott Pruitt presented the White House with a list of options but it was unclear whether Trump would implement changes on RFS at an executive level.  

Sonny Perdue said “The White House is trying to determine whether they need to make a call on a decision, or allow Congress to do it,”. RIN prices have traded higher after indications that the White House is backing off its plans to change RFS at an executive level.

 

KC Wheat Weather

Latest weather models show increased chances for precipitation in West Texas and the southern HRW wheat region for the second half of next week.

Argentina

Precipitation still in the forecast for this weekend and is expected to favor the central and northern production regions. Dry conditions through the middle of next week are expected to follow weekend rains.

 

Brazil

Showers in west-central Brazil. Conditions remain very positive for corn and soybean development.

 

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

March 20, 2018 | Grain Hedge Insights | Kevin McNew | Views: 471

Midwest Rain and Snow Next 10 Days will Benefit Wheat

Grains Steady in the Overnight

Headlines

Strong corn export inspections.

Grains hold steady in overnight

EXPORTERS SELL 110,000 METRIC TONS OF CORN FOR DELIVERY TO PERU DURING THE 2017/2018 MARKETING YEAR

 

Ag Exports at Risk

U.S Secretary of Ag Sonny Perdue said on Monday that Ag exports could be at risk in retaliation over the latest tariffs.

Steel and aluminum tariffs go into effect this week.

In response to U.S metal tariffs the EU has prepared a 10 page list of U.S. products valued at roughly $3.45 billion dollars that may be subject to tariffs.

Trump administration is preparing tariffs against Chinese information technology, telecommunications and consumer products.    

 

Argentina

Dry weather continues to stress corn and soybean crop this week.

The latest weather model still suggests another rain event this weekend.

Rain event should favor northern production regions of Argentina.

Confidence remains low that the event will produce meaningful precipitation across the most drought stricken growing areas.

 

Brazil

Showers in west-central Brazil. Conditions remain very positive for corn and soybean development.

 

Winter Wheat Conditions

State winter wheat conditions released on Monday did not factor in the rains over the weekend in Kansas.

Precipitation over the last 18 hours brought .12” to .16” inches to much of central Kansas with the heaviest accumulation in eastern Kansas (.42” to 1.28”).

Forecast expects dry weather across plains for remainder of the week, but rains to benefit south eastern third of the wheat belt next week.

KS winter wheat conditions rated good to excellent was 11 percent. The report showed an increase in poor to very poor to 55 percent from 53 percent last week.

Oklahoma wheat rated good to excellent lowered to 5 percent from 7 percent last week. Oklahoma’s poor to very poor wheat rating declined to 66 percent from 72 percent LW.

Texas winter wheat conditions report lowered good to excellent ratings to 10 percent from 13 percent LW. The report also increased wheat rated poor to very poor to 60 percent from 53 percent last week.  

 

Weekly Export Inspections

 

Actual

Estimated

Wheat

443

275-450

Corn

1,409

1,200-1,500

Soybeans

490

700-1,050

 

Export inspections were strong for wheat and corn but missed expectations for soybeans.

With the pace of export sales it will become increasingly important for corn inspections to maintain a strong volume each week to meet the rapid pace of bookings.

 

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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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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