March 03, 2017 | Grain Hedge Insights | Kevin McNew | Views: 178

US Dollar Index Erodes Overnight

Grains were mixed overnight heading into the morning break

Grains were mixed overnight heading into the morning break. In outside markets, the US Dollar index eroded overnight while crude oil tried to bounce higher after sharp losses on Tuesday.

 

In Brazil, at least 11 ships are facing delays loading beans at some northern ports as rained out roads have stalled truck deliveries from Mato Grasso. Road work has begun to help the stalled truckers as several thousand trucks have reportedly been stranded on unpaved, rain damaged roads.

Growing conditions in Argentina's main soy belt were helped over the previous seven days by showers in areas that had suffered from a lack of ground moisture, the Buenos Aires Grains exchange said on Thursday in its weekly crop report. Rain in the central and southern agricultural area improved moisture levels in southeast Buenos Aires, where conditions had been overly dry during the last month the report said.  The exchange kept its estimate for the recently planted 2016/17 soybean crop unchanged at 54.8 million tonnes.

Russia is considering exporting part of its 4 MMT state grain stockpile to free up storage space before the new crop arrives, industry sources said.  Russia's storage capacity is buckling after the country harvested a record grain crop of 121 MMT in 2016, with prospects for this year also looking favorable.

 

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

March 02, 2017 | Kevin McNew | Views: 184
March 02, 2017 | Grain Hedge Insights | Kevin McNew | Views: 218

US Dollar Continues to Climb

USDA's January Soy Crush Released Yesterday

Grains softened overnight after two days of heft advances. In outside markets, the US Dollar hit its highest mark since Jan 11 while crude oil put in a one-month low.

 

After the close yesterday, USDA’s January soy crush was 170.6 MB, slightly better than expected of 169.3 MB. Year-to-date crush for the marketing year is up 3.3% over last year which would imply the remainder of the year needs to hit 1.6% to reach USDA’s estimate. In light of SA competition and weak soymeal demand the USDA forecast seems appropriate.

 

The European Commission forecast that usable soft wheat production in the 28-country European Union would reach 143.0 MMT in 2017/18, up 6.5% from 134.3 MMT in 16/17. In its first projections for the next cereal crop season, the Commission forecast that EU soft wheat exports would rise to 28.9 MMT in 2017/18 from an expected 24.0 MMT in 2016/17. Weekly export sales this morning were mostly disappointing. Both old- and new-crop corn were below expectations. Wheat and soybeans were within expectations but new-crop were below expectations.

 

Weekly Export Sales-

                            Actual         Expected

Wheat - OC             353             300-500

Wheat - NC              99              100-300

Corn - OC               692              700-900

Corn - NC                20               150-350

Soybeans-OC         427               300-500

Soybeans-NC             0                  0-200

 

The US Dollar continues to climb as Fed Watchers put a higher probability on a Fed rate hike in March. The jobs report slated for tomorrow morning will be widely watched for indications on the economy’s health.

 

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

March 01, 2017 | Kevin McNew | Views: 136
March 01, 2017 | Grain Hedge Insights | Kevin McNew | Views: 228

US Dollar Hits a 7-Week High on Wednesday

India is likely to impose an import tax of 25% on wheat

Grains continued their rally into Wednesday finding more buying strength overnight.

 

Yesterday’s action was spurred by rumors of a White House executive order that would allow E15 gasoline to be sold more easily during summertime months as well as a potential biodiesel credit to be reinstated and limit methyl ester from Argentina. However, by mid-day the White House denied any such action was in play leaving the soy market up 15 but 20-below its high of the day and corn off 12 from its high.

 

Overnight, Japan has said they will tap into 330,000 MT of corn from emergency stockpiles after inventories fell to critically low levels due to a delay in shipments from the United States. Overnight Egypt has said they have enough locked-in wheat supplies to cover their needs for the next 4 months due to recent buying activity, including a 535,000 MT deal on Monday. India is likely to impose an import tax of 25% on wheat, reinstating the tariff after a gap of nearly three months following big purchases from overseas in recent months.

 

Brazil saw scattered showers overnight. Southern & Western Brazil could see more rains in mid-March which could be detrimental, but overall yield potential continues favorable. The US  HRW belt sees no change in its dry outlook for the first week of March.

The dollar hit a seven-week high on Wednesday on hopes the U.S. Federal Reserve would lift rates this month, after hawkish comments from two of its top officials overshadowed U.S. President Donald Trump's first major policy speech to Congress.

 

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

February 28, 2017 | Kevin McNew | Views: 150
February 28, 2017 | Grain Hedge Insights | Kevin McNew | Views: 226

Winter Wheat Ratings are out for Select States

US Dollar Continues to Weaken

Turnaround Tuesday was in check this morning with grains turning higher in early trade as beans lead the complex with an 8-cent advance. The US Dollar continued to weaken as did crude oil adding to yesterday’s losses.

 

Winter wheat ratings were out for select states after the close on Monday. HRW wheat states continue to see poor conditions especially in the Southern Plains relative to last year. The outlook for moisture in the next month is limited with temperatures expected to be above normal, helping push the crop out of dormancy.

 

Winter Wheat Crop Conditions (Good-to-Excellent Rating)

 

State

  % G-E Feb

  % G-E Jan

   % G-E Last Year

CO

  40

  36

   45

IL

  72

  74

   58

KS

  43

  44   

   59

MT

  51

  70

   53

NE

  44

  47

   59

ND

  81

  82

   55

OK

  43

  33

   68

SD

  57

  62

   69

TX

  34

  30

   40

 

 

Egypt was in the market overnight for wheat with the lowest offer submitted being French wheat at $197; the results should be out later today. Iraq was also in the market for wheat while a South Korea feed buyer was shopping for soymeal.

 

China’s crush rate has been ticking up as hog profitability has improved slightly. Imports of soybeans into China are expected to be a strong 7 MMT when published at the end of March. Brazilian FOB bean prices continue to hold firm at a $2.5/MT premium to US FOB prices vs last year when Brazil was at a $12/MT discount. Slow farmer selling in Brazil continues to keep bean supplies to the world market somewhat limited.


 

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

February 27, 2017 | Kevin McNew | Views: 216
February 27, 2017 | Grain Hedge Insights | Kevin McNew | Views: 190

POTUS Economic Agenda speech set for Tuesday

Grain Markets Show Little Direction to Start the Week

Grain markets continued to show little direction to start the week as soybeans were higher while wheat was lower. Corn spent most of the night session fractionally higher. In outside markets crude oil was higher.

 

On Friday, USDA’s cattle on feed numbers matched closely what analysts had been expecting. The February Cattle on Feed inventory was reported at 10 Million head, 101% of a year earlier while January placements were 111% of a year earlier.
 

Palm oil continued to sell-off overnight as did China’s soybeans. On Friday, January soybean imports into China were reported at 7.66 MMT That’s off from 9.0 last month but above the 5.6 imports of January 2016. Marketing year-to-date China's soy imports are up 5.5% over the same 5-month period last year while USDA has penciled in a 3.3% advance for the year.

 

South America weather was yet again favorable over the weekend. Weekend rains favored north 1/2 Brazil corn/soy. Center-West Brazil rains are expected this week to support safrinha corn. The 6-15 day rains cause minor fieldwork interruptions farther south. In Argentina, weekend showers favored S. & far W. The 6-10 day shows a break in rain which should allow wet spots in NW Buenos Aires to ease.

The dollar edged up from a 2-1/2-week low on Monday but traders await guidance from U.S. President Trump on his economic agenda. Trump is set make his first major policy address to the U.S. Congress on Tuesday, and is expected to give some details on his planned infrastructure spending and tax reform.  Traders will look for action plans vs vague ideas in the speech after 3 months of banking on Trump’s economic stimulus trade.

 

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

February 24, 2017 | Kevin McNew | Views: 140

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