January 04, 2018 | Grain Hedge Insights | Kevin McNew | Views: 422

Wheat Holds On To Most of 2-Day Gains Amid Weather Risks

Grains Lower in the Overnight Session

In the overnight session the grains were lower with March corn down ¾ of a cent, March Soybeans down 2 ¼ cents and March Hard Winter wheat down 2 ¾ cents. March Chicago wheat is finding resistance at its 50 day moving average at $4.34 per bushel.

 

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The weather models show that Argentina my see precipitation starting in the south and moving north later today and into Saturday. The precipitation will not be widespread, but will provide pockets of relief to the dry conditions developing in the southern part of the country.

 

The rally in wheat has lifted prices to a six week high, but the damage on the crop from the sub-zero temperatures will be hard to measure at this stage. Damage will be more clear in the spring when winter wheat crops emerge from dormancy, and it may be difficult for a sustained rally in the commodity unless weather conditions continue to threaten winter wheat crop conditions. Temperatures are colder than normal on the eastern half of the US and are expected to stay that way until Sunday for the states west of MN, IA and MO. By Monday IL, IN and OH temperatures will retreat from their seasonally colder than normal temperatures.  

 

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January 03, 2018 | Grain Hedge Insights | Kevin McNew | Views: 459

Soybeans Up for Third Straight Session

Grains Trade Higher in the Overnight Session

In the overnight session the grains traded higher with March corn up 1 cent, March soybeans up 4 ¾ cents and March Hard Winter Wheat up 3 ¾ cents on talks of dryness in Buenos Aires and fiercely cold temperatures combined with minimal snow cover threatening Winter Wheat conditions in the plains.

 

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Buenos Aires received very little moisture over the weekend and is expected to remain dry throughout this week. Temperatures in the region could climb to 100 degrees Fahrenheit throughout the week which will continue to dry the topsoil and evaporate any minor precipitation expected this week. According to the latest Weekly Agricultural Report released by the Buenos Aires Grain Exchange, soybeans are 81.9 percent planted and corn is 70.2 percent planted.   

Weekly corn export inspections were 683,898 metric tons which were in line with trade expectations. Soybean also met analyst expectations with 1.139 million metric tons inspected for export. Wheat inspections missed analyst estimates with only 274,506 metric tons inspected compared to 300,000 to 600,000 metric tons expected this week.  

 

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January 02, 2018 | Grain Hedge Insights | Kevin McNew | Views: 647

Corn, Wheat and Soybeans Up This Morning

USDA to Release Fats and Oils Today

In the overnight session the grains are trading mixed with March corn down 1 cent, March soybeans down 5 ¾ cents and March Chicago wheat down ½ cent. Wheat prices have held their gains since December 13th as cold weather threatened the dormant winter wheat crop with below zero temperatures over the New Year’s holiday.

 

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Precipitation over the new year has brought moisture to the north-western and west central parts of Argentina with rain totals measuring from 1 to 2 inches in Cordoba and .8 to 3.66 inches in Santiago Del Estero. On the other side of the country, Buenos Aires has received very little moisture over the last few weeks and recent hot temperatures have depleted soil moisture in the region. Although the recent rains helped the northern part of Argentina, the southern part of the country is now at risk of dryness impacting crop production. Precipitation throughout Buenos Aires will need to be monitored closely in the coming weeks.

 

The USDA is scheduled to release their Fats and Oils: Oilseed Crushings, Production, Consumption and Stocks report today at 2 PM CST. Analysts are expecting for the report to show  that 174.1 million bushels of soybeans were processed in November, down slightly from 175.9 million bushels processed in October. Analysts are expecting soy oil stocks to be around 1.737 billion pounds, up from 1.626 billion pounds in October.    


 

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December 29, 2017 | Grain Hedge Insights | Kevin McNew | Views: 830

Export Sales on the High Side of Expectations

Grains were Mixed in the Overnight Session

In the overnight session the grains were mixed with March corn down 1 ½ cents, March soybeans up 1 ½ cents and March wheat down 1 ¼ cents. Soybeans wiped away all the gains in the previous session and pushed through the December 22nd low.

 

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Ethanol production increased from last week to the second highest level on record, moving from from 1.077 Million barrels per day to 1.090 million barrels per day. Ethanol production continues to run at a breakneck pace and ahead of the USDA’s corn used for ethanol estimates. Ethanol stocks declined a bit last week to 22.031 million barrels from 22.320 million barrels the week before. Despite the weekly decline, ethanol stocks are still ahead of last years levels on a same week basis.    

 

Following the blast that killed one and left others injured, grain inspectors and crushers called a 48 hour strike throughout Argentina on Thursday. The strike was widespread and organized by the URGARA labor union and included facilities on the Timbues, San Lorenzo and General San Martin.

  

Export sales were on the high side of expectations this week for both corn and wheat. Wheat sales were down from last week but in line with the four week average. Corn sales declined 20 percent from the previous week, but beat analyst expectations. Soybean sales were also down 44 percent from the previous week and had sales on the low range of analyst expectations.  

 

Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

478

250-550

Corn - OC

1,245

600-1,100

Soybeans - OC

974

800-1,500

 

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December 28, 2017 | Grain Hedge Insights | Kevin McNew | Views: 514

Grains Trade Lower in the Overnight Session

The US Dollar Weakened, Providing Support for the Grains

In the overnight session the grains traded lower with March corn down 1 cent, January Soybeans down 2 ½ cents and March Chicago wheat down 1 ¼ cents. The U.S Dollar weakened, providing some support for the grains.

 

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Wheat was able to make up most of the ground lost over the last couple trading sessions on fears of colder than normal weather threatening dormant wheat throughout Oklahoma and the Texas Panhandle. The lack of snow cover in those regions has the Winter Wheat crop somewhat vulnerable. The cold weather has provided a few basis opportunities as end users narrow their basis to entice farmers to deliver grain during a colder than normal holiday season.

Egypt purchased 180,000 metric tons of wheat in a tender on Wednesday where no U.S. wheat was offered. Offers only consisted of Russian wheat that was accepted for roughly $192.35 to 194.90 per metric ton FOB.

 

Yesterday an explosion at a COFCO grain terminal in Argentina killed one employee and left others injured. The cause of the explosion is not known, but the facility involved was shut down. The terminal is in Santa Fe Province on the Parana River.   


 

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December 27, 2017 | Grain Hedge Insights | Kevin McNew | Views: 558

Soybeans Rise on Dry Weather in Argentina

Short-Covering Rally in Soybeans Yesterday

In the overnight session the grains were mixed with March corn down ¾ of a cent, January soybeans up 3 ½ cents and March wheat down ¼ penny. Wheat has closed lower over the last two trade sessions, but price declines have been limited due to the frigid temperatures expected throughout the plains in the coming week. The weather throughout the Hard Red Winter Wheat region is supposed to turn cold into January 2nd which could damage dormant winter crop unprotected by a sufficient blanket of snow such as the Northern Texas Panhandle and parts of Oklahoma.

 

Exporters Sell 110,000 metric tons of Soybeans for delivery to China during the 2017/2018 marketing year. -USDA


 

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Precipitation throughout Argentina is expected over the weekend starting in the south and moving to the north. Traders have remained concerned about the crop due to the hot temperatures this week and the because this weeks precipitation has been mostly isolated. It will be important for rain to materialize this weekend because on Monday weather is expected to turn dry again with the next chance at rain being on the 5th and 6th of January. If the forecast precipitation is not received this weekend in Argentina there is fear that some farmers may experience even further planting delays. In the most recent report from the Buenos Aires Grain Exchange, Argentina is 70.9 percent planted for soybeans and 61.2 percent planted for corn.

The short covering rally in soybeans yesterday will likely run into resistance at the $9.63 ¼ price level and again at $9.70. Both price levels were previous areas of support that have been violated and could add additional selling pressure.

 

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December 26, 2017 | Grain Hedge Insights | Kevin McNew | Views: 468

Cattle on Feed Report Released on Friday was Bearish

Wheat is Currently Trading Near a November 28th Price Low

Wheat is currently trading near a November 28th price low which should continue to provide overhead resistance. Corn has advanced nearly 6 cents from the low it printed on December 19th on strong export sales and short covering.

 

The commitment of traders report released on December 22nd showed that Managed Money has moved to a net short position for soybeans, a position we haven’t seen since September 19th. Soybeans went from a previous net long position of 19,755 to a net short position of -40,771 in the Managed Money category. Corn also moved further into a net short position this week in the managed money category, widening to -222,153 last week.  

 

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Winter wheat prices out of the Black Sea region were stable going into the holiday season. FOB prices for 12.5 percent protein for January delivery are priced right around $191 per metric ton. Exports have been huge this year with Russia exporting an estimated 25.5 million metric tons since the beginning of the marketing season, representing a 34 percent increase over last year.

The Cattle on Feed report released on Friday was seen as bearish with all categories reported at or above analyst expectations. All cattle on feed as of December 1st was reported at 108 percent of last year above expectations of 106.7 percent. Placements into feedlots during November were huge, totaling to 2.10 million head which was 114 percent from 2016. Analyst were only expecting around a 5.7 percent increase in placements. Cattle marketed in November met expectations at 3 percent over last year.  


 

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December 22, 2017 | Grain Hedge Insights | Kevin McNew | Views: 691

Export Sales for SRW Wheat Recorded 191,527 This Week

Grains Traded Mixed in the Overnight Session

In the overnight session the grains traded mixed with March corn unchanged, January soybeans up 2 ¾ cents and March Chicago wheat unchanged. Kansas City wheat is up ½ a cent, but is currently trading at a price level where overhead resistance is likely.   

 

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Export sales for SRW wheat recorded 191,527 metric tons this week which was the largest weekly sale of that variety since July 2014. Foreign buyers are looking to US SRW wheat to use as feed as prices have fallen to $175 per metric ton FOB which is currently more competitive than Russian wheat with the same protein level. Chicago wheat prices have been sliding lower all fall printing a most recent low at $4.10 ½  cents per bushel on December 11th. The recent prices have enticed some buyers and animal feeders to lock in attractive protein levels.  

  

 

The latest weather models shows that conditions in Brazil will be favorable for the corn and soybean crop over the next two weeks. However, areas such as Bahia, northeast Minas Gerais and Rio Grande do Sul are all drier than the rest of Brazil. Forecasts for precipitation next week should resolve some of that dryness next weekend. Argentina is forecast to have precipitation over the weekend with another precipitation event in the forecast for next Friday through Sunday.


 

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December 21, 2017 | Grain Hedge Insights | Kevin McNew | Views: 568

Strong Export Sales Reported This Morning

Grains Traded Lower in the Overnight Session

In the overnight session the grains are trading lower with March corn down ¾ of a cent, January soybeans down 2 ¼ cents and March Chicago wheat down 1 cent. Kansas wheat is down 1 ½ cents this morning after six days of drifting higher due to a forecast for a cold snap in the HRW growing region at the end of December. The slight rebound we have seen over the last week will likely run into overhead resistance at the November 28th low of $4.22.

 

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Yesterday it was announced by the USDA that China is reducing the amount of foreign material allowed in shipments of U.S soybeans starting the first of the year. Shipments that contain less than 1 percent FM will be processed quickly while cargo’s of soybeans that test greater than 1 percent FM will be investigated further. The standard quality specification for No. 2 yellow soybeans allows for up to 2 percent FM which will add further frustration to grain exporters and may even curb imports. Ensuring that soybeans contain less than 1 percent FM will add cost to our exports which may reduce how competitive we are with South America.

 

The EIA announced ethanol production dipped last week to 1.077 million barrels per day from 1.089 million bpd. Despite the decline this is well over last years production during the same time period. Weekly stocks also declined slightly to 937 million gallons from 940 last week. Weekly stocks continue to be sharply higher than last year during Mid-December.

 

Strong export sales numbers released this morning for the period between December 8th and 14th. Wheat sales were reported at 796,300 metric tons which was a marketing year high for the grain. Net corn sales were reported at 1,558,300 metric tons which was up 80 percent from the previous week. Soybeans sales also increased compared to last week, booking 1,742,900 metric tons of sales.

 

Weekly Export Sales-

  

    Actual

  Estimated

Wheat - NC   

    796

  300-600

Corn - OC

    1,558

  800-1,100

Soybeans - OC

    1,742

  1,300-1,800

 

 

 

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December 20, 2017 | Grain Hedge Insights | Kevin McNew | Views: 424

Strong Soybean Exports out of Brazil

Grains Were Mixed in the Overnight Session

In the overnight session the grains were mixed with March corn up ¾ of a cent, January soybeans up 2 ½ cents and March Chicago wheat down 1 ¼ cents. Since December 5th, soybean prices have been on a steady decline, breaking through support and pushing to lows we haven’t seen since September. Look for any rebound to be met with resistance around the $9.66 ½ price level.   

 

South America continues to get the necessary precipitation to alleviate crop production concerns. Northern Argentina should receive good precipitation on Friday and into the weekend, while the central and southern production areas should receive precipitation from Wednesday through Friday. More precipitation is expected in Argentina next week.   

 

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The latest weather models call for colder temperatures in the Hard Red Winter wheat region between December 25th and 26th. Snow expected throughout Colorado and Nebraska will help protect some of the crop from the most extreme temperatures, but the cold snap will leave some areas vulnerable especially if the snow doesn’t materialize.

Soybean exports out of Brazil have been strong during a season when they typically slow down and exports shift the the U.S shores. Brazil’s mid-month port lineups show 1 million metric tons more soybeans on the docket than in 2015. Exports are running more smoothly this year as improvements at major ports and exporters have used Northern Brazil ports more. Corn exports in Brazil are lagging significantly with just under half the corn lined up in December compared to the 2015 marketing year. The lower corn sales are a result of record exports from July through September combined with Brazilian farmers unwilling to sell their corn at these prices.    

 

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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