August 23, 2017 | Grain Hedge Insights | Kevin McNew | Views: 317

Day Two Crop Tour Results Are In

Grains Trade Slightly Higher in the Overnight

In the overnight session the grains are trading slightly higher on Pro Farmer Day two results and an announcement of countervailing duties on Argentine and Indonesian bio-diesel. This morning December corn is up a 2 ¼ cents, November soybeans have gained 8 ½ cents and December Chicago Wheat is up 3 cents.

 

The Department of Commerce announced yesterday that it would impose larger than expected countervailing duties on Argentine and Indonesian bio-diesel imports after they ruled they were both subsidized. The Bio-diesel import duties will be 50-64 percent for Argentina and 41-68 percent for Indonesia.

 

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Day two of the crop tour covered Nebraska and Indiana both of which showed slightly weaker soybean counts from last year. In their evening report, Pro Farmer announced their Nebraska corn yield estimate was 165.42 bpa, which was up 6.82 bpa from last year and above the three year average of 158.60 bpa. Nebraska soybeans had an estimated pod count of 1,131.02, which was down 92.05 pods from last year and below the three year average of 1,182.12. Indiana corn yield estimates were forecast at 171.23 bpa down 2.19 bushels from last year but above the three year average of 167.13 bpa. Indiana soybean pod count was 1,168.78 which was down roughly 10 pods from last year but above the three year moving average of 1164.09.

The forecast shows there is the chance of precipitation by the middle of next week to help relieve the driest soybean areas throughout the Midwest. Rains are expected again in the 11-15 day forecast which will be beneficial for the crops. The latest weather models show no early frost threats over the next two weeks.  

 

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August 22, 2017 | Grain Hedge Insights | Kevin McNew | Views: 489

Crop Tour Scouts Release First Day Results

Grains were Mixed in the Overnight Session

In the overnight session the grains were mixed with December corn down ¼ penny, November soybeans up 1 ¼ cents and December Wheat down ½ cent. Traders will be watching reports from the crop tour, where any suggestion that yields are not in line with the latest WASDE forecast will most likely cause market jitters.

 

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Recent rains are helping to limit the driest spots to only 15 percent off the Midwest corn and soybean area. The 6-10 day weather models continue to show cooler than normal temperatures throughout the majority of the Central and Eastern U.S which should help corn filling. At this point the frost risk over the next two weeks remains very low.  

 

Crop conditions were reported yesterday and were in line with analyst expectations. U.S soybeans rated good-to-excellent increased a percentage point to 60. Corn conditions held steady this week at 62 percent good-to-excellent and spring wheat condition improved by a percentage point to 34.  

 

After the first day of the crop tour scouts announced that corn yield potential in south eastern South Dakota was below average and soybean pod counts were low as well. This shouldn’t come as a shock to the market considering the dry hot weather that area has seen throughout the growing season.  The tour pegged South Dakota corn yield at 147.97 bushels per acre, down from 149.78 bushels a year ago and down 8.17 bpa from the three year moving average. Soybean pod counts were at 899.56 in a 3 by 3 foot square which is down from the three year average of 1,027.80. On the eastern leg of the tour, Pro Farmer pegged Ohio yield estimate was 164.62 bpa up from 148.96 bpa last year. The tour estimated the number of soybean pods counted in the 3 by 3 foot square was 1,107.01 pods, slightly below the three year average of 1,174.24 pods.  

The Iranian animal feed importer SLAL issued tenders to purchase 200,000 metric tons of feed Barley and 200,000 metric tons of corn this morning. Japan also issued a regular tender to purchase 133,791 metric tons of feed-quality wheat from the U.S or Canada.


 

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August 21, 2017 | Grain Hedge Insights | Kevin McNew | Views: 338

USDA Flash Soybean Sales this Morning

Grains trade lower in the Overnight Session

In the overnight session the grains traded lower with December corn down 2 ¾ cents, November soybeans down 5 ½ cents and December Chicago wheat down ½ cent as weekend precipitation and additional moisture in the forecast puts pressure on the market.

 

EXPORTERS SELL 463,000 METRIC TONS OF SOYBEANS FOR DELIVERY TO UNKNOWN DESTINATIONS DURING THE 2017/2018 MARKETING YEAR. EXPORTERS SELL 198,000 METRIC TONS OF SOYBEANS FOR DELIVERY TO CHINA DURING THE 2017/2018 MARKETING YEAR- USDA

 

Weekend rains fell in Southwest Minnesota, Central and Southeast Nebraska, Southern Iowa and Northern Missouri. The latest weather forecast shows temperatures will begin to cool down throughout the Midwest by Tuesday and are likely to stay cool for the remainder of the month.

 

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The Pro Farmer crop tour will kick off today and will scout around 2,000 fields between the 21st-24th. The tour is split into two different legs starting on opposite sides of the country. The first leg will start in Western Ohio and travels through Indiana, Illinois, eastern Iowa and into Minnesota while the second leg starts in South Dakota and goes across Nebraska, Western Iowa and into Southern Minnesota. The summary of the Tour’s yield estimates is presented in Minnesota on the 24th.

This morning the Saudi Arabian main state wheat buying agency announced that it had purchased 490,000 metric tons in a wheat tender that averaged $218.19 per metric ton. The wheat was sourced from the European Union, North and South America and Australia. This morning the South Korean corn processing industry association purchased about 55,000 metric tons of corn in a tender that closed Friday.     

 

According to the Commitment of Traders report for the week ending August 15th, managed money cut their net long position for corn and soybeans in the latest report. Corn positions held by managed money fell by 27,271 this week to 39,802 while soybeans fell 27,312 to a net short position of -14,399. The net short position in Chicago Wheat increased this week to -34,236.

 

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August 18, 2017 | Grain Hedge Insights | Kevin McNew | Views: 306

Weekly Cash Comments

Weekly Cash Commentary for week ending 08/18/2017

Grain basis moved higher this week and sliding grain futures continued to pressure farmer movement. On the week, corn basis was up 2 cents a bushel while spot soy basis managed a 3-cent advance.

 

Corn basis was buoyed mostly by ethanol plants which saw a 3-cent gain on the week. Much of the Western Cornbelt saw solid basis improvements on the week as farmers there face lower yield potential and hold back on any old-crop deals. Meanwhile at river terminals, basis was up about 2 cents, on par with the broader movement across the US. The Gulf was mostly steady on the week.

For soybeans, basis levels were much stronger at river terminals with a 5-cent advance on the week; driven partially by a 2-cent improvement at the Gulf. Soy crush plants were up 3 cents a bushel, although late-season maintenance routines for select plants will likely slow some of the appetite for soybeans in the near-term.

In terms of the competitive landscape, we saw Eastern IL/Western IN premium buyers bid up the market in their region.  Bunge and Cargill added a nickel to their basis to help expand their drawing region over the last week. Further to the south, Poet gained some ground in their drawing region with a modest 1-cent basis improvement.

 

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August 18, 2017 | Grain Hedge Insights | Kevin McNew | Views: 464

IL Corn and Soybean Yields May Be in Danger of Falling Short of Forecasts

USDA Announces Two Positive Trade Developments

In the overnight session the grains traded slightly higher with December corn up ¼ cent, November soybeans up ¾ of a cent and December Chicago wheat up 2 cents. December 2017 Corn is now trading at 3.64 ½ cents which is just six cents above the contract low of 3.58 ½. Any push lower should be met with technical support around that contract low that was set August 31st 2016.

 

Illinois corn and soybean yields may be in danger of falling short of forecasts, as significant contributions from the weather are still needed in the eastern half of the state. This year, the US Department of Agriculture does not expect Illinois to set new yield records. Last week, the agency pegged the state's corn and soybean yields at 188 and 58 bushels per acre, respectively.

 

This morning, China’s Agricultural Ministry  confirmed a bird flu outbreak at quail farms in Luodian. The outbreak infected 13,103 quails and culled 8,110 birds. This was the second major bird flu outbreak in China this year with the first occurring at the beginning of the month.  It was also reported this morning that the Philippines found a second outbreak of bird flu 50 miles away from the first reported case reported a week ago. Both cases of the bird flu were found in quails.

 

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On Thursday the USDA announced two positive trade developments. The first is that South Korea lifted a ban on U.S. poultry and eggs and the second was that the U.S and Argentina have agreed to a deal allowing the U.S to import pork into their country. This is the first time since 1992 that U.S. pork has been allowed to enter Argentina and should support the longer term fundamentals of the hog market.  

France reported that 79 percent of their corn crop was rated good-to-excellent which was unchanged week over week. They also showed that their soft wheat harvest is wrapped up with 99 percent harvested up 2 percent from this week before.

 

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August 15, 2017 | Grain Hedge Insights | Kevin McNew | Views: 393

Traders Digesting Yesterdays Crop Progress Report

Grains Trade Lower in the Overnight Session

In the overnight session the grains traded lower with December corn down 4 ¼ cents, November Soybeans down 5 ¼ cents and December Chicago wheat down 5 ½ cents after crop conditions came in better than expected in Monday afternoon’s report. Traders will be digesting yesterday afternoon’s crop conditions report and anticipating the NOPA crush report which will be released out at 11 AM CST today.   

 

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Expectations were for the good to excellent ratings to be steady this week for the Corn and Soybean crop. Corn ratings increased by two percentage points in the good to excellent category to 62 percent. States that saw improvement included South Dakota which was up 5 percent, North Dakota which was up 8 percent, Nebraska marked a 4 percent increase, Indiana was up 3 percent and Illinois was up 4 percent compared to last week. There was a 3 percent drop in Iowa and a 10 percent drop in Michigan good to excellent ratings in corn.   

 

The soybean crop ratings declined by 1 percent in the good to excellent category to 59. Among the states that saw a deterioration in their soybean conditions was Iowa which was down 3 percent, Michigan which was down 7 percent and Illinois which was down 1 percent.

 

Spring Wheat rated good to excellent improved by 1 percent to 33 in this week’s report. This improvement was in line with expectations as crop condition improvements were observed across Idaho, Minnesota, Montana and North Dakota. Despite the slight uptick in crop conditions the spring wheat crop is still well below the good to excellent rating of 66 during the same period last year.   

Spring wheat harvest has advanced to 40 percent complete up from 24 percent the week before. The four year average is 35 percent harvested during the same week last year.  

 

The NOPA crush report which will contain the data of 13 companies that account for approximately 95 percent of US soybean crush will be released out 11 AM CST this morning. In a Reuters poll of analysts the average guess is for the report to show 143.004 million bushels crushed.

 

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August 14, 2017 | Grain Hedge Insights | Kevin McNew | Views: 303

Grains Trade Lower in Sunday Overnight Session

Weekend Rains or Southern Half of N Dakota and Parts of Western Minnesota

In the Sunday overnight session the grains traded lower with December corn down 4 ¼ cents, November soybeans down 9 3/4 cents and December wheat down 7 cents. Weekend rains in the southern half of North Dakota, parts of western Minnesota and eastern Nebraska are pressuring the market along with a positive weather forecast that shows a couple more good chances for precipitation over the next two weeks.  

 

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This morning Saudi Arabia’s state grain buyer announced it had purchased 660,000 metric tons of animal feed barley it had recently tendered. The barley purchase was filled at an average price of $203.37.
 

On Friday, Russia’s agriculture consultancy IKAR increased its forecast for Russian wheat production to 77-80 million metric tons from 74-77 million metric tons in its previous forecast. The large crop anticipated in Russia has put pressure their wheat prices making this the second consecutive week that wheat export prices have fallen. Russia FOB export prices now sit at around $192 a metric ton. Russia continues their wheat harvest and is now only two percent behind last year's harvest pace.

 

On Friday, the latest commitment of traders report showed that managed money net long position in corn fell from 84,644 to 67,073. Wheat also lost ground with the biggest change coming from Chicago wheat which went from net long 12,190 to a net short position of -14,101. Kansas City wheat net long position shrunk from 54,187 to 48,935 and Spring wheat held mostly steady at 10,708 from 10,808 the previous week. The managed money net long position in Soybeans also dropped sharply this week from 39,795 to 12,913.


 

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August 11, 2017 | Grain Hedge Insights | Kevin McNew | Views: 281

Weekly Cash Comments

Weekly Cash Commentary for week ending 08/11/2017

Grain basis was mixed this week with corn showing little upward strength this week while soybeans posted a 2-cent advance.

 

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Cash markets were mostly stable with some corn markets continue to push higher basis levels over the last few weeks of futures selling pressure. Corn ethanol plants as a group were fractionally higher on the week but there was a number of plants raising bids 5 to 10 cents a bushel to draw out more grain from farmer hands. At river terminals, the basis increased on average at 1.4 cents a bushel.

 

The competitive landscape in the corn market saw markets in IL/IN push to new highs helping to increase their drawing area around neighboring competition. Along the MS River, Roquette Grain and Green Plains showed double-digit gains in spot corn basis while Poet in Indiana upped their bids by 4 cents on the week to significantly expand their drawing region.

 

For soybeans, basis levels showed more buoyancy in the face of steeper losses on the Board. Crush facilities were up 2 cents a bushel while the river terminals were up 3 cents on the week.

 

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

August 11, 2017 | Grain Hedge Insights | Kevin McNew | Views: 241

Grains Pause Their Sharp Mover Lower in the Overnight Session

Today's Market will Continue to Digest the WASDE Report

In the overnight session the grains seemed to pause their sharp move lower that was triggered after the USDA’s 17/18 corn, soybeans and wheat production estimates topped analyst forecasts in the latest WASDE report. We should also note, better than expected precipitation last night in western Illinois and the latest weather models show the 6-15 day forecast bringing precipitation and much needed relief in the western corn belt.

 

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Today, the market will continue to digest the surprise in yesterday’s reports.

The most bearish part of this report was the new crop production forecasts which showed corn yield forecast at 169.5 BPA and soybean yield at 49.4 BPA compared to an average analyst expectation of 166.2 and 47.5 BPA respectively. These numbers surprised the markets and caused sharp selling pressure immediately following the report's release.  

 

Ending stock forecasts for 17/18 corn were 270 million bushels higher than the average guess among analysts in the Reuters poll. The smaller than expected revision in corn yield and 25 million bushel decline in both exports and feed and residual caused ending stocks to soar to 2.273 billion bushels, well over analyst forecasts.

 

New crop soybean ending stocks were also higher than analysts were expecting despite lowering old crop carry-out and increasing exports by 75 million bushels. Ending stocks were still higher than the July WASDE by 15 million bushels, primarily due to the larger than expected yield revision from 48 BPA to 49.4 BPA.  

 

The WASDE report held the old crop corn balance sheet steady keeping ending stocks at 2.37 billion bushels surprising many analysts that expected to see a revision lower in corn used for ethanol. Old crop soybean ending stocks were revised lower than the average analyst expectations.The revision was a result of reducing crushings by 10 million bushels and increasing exports by 40 million bushels.

 

US wheat ending stocks also surprised traders after yield was revised lower by only .6 BPA leaving new crop stocks at 933 million bushels compared to the 907 million bushels expected.


 

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

August 10, 2017 | Grain Hedge Insights | Kevin McNew | Views: 319

USDA WASDE Report Out Today at 11 CST

Grains Were Up in the Overnight Session

In the overnight session December corn up ¼ cent,  November soybeans is up 4 ¾ cents and December wheat is up 1 ¼ cent. Traders have been positioning before the August WASDE report which is scheduled for release at 11 CST.

 

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Brazil’s agricultural statistics agency released its 16/17 corn and soybean forecast which showed a revision higher for both. Brazil’s 16/17 corn crop forecast increased 1.2 MMT to 97.2 while their soybean crop was revised only slightly, up .08 MMT to 114 in the same marketing year.

 

Ethanol production increased by 10 thousand BPD to 1.012 million BPD according to the EIA report on Wednesday. Despite the increase, weekly ethanol production was down nearly 1 percent compared to the same week last year. With July ethanol production numbers in the books, we will need to see roughly a 6 percent increase in ethanol production throughout the remainder of the marketing season to meet the USDA’s corn used for ethanol projection. Although this is possible, it is unlikely and may be reason enough to see the USDA revise their ethanol forecasts lower on the old crop balance sheet in today’s report.

 

Ethanol stocks increased to 21.347 million barrels from 20.852 million barrels last week. Although ethanol stocks have seen a drawdown since March when they peaked for the year, they remain at record highs when comparing on a same week basis.

 

Old crop export sales for both corn and soybeans missed expectations with soybeans actually recording a marketing year low, down 83 percent from the prior four week average. All new crop sales were strong however, with corn and soybeans both beating analyst expectations.  

 

Weekly Export Sales-

 

 

Actual

Estimated

Wheat

464

250-450

Corn - OC

52

100-300

Corn - NC

628

400-600

Soybeans - OC

45

100-300

Soybeans - NC

639

250-450


 

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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