November 13, 2017 | Grain Hedge Insights | Kevin McNew | Views: 801

Cash Market Creeps Higher

Soybeans Posting Stronger Gains than Corn

In the overnight session the grains traded lower with December corn down 1 cent, January Soybeans down 3 ½ cents and December wheat down 5 ¼ cents. The six to ten day forecast is expecting cooler than normal temperatures in the central and eastern grain belt as well as North Dakota and Iowa. The majority of the grain belt is expected to stay drier than normal during that time with chances for precipitation isolated to Michigan and Ohio.   

 

Exporters sell 135,000 MT of soybean cake and meal for delivery to Philippines during the 2017/2018 marketing year-USDA

 

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Last week’s supply and demand report will most likely continue to weigh on prices this morning. The surprise yield increase for corn was well above market expectations and some analysts are concerned they may raise it further in the coming months. Soybean yield was also above expectations and recent stories about delays in soybean imports in China may also be in the back of traders minds this morning.

 

The cash market creeped higher last week with Soybeans posting stronger gains than corn. Soybean basis improved nationally by 3 cents with soybean plants up 7 cents and basis at river terminals up 11 cents. The gulf soybean basis increased 7 cents this week. Corn basis increased a penny across the U.S with ethanol plants up 1.5 cents and basis at river terminals increasing 3 cents.   

 

 

Russian wheat prices fell for a second week in a row as the Rouble lost strength compared to the dollar. Russian wheat fell to $191.5 per metric ton last week, down from $192 the week before. The large Russian harvest continues to put downward pressure on global prices. Russia is expected to export a record 45 million metric tons this marketing year.     

 

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November 10, 2017 | Grain Hedge Insights | Kevin McNew | Views: 834

Weekly Cash Comments

Weekly Cash Commentary for week ending 11/10/2017

Soybeans continued to move higher on basis this week as harvest wraps up and fresh supplies are becoming limited. For the week, US average soybean basis climbed 3-cents while corn basis inched up 1-cent as harvest deliveries were still strong in the Western Cornbelt.

Beans found strength this week driven in part by the Gulf export market which shot up 7 cents a bushel which helped an even bigger move at upstream river terminals which garnered an 11-cent advance. There was however some disruptions in barge traffic on the lower Ohio near Paducah, KY as heavy rains and a rock dike stymied movement. Elevators there took a defensive stance on basis giving up 6 cents on the week. Crush plants followed suit with the broader market moving up 7 cents on average but gains of 10 to 15 cents were fairly widespread at some key facilities.

 

For corn, the market was more subdued as harvest continues to be in full force in the Upper Midwest. Nonetheless, river terminals as a group still managed a 3-cent advance on average. However, ethanol plants were more subdued bidding up basis only 1.5 cents on average.

Basis levels should continue to climb as harvest wraps up in the coming days for beans and likely wraps up enough in corn to slow pipeline supplies. With futures heading south farmer selling should be more limited once we get done with the harvest season.

 

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November 09, 2017 | Grain Hedge Insights | Kevin McNew | Views: 1138

Export Sales for Corn and Wheat This Week Were Strong

January Soybeans Trading Higher This Morning

In the overnight session the grains were mixed soybeans showing the most strength as traders anticipate a production revision lower in the WASDE report released today. December corn is trading unchanged, January soybeans are trading 3 ¾ cents higher this morning and are now above $10 per bushel. December Chicago wheat is up ¼ penny this morning.

 

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Ethanol production improved only slightly this week with the Wednesday EIA report showing last week’s production at 1.057 million barrels per day, up from 1.056 million barrels per day last week. Ethanol stocks decreased slightly to 21.345 million barrels but continue to be at record levels for this time of the year. Since the beginning of the marketing year ethanol has been produced at a strong rate, averaging around 3.3% above last year’s levels.


 

It is taking longer to issue safety certificates for non GMO soybeans for import into China and at least a couple vessels are without certificates in China ports. The delay in receiving these certificates can be very costly as traders suffer from higher demurrage costs for each day the ship sits without being unloaded. Though this delay has impacted only a few ships recently it is changing the way traders are sourcing their soybeans, favoring the Gulf of Mexico over the Pacific Northwest because the longer transit time provides more lead to receive the safety certificates on time.


 

Export sales were strong for corn and wheat this week, but below expectations for soybeans. This weeks wheat export sales were a marketing year high and beat expectations sharply. This weeks wheat sales was boosted due to a large Iraq order of 450,000 metric tons. Corn sales were also up sharply from last week, with Mexico accounting for nearly half of the sales. Mexico accounted for nearly all the new crop corn sales recorded this week. Soybean sales were down 39 percent from last week and missed analyst expectations.

 

Weekly Export Sales-

 

Actual

Estimated

Wheat

781

350-550

Corn - OC

2,364

1,200-1,600

Corn - NC

574

500-700

Soybeans - OC

1,160

1,300-1,800

Soybeans - NC

4

0-50


 

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November 08, 2017 | Grain Hedge Insights | Kevin McNew | Views: 1119

Chicago Soybean Futures Rose for a Third Consecutive Session on Wednesday

Reuters Poll of Analysts Say the Expectation is for the USDA to Revise Corn Production Higher

In the overnight session the grains were mixed with December corn down ½ a cent, January soybeans up 1 ¼ cents and December Chicago wheat down 2 ½ cents this morning. Soybeans have had a strong three days as traders anticipate the oilseeds production being revised lower in tomorrow’s USDA report. Corn continues to be range bound, but soybeans trend-line support has held over the last week and January soybeans is now only 2 cents away from $10 per bushel.

 

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According to a Reuters poll of analysts, the expectation is for the USDA to revise corn production higher to 14.33 billion bushels from 14.28 billion bushels reported in October. The revision is expected to come from a stronger yield of 172.4 bushels per acre which would be .6 bushels per acre higher than last month. Soybean production is expected to be lowered to 4.408 billion bushels from 4.431 billion bushels in October. The trade is expecting yield to be at 49.3 bushels per acre from 49.5 bushels per acre in October.


 

Yesterday, the lower Ohio river at Paducah was closed to navigation due to high water following recent rains. The river has risen more than 3 feet in the past week to 16.6 feet and is expected to peak next Tuesday. The Army Corps will be working to remove a rock dike that is preventing vessels from passing over the lowered wicket dam during high water periods, but it is unclear how long the stretch of river will be closed.   

 

In a recent tender by Egypt’s GASC for wheat  delivered between December 15th-30th the lowest offers was for Russian wheat at $195.30 and $196.50 per metric ton.
 

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November 07, 2017 | Grain Hedge Insights | Cody Bills | Views: 922

Chicago Soybeans Futures Turn Lower on Tuesday as Harvest Reaches Completion

Grains Trading Lower in Overnight Session

In the overnight session the grains are trading lower with December corn down 1 cent, January soybeans down 1 ¾ cents and December wheat down 4 ½ cents.

 

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The latest Crop Progress report, which was released yesterday afternoon by the USDA, showed that harvest pace was in line with analyst expectations. Soybean harvest was 90 percent complete, up from 83 percent complete last week and in line with the five year average. Corn harvest was reported at 70 percent complete, up from 54 percent the previous week, but still behind the five year average pace of 83 percent complete.  

 

Exporters sell 130,000 MT of Corn for delivery to unknown destinations during the 2017/2018 marketing year - USDA

 

Winter wheat condition improved to 55 percent of the crop rated good-to- excellent, up from 52 percent a week ago. The USDA reported that 91 percent of the crop has been planted, up from 84 percent a week ago. Planting pace is now in line with the five year average.   

This week President Trump will be visiting Beijing as a part of his Asian tour which has included Japan and South Korea so far. While visiting, Chinese soybean buyers will commit to buying more U.S soybeans by signing a letter of intent. The quantity of U.S soybeans is currently unknown, but the gesture marks the importance U.S farm goods in China. China is also expected purchase more U.S. beef after the country lifted a trading ban this year.        

 

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November 06, 2017 | Grain Hedge Insights | Kevin McNew | Views: 794

Heavy Rains Stalled Harvest in the Midwest; Back on Track This Week

The Grains Were Trading Higher Overnight

In the overnight session the grains are trading higher with December corn up 1 cent, January soybeans up 1 ¾ cents and wheat up 3 ½ cents.

 

Exporters sell 130,000 MT of Corn for delivery to unknown destinations during the 2017/2018 marketing year-USDA

 

Temperatures are expected to continue being cooler than normal throughout the majority of the grain belt in the 6-10 day forecast. The precipitation is expected to be drier than normal across the Midwest except for northern Minnesota and Wisconsin. The market will be looking to the USDA Supply and Demand report which is scheduled for release on Thursday this week. Early expectations for the report are for corn yield to be moved higher and for soybean yield to be revised lower.   

 

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The wheat market is trading higher on short covering this morning and some positive news that Iraq has purchased 500,000 metric tons of U.S. wheat. Cargill will supply 300,000 metric tons, ADM will supply 150,000 metric tons and another undisclosed firm will supply 50,000 metric tons. Weather in eastern Australia continues to worsen as hot dry weather continues to threaten further deterioration in the wheat production.

 

The cash market is showing some signs of rebounding from harvest lows with the national basis average increasing 1 cent for corn and 3 cents for Soybeans. Barge rates have declined to seasonally normal levels allowing river terminals to improve bids this week between 5-10 cents for corn and 10-15 cents for soybeans. Soybean plants also increased their bids this week, jumping 5 cents on average across the U.S.

 

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November 03, 2017 | Grain Hedge Insights | Kevin McNew | Views: 1112

Soybean Market Turns Higher

Corn and Soybeans Down in the Overnight Market

In the overnight session the grains are trading lower with December corn down ¼ a cent, January soybeans down 2 ¼ cents and wheat down 1 ¾ cents. Temperatures are expected to be cooler than normal in the 6-10 day outlook for the majority of the grain belt. The precipitation outlook should turn drier than normal over the next 6-10 days.

 

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EXPORTERS SELL 300,000 METRIC TONS OF HARD RED WINTER WHEAT FOR DELIVERY TO IRAQ DURING THE 2017/2018 MARKETING YEAR- USDA

EXPORTERS SELL 102,400 METRIC TONS OF CORN FOR DELIVERY TO MEXICO DURING THE 2017/2018 MARKETING YEAR- USDA

EXPORTERS SELL 135,000 METRIC TONS OF CORN FOR DELIVERY TO SOUTH KOREA DURING THE 2017/2018 MARKETING YEAR- USDA

EXPORTERS SELL 251,000 METRIC TONS OF GRAIN SORGHUM FOR DELIVERY TO UNKNOWN DESTINATIONS DURING THE 2017/2018 MARKETING YEAR- USDA

 

On Wednesday and Thursday the soybean market turned higher after finding trendline support early this week. The soybean uptrend started in late August when the Oilseed printed lows and has provided strong support on August 31st, September 12th, early October and again this week. Soybean export sales beat expectations on Thursday which also helped to lift prices.  

  

 

Yesterday, Informa announced their latest production estimates, seeing 2017 corn production at 14.410 billion bushels with a yield of 173.4 bushels per acre. Informa’s Soybean estimate were set at 4.447 billion bushels with a yield at 49.7 bushels per acres. This compares to the latest FCStone yield of 173.7 bushels per acre for corn and 49.9 bushels per acre for soybeans. Both private estimates were greater than the latest October USDA estimates which have Corn production pegged at 14.280 billion bushels with yield of 171.8 bushels per acre and USDA soybean production estimates at 4.431 billion bushels with a yield of 49.5 bushels per acre. On November 9th the USDA will release their latest supply and demand estimates.

 

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November 02, 2017 | Grain Hedge Insights | Kevin McNew | Views: 1145

US Winter Wheat Planting Nearing Completion

Grains Moved Higher in the Overnight Session

In the overnight session the grains moved higher with December corn up 1 ½ cents, January soybeans up 3 ¼ cents and December Chicago wheat up 3 ¾ cents this morning. Wheat’s move higher this morning appears to be more short covering action after the grain broke through August lows early on this week. The previous low, which was once support will now likely turn to overhead resistance around 4.23 on the December SRW chart.  


 

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Weekly ethanol production increased again this week to 1.056 million barrels per day up from 1.039 million bpd. This was a strong weekly production was 3.3 percent above last year’s production and is the 4th highest ethanol producing week on record. Ethanol stocks increased to 21.474 million barrels from 21.034 million barrels last week. Year-over-year stocks continue to rise as ending stocks remain steady during a period when the seasonal tendency is to reduce ethanol stocks. In the latest Grain crushings report released yesterday afternoon, the USDA showed that 447.6 million bushels of corn was used for ethanol production in the month of September, up from 435.2 million bushels last year. The USDA also stated that 1.847 million metric tons of DDGs were produced in September which was down 1.965 million from last year.

 

Exporters sell 1,356,360 MT of Corn for delivery to Mexico, of which 845,820 MT is for 2017/2018 delivery and 510,540 MT is for 2018/2019 delivery-USDA

 

The Oilseed Crush report, which was released yesterday at 2 PM CST showed that 145.35 million bushels were crushed in the month of September which was inline with analyst expectations of 145.4 million bushels. The USDA reported that soy oil ending stocks were 1.711 billion pounds, which was above expectations of 1.664 billion pounds.

Rains today will continue to slow planting progress in Argentina. With limited precipitation in the forecast early next week there should be an opportunity for fieldwork before rain returns to the forecast by late next week.

 

Export sales beat expectations for Soybeans with strong sales to China totaling to 1,531,400 metric tons this week. Corn on the other hand recorded sales on the low end of expectations, down 37 percent from the previous week and down 33 percent from the four week average. Wheat sales were mostly steady, down only 4 percent from last week and in the middle of trade expectations.

 

Weekly Export Sales-

 

Actual

Estimated

Wheat

347

250-450

Corn-OC

811

800-1,100

Corn-NC

90

0-100

Soybeans-OC

1,967

1,450-1,850

Soybeans-NC

15

0-50

 


 

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November 01, 2017 | Grain Hedge Insights | Kevin McNew | Views: 1000

Rains in the Midwest Slow Corn/Soy Harvest in Next Two Weeks

Corn and Soybeans Trade Higher in the Overnight Session

In the overnight session corn and soybeans traded higher with December corn up 1 cent and January soybeans up ¾ cents. Wheat struggled yesterday to gain any traction as the grain traded through support set on August 29th at 4.22 ½. Chicago wheat decisively broke and closed below support level and looks as if it will continue the downward push today. Ample stocks and record wheat export from Russia continues to pressure the market.

 

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Today the USDA will release the Grain Crushings and Oilseed Crushings report at 2 PM CST. According to a Reuters poll, analysts are expecting for the Oilseed report to show soybeans crushed in the month of September around 145.4 million bushels down from the 151.6 million bushels in August. The range of estimates stretched from 144.2 million to 147 million bushels. Soy oil stocks are estimated at 1.664 billion pounds down from 1.81 billion pounds in the end of August.

The NOPA crush report which is released early on in the month showed disappointing crush numbers for the month of September. NOPA released that its members crushed 136.414 million bushels which missed expectations by nearly two million bushels.

 

This morning it was announced that China will increase state purchases of grains. The move is a result of heavy rains and high humidity impacting the rice, wheat and corn quality.  


 

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October 31, 2017 | Grain Hedge Insights | Kevin McNew | Views: 755

Harvest Pace In Line with Market Expectations

Grains Mixed in the Overnight Session

In the overnight session the grains were mixed with November soybeans up 2 ½ cents. December corn is trading down ½ a cent and December Chicago wheat was down ½  of a cent. November soybeans started the day out strong yesterday, but early gains evaporated by the close. Uptrend support is still intact for November Soybeans at $9.70, but yesterday’s trade action was not a ringing endorsement for the resumption of soybeans uptrend.

 

Exporters sell 100,000 metric tons of Hard Red Winter Wheat for delivery to Iraq during the 2017/2018 marketing year. USDA

 

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The crop progress report showed that harvest pace advanced in line with market expectations. U.S. corn harvest advanced to 54 percent complete, up from 38 percent complete a week ago. Soybean harvest is now 83 percent complete, up from 70 percent last week. Soybean harvest is right on pace with the average of the last five years, but corn harvest is behind the average pace of 72 percent complete. Next week’s harvest pace should progress rapidly across the western part of the Midwest but could experience some delays with more precipitation expected across the eastern grain belt.

 

Winter wheat planting progress advanced to 84 percent complete, up from 75 percent the previous week. Traders are concerned that the difficult planting weather combined with the low wheat prices is encouraging farmers to switch acres out of wheat. Currently, December Chicago wheat is trading lower and looks like it will test a support level set on August 29th at 4.22 ½.

 

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