July 20, 2016 | Grain Hedge Insights | Kevin McNew | Views: 404
July 20, 2016 | Grain Hedge Insights | Kevin McNew | Views: 301

Crude Oil Holding Ground at 10-Week Low

Grains posted anemic gains in the overnight session.

Grains posted anemic gains overnight after yesterday’s sharp sell-off.  Equity futures were up overnight and crude oil was hovering around unchanged waiting for fresh EIA inventory data later this morning.

 

The latest weather models show hot weather on Thursday and Friday in the Midwest, but subsiding after that.  By early next week high temps are expected to be 7 degrees lower and by late next week be as much as 10 degrees lower. Rain also appears to be most likely this weekend into next week in the heart of the Corn Belt.

In overnight news, a South Korea feed buyer bought 70,000 MT of optional origin corn. Jordan passed on its tender aiming to buy 100,000 MT of wheat while Syria bought 200,000 MT of Russian wheat.

 

Crude oil is holding ground at a 10-week low, after the American Petroleum Institute reported that U.S. crude supplies fell by 2.3 million barrels for the week ended July 15, according to sources. The closely watched Energy Information Administration report will be released Wednesday. Analysts polled by S&P Global Platts forecast a decline of 1.25 million barrels for crude inventories.

 

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


 

July 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 480
July 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 244

US Dollar Hits highest mark in Months

Grains were Lower in the Overnight

Grains were lower overnight while the US Dollar hit its highest mark in 4 months. Crude oil recovered some of yesterday's losses while equity futures drifted towards negative territory to start the day.

 

USDA’s crop progress report on Monday showed no material changes in crop conditions with both corn and soybean crop ratings holding steady at 76% and 71%, respectively from the previous week. Spring wheat dropped 1% to 69%. But the overall trend is still better crops ratings than what traders have been expecting as well as conditions that are generally better than last year.

 

Precipitation totals were light in the last 24 hours with some rain events hitting W NE and S IN/OH. Intense heat sets up in the Midwest US and northern Plains from Wednesday through Saturday, with high temperatures between 95°F to 105°F and low temperatures near 80°F; temperatures normalize early next week, but warmth returns thereafter. The latest weather models show cooler temps and more precip for the Midwest in the next 3 to 5 day period.

 

Oil prices erased early losses on Tuesday after falling on concerns over a crude and refined fuel glut outweighed an expected cut in U.S. shale production and a probable further draw in U.S. crude inventories. Prices turned higher as an official said oil production at Libya's Sarir field had been suspended due to protests at the Hariga terminal. Output at the Messla field was also at risk if ports shut, the official said.

 

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

July 18, 2016 | Grain Hedge Insights | | Views: 454
July 18, 2016 | Grain Hedge Insights | Kevin McNew | Views: 232

Crude Oil Starts the Week Lower

Crop conditions to be released today; after the market closes.

Grains traded both side of unchanged overnight but came into the morning break with losses, especially for soybeans.  In outside markets, crude oil started the week lower while equity and bond futures posted modest gains.

 

Weather for the 2nd half of the month looks to be hot and wet which gave the soybean market a reason to head lower. After a cooler than normal first half of July, Corn Belt temperatures will heat up later this week to average 6 to 9 degrees hotter than normal and much of the rest of the nation will also be hot. New GFS maps have the next 16 days with widespread storms east of the Mississippi, limited moisture and some heat across the WCB and N Plains and very limited storminess and excessively hot and dry over the S Plains.

 

NOPA June crush came in at 145.05 mb compared to trade est. of 155.4 and May’s crush of 152.82. The avg. daily rate of crush was 4.84 mb which is the lowest rate of the year, just below the Jan rate of 4.85 mb. Oil stocks were 1.985 bln lbs vs. 1.994 in May. Meal exports were 594 tst vs. 682 in May.

 

Crop conditions will be released later today after the market close. Crops should show a deterioration in SD, NE, MI, OH and IN while rains benefited crops in ND, MN, KS, much of MO, and good portions of IL, IN and WI.

 

Oil prices fell on Monday as traders shrugged off the impact of the attempted coup in Turkey and the market turned its attention to bearish fundamentals, while disruptions to crude exports in Libya lent prices some support. A report by Morgan Stanley raised concerns about the longer-term outlook for oil consumption as demand for petrochemicals rather than fuels such as diesel and gasoline is clouding the outlook for crude demand.

 

In export news, Egypt is in the market for wheat although the US is likely not to garner the business as last week’s deals to Egypt went to Ukraine and Russia.

 

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

July 15, 2016 | Grain Hedge Insights | Jackie Roembke | Views: 392

Weekly Cash Comments

Weekly Cash Commentary for week ending 07/15/2016

On average, national basis was lower this week with corn off 2 cents a bushel and soybeans lost almost 3.5 cents per bushel.

 

Even with strong exports this week, corn river basis was off the most this week, losing 7 ¾ cents per bushel. However, corn barge basis has moved up 10 cents in the last two days which could indicate expectations for continued export strength. Ethanol plant basis was lower as well, off almost 3 cents per bushel.

 

Soybean crush facilities were off almost 4 ½ cents this week, losing all of last week’s gains. Along the river, soybean terminals lost 1 ½ cents. Soybean barge basis was down as well, off 11 cents, potentially following the drop in exports this week. 

 

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

July 15, 2016 | Grain Hedge Insights | Kevin McNew | Views: 220

Grains Edge up in the Overnight Session

Crude futures dipped towards $47 a barrel on Friday

Grains edged up overnight. Soybeans moved up slightly after a major slide in yesterdays session.Corn gained 0.7 percent while wheat gained more than one percent.

 

U.S. Soybeans fell 3.8 percent on Thursday, giving up early gains after new weather forecasts boosted expectations of a robust harvest in the U.S. Additionally wheat and corn closed lower.

 

China’s first soybean auction of the year was off to a flying start with 99.7 percent of what was offered being sold. Additionally, in the second quarter, China’s GDP rose 6.7 percent from a year earlier. Resulting in slightly better number than what economists were expecting.

 

Exporters sold 320,000 MMT of US soybeans to unknown destinations for a 2016/2017 delivery.

 

The weather outlook over the weekend and into early next week is calling for rain from the northeast to the southwest across the corn belt. Favored areas include a good portion of the Dakotas, central Nebraska, northeast Iowa,southern Minnesota, southern Wisconsin, northern Illinois, and northern Indiana. The additional showers and lack of notable heat will continue to provide very good pollination conditions through the first half of the week in the corn belt.    

 

Crude futures dipped toward $47 a barrel on Friday on concerns that a persistent global glut of crude oil and refined products will impede any price recovery. While the price collapse over the past two years has led to a sharp drop in global oil production, stored inventories remain at high levels, particularly for refined products, weighing on a recovery in prices.

 

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


 

July 14, 2016 | Grain Hedge Insights | Kevin McNew | Views: 303

Crude Oil Recovers

Grains trade higher in the overnight session.

Grains traded higher yet again in the overnight session. Corn was up 10 cents, soybeans up 12, and wheat up 5.

 

In world news, China is scheduled to auction around 300,000 tonnes of soybeans from its temporary reserve on Friday, a move that analysts think may help ease tight domestic supplies of the oilseed. China has not revealed the size of its reserves but it is thought to hold about 5 million tonnes of soybeans in its temporary reserve, said Liang Yong, an analyst at Galaxy Futures.

 

Crude prices recovered more than a dollar a barrel  from sharp losses that took place this Thursday. Brokers said the downtrend could be expected to resume given a worry over slowing economic growth along with record highs in stocks.  

 

Exceptionally hot (10°F to 15°F above normal) and dry weather begins early next week in the Midwest US, continuing through the end of July; some indication that ridge pulls back towards the Rockies in early August, offering potentially cooler/wetter weather for the eastern Soybean Belt but uncertainty remains high.

 

A U.S. government weather forecaster said the La Nina weather phenomenon will likely develop during August through October of 2016. The climate prediction center, an agency of the national weather service said in its monthly forecast there is a 55% to 60% chance that the La Nina weather phenomenon will develop during the fall and winter of 2016/20/17

 

Wheat exports came in below expectations with old crop at 318,000 tonnes and new crop at 397,000 tonnes. Corn exports were above expectations with old crop netting 667,800 and new crop at 772,500. Soybeans exports were at the low end of expectations with old crop at 364,200 and new crop at 429,000.

 

Gold gained for the first  time in five sessions, resulting from a recent rally for U.S. stocks that took a slight pause.

 

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

July 13, 2016 | Grain Hedge Insights | Kevin McNew | Views: 281

WASDE Report Showed Expected Numbers

Grains were up in the Overnight Session

Corn, soybeans, and wheat were higher following the overnight. Corn up 11 cents and soybeans up 26 cents, moving off of yesterday’s momentum. Wheat was up 6 cents.   

 

The WASDE report that came out yesterday at 11:00 am CDT reported corn old crop 1,701 and new crop 2,081. Soybeans old crop was reported at 350 and new crop was 290, and wheat new crop was reported at 1,105. Overall fairly consistent numbers with the predicted outcome.Investors continue to follow the weather outlook and remain hesitant. The USDA slashed its outlook for global inventories by the end of the 2016-17 crop year and forecast a spike in U.S. exports to a four-year high.

 

Reports of a hot and dry forecast have raised fear of damages to crops. NOAA’s 8-14 day temperature outlook shows much of the Midwest at risk for higher temperatures.

Showers expected to continue around the Great Lakes area into tomorrow. Weekend rains are predicted to favor the central Midwest. Looking at the rest of the week, high projections are peaking in the low nineties in the north/eastern Midwest. Along with projected highs of mid-nineties or better central southwest. The 16 to 30 day forecast is forecasting near to above normal temperatures, posing the warmest/driest risk for the northeast and areas in the deep south.

 

Russia’s head weather forecaster, Hydromet Centre, reported that Russia’s favorable weather could result in the largest grain crop since in post-Soviet history. They are expected to harvest 110 millions tonnes of grain this year, up two million from tonnes from the record crop of 2008 according to the agricultural ministry.

 

Egypt’s FAO report show that ergot is not a threat to the wheat crop. "Because the fungus is not able to settle in Egypt, it's not possible for it to spread and therefore it cannot cause economic losses, which makes it unnecessary to take preventative measures," part of the FAO report sent by the ministry said.

 

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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