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May 20, 2016 | Grain Hedge Insights | Kevin McNew | Views: 221

Weekly Cash Comments

Weekly Cash Commentary for week ending 05/20/2016

Corn basis was unchanged on the week while soybean basis firmed nearly two cents a bushel.

 

In corn, active farmer selling in the Western Cornbelt this week brought some pressure to basis levels as did weakness out of the Gulf. Ethanol plants as a group were mostly unchanged, but there was some weakness apparent in the Western Cornbelt where plants seemed to be 3 to 5 cents lower on the week. River bids were also weaker, giving up 2 cents a bushel on average.

 

For soybeans, farmer sales were limited after soybean futures backed off of recent highs. River terminals were up 3 cents a bushel on the week, while soybean crushing plants were up 2 cents on average.

 

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

May 20, 2016 | Grain Hedge Insights | Kevin McNew | Views: 182

Grains Find Strength Overnight

Equity Futures were also Higher

Grains found strength overnight with soybeans leading the complex higher while corn and wheat followed with more subdued gains. In outside markets, equity futures were higher while crude oil and the US dollar were mostly steady.

 

Producers in isolated parts of Brazil's main grain state of Mato Grosso started harvesting the winter corn crop earlier than expected to take advantage of near record prices, as the drought that has curtailed yields also accelerated the crop's maturation. Reports of winter corn harvesting are still isolated in the center-west state of Mato Grosso, according to agronomists on the Rally da Safra crop tour.

 

French farmers had sown 91% of their corn crop, up from 78% but lagging the 96% progress seen a year ago, farm office FranceAgriMer said on Friday.  Corn planting has been slowed by wet, cool weather during much of spring so far and FranceAgriMer said the average sowing date was 15 days later than the average of the past five years.

 

South Korea's KOCOPIA rejected all offers and made no purchase in a tender for 55,000 MT of corn which closed on Friday, European traders said. Prices were regarded as too high, they said. Lowest offer was $198.60 a tonne c&f including surcharge for additional port unloading, they said.

 

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

May 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 255
May 19, 2016 | Grain Hedge Insights | Kevin McNew | Views: 265

US Dollar Continues it’s Rally Overnight

Grains were weaker overnight

Grains were weaker overnight as strength in the US dollar continued to weigh on all commodity markets especially crude oil which was off over a $1 a barrel.

 

The US dollar continued its rally overnight and into the morning session, gaining 0.4% overnight and reaching its highest mark since March 23. The Federal Reserve will likely raise interest rates in June if economic data points to stronger second-quarter growth as well as firming inflation and employment, according to minutes from the U.S. central bank's April policy meeting released on Wednesday. That view, expressed by most Fed policymakers at the last policy meeting, suggests the central bank is much closer to lifting rates again than Wall Street expects.

 

This morning, USDA’s export sales report had supportive corn numbers with a good showing on both old- and new-crop deliveries, which beat expectations. Wheat and soybeans were less impressive though still within expectations.

 

WEEKLY EXPORT SALES

                       OC-Act        OC-Exp        NC-Act      NC-Exp

Corn                  1,473       900-1,300         541       100-300

Soybeans              556          300-500         158         50-250

Wheat                  175             0-250         573        200-400

 

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

May 18, 2016 | Grain Hedge Insights | Kevin McNew | Views: 250
May 18, 2016 | Grain Hedge Insights | Kevin McNew | Views: 262

Grains were Weaker Overnight

US Dollar was Higher

Grains were weaker overnight, led by soybeans. In outside markets, the US dollar was higher while equity futures came under pressure.

 

The dollar rose to a three-week high against the euro and a basket of currencies on Wednesday on renewed expectations that the Federal Reserve could raise interest rates soon.  Stock markets in Europe and Asia weakened on Wednesday in the wake of accelerating U.S. inflation and comments from Federal Reserve officials that rekindled prospects of an interest rate rise within months.

 

Showers are exiting the far eastern Corn Belt currently, and a system later this week has shifted farther to the south. This will allow most of the eastern Corn Belt to remain dry until the latter 1/2 of the 6 to 10 day, with intermittent showers during the balance of the 15-day period resulting in brief interruptions. However, the seeding pace should improve, particularly as warmer weather develops early next week."

 

Showers will still move through the Delta/Southeast on Friday/Saturday, but drier weather will then also aid late fieldwork in these areas until the 11 to 15 day. The wettest 6 to 15 day conditions are expected from the Plains into the southwest Midwest, with extensive rain also occurring in the far S. Plains in the next two days. While the moisture is aiding winter wheat yields during late growth, the active pattern will also hinder maturing wheat in Texas/Oklahoma.

 

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

May 17, 2016 | Grain Hedge Insights | Kevin McNew | Views: 310
May 17, 2016 | Grain Hedge Insights | Kevin McNew | Views: 278

Crude Oil Up in the Overnight Session

Grains were mixed with soybeans higher and corn lower.

Grains were mixed overnight with soybeans higher and corn lower. Wheat was nearly unchanged. In outside markets, crude oil was higher but off of its highs at $48.40 while equities and the US dollar were mostly directionless.

 

On Monday, private analyst Informa pegged US corn acres at 93.4 million versus USDA’s forecast of 93.6, while soybean acres were pegged at 83.0 versus 82.2 by USDA. Analysts have been suggesting as much as 2 million more acres of soybeans, so Informa’s number of only 800,000 more acres would be substantially below that.

 

In other news on Monday, USDA’s crop progress report showed a strong pace for corn and soybean plantings.  Corn plantings were 75% completed while soybeans were at 36% completed. The US winter wheat crop was rated at 62% good-to-excellent, on par with last week’s score.

 

Overnight, South Korea's largest feed-maker NOFI issued an international tender to purchase about 65,000 tonnes of corn, an unspecified volume of feed wheat and 7,000 tonnes of soymeal. UkrAgroConsult raised its forecast for Ukraine's 2016 wheat harvest to 21.5 million tonnes from 19.8 million. The consultancy's Yelizaveta Malyshko told Reuters that favourable weather this spring and "ideal" moisture content in soil were the main reason for the improved outlook.

 

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

May 16, 2016 | Grain Hedge Insights | Kevin McNew | Views: 318
May 16, 2016 | Grain Hedge Insights | Kevin McNew | Views: 354

Is There a Shift From Corn to Beans?

Grains were Lower in the Overnight

Grains were lower overnight while crude oil continued to reach fresh highs since its low in January.

 

Rains were fairly common over the US grain belt over the weekend as a quarter to a half inch of rain hit most of the key growing regions. After a cold start to the week (record cold for some) temperatures will warm across the Plains, Corn Belt and East and moisture will remain plentiful.  Temperatures are expected to surge to above normal later this week and continue “warm” next week too across the Plains and Corn Belt.

 

A one-day strike at the Rosario grains export hub in Argentina ended on Friday after the government compelled union and company officials to enter into wage negotiations for 15 days, a union leader said. The strike began at midnight local time and ended around noon after the union agreed to the government mandate for a "reconciliation" period to settle the dispute.

 

Soybean prices have floundered in recent sessions as expectations that farmers are switching planting intentions to beans and away from corn. There are expectations the USDA's June 30 acreage report could show a shift of 1-2 million acres from corn into soybeans, compared with the government's March 31 planting intentions report.

 

Crude oil prices are on the upswing to start the trading week as markets shrug off initial negativity in the wake of soft data from China reported over the weekend. China’s domestic oil production dropped 5.6 percent from a year ago to 16.59 million metric tons in April, the steepest slide since November 2011, according to government data released Saturday. The trend is likely to worsen in the months ahead and, along with U.S. production declines, will help re-balance the global oil market later this year.

 

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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