September 16, 2016 | Grain Hedge Insights | Kevin McNew | Views: 335

Weekly Cash Comments

Weekly Cash Commentary for week ending 09/16/2016

National basis levels moved lower after a taking a break last week. Historically basis levels are pegged to keep moving lower until mid to late October.

 

On average, corn lost 1/2 cents per bushel.  Ethanol plants were down 1 cent per bushel this week. Corn basis along the river was off the most losing almost 3 cents. Basis along the river and at the gulf typically gets hit the hardest this time of year.

 

Soybean basis was hit especially hard this week off almost 4 cents nationally. Crush facilities took the lightest blow losing 2 3/4 cents. NOPA reported that soy processors crushed 2.6 percent fewer beans in August than a year ago and the pace fell below market expectations due to declines at plants in the Southwest. Soybeans along the river were the biggest loser, off 7 1/4 cents.

 

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

September 16, 2016 | Grain Hedge Insights | Kevin McNew | Views: 267

Disappointing NOPA Crush Numbers

Possible interest rate hike

Grains were weaker to start the day as outside markets for equities and oil were lower on thoughts that the Fed might raise interest rates next week.

 

Yesterday, NOPA soybean crush figures were a disappointing 131.8 MB for the month of August. That compared to an average analyst estimate of 136.2 MB and an August of 2015 crush of 135 MB.

 

In overnight news, global wheat sellers sat on their hands for the latest round of Egyptian wheat tenders. Egypt's state grain buyer, the General Authority for Supply Commodities (GASC), did not get any offers from global wheat suppliers at its purchase tender on Friday on the back of continuing worries over the country's ergot fungus policy, Cairo-based traders said.

 

In weather news, overnight rains in the Western Cornbelt with heavier rains near Nebraska/Iowa & Iowa/South Dakota borders will slow harvest there. Rain is expected to head east next 2 days and favor OH/IN. Next week should be more favorable for dry conditions and harvest progress.

 

This morning fresh inflation data in the US showed consumer prices were rising faster than expected. That put Fed watchers on alert for a potential interest rate hike at the Fed meeting Sep 20-21. The US dollar index is up 0.5% while crude oil and equities are lower. The Baker Hughes rig count later today should provide more guidance for crude oil .US rig count numbers have been increasing steadily since the end of May.

 

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

September 15, 2016 | Grain Hedge Insights | Kevin McNew | Views: 314
September 15, 2016 | Grain Hedge Insights | Kevin McNew | Views: 277

Grains Struggling to Hold Modest Gains

Crude and Equities also trying to recover from yesterday's sharp sell-down

Grains were struggling to hold on to modest gains going into the morning break. Outside markets saw crude oil and equities also try to recover from yesterday’s sharp sell-down.

 

NOPA soybean crush figures are due out later this morning and are expected to reach 136.2 million bushels for the month of August. That would be a record large figure for the month if realized. Estimates range 128 to 142 MB.

In weather news, the Midwest should see rains return tonight into the weekend before breaking early next week. The long-term forecast for 16-30 days shows a wet trend, potentially slowing the US harvest.

 

Export sales this morning were unimpressive with all three commodities coming in at the low end of expectations for the week.

 

WEEKLY EXPORT SALES

                                         Actual     Expected

Corn                                     724      800-1,100

Soybeans                            1,012     900-1,200

Wheat                                   402       350-550

 

On Wednesday, EIA crude oil stocks were off for the week coming in 50,000 barrels below last week. Traders had expected a 3.8 million barrel build. However, gasoline stocks ballooned on the week helping push oil prices lower.

 

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

September 14, 2016 | Grain Hedge Insights | Kevin McNew | Views: 322
September 14, 2016 | Grain Hedge Insights | Kevin McNew | Views: 195

Grains Slightly Weaker in Overnight Trade

Crude Oil Continues to Dip Lower

Grains were unchanged to slightly weaker in overnight trade while in outside markets equity futures tried to recover some of yesterday’s sharp losses while crude oil continued to dip lower.

 

Yesterday, Argentina's government said they were considering postponing a tax cut planned for next year on soy exports, as a recession in Latin America's third-largest economy eats into fiscal revenue. Also, Argentine farmers are expected to harvest at least 15 MMT of wheat in the 2016/17 crop year versus 11.3 in the previous season. Wheat planting in Argentina expanded dramatically when President Mauricio Macri eliminated export taxes soon after his December inauguration.

 

Japan's Ministry of Agriculture is seeking to buy a total of 149,231 tonnes of food quality wheat from the United States, Canada and Australia in a regular tender that will close late on Thursday.

 

The US has issued a challenge with the WTO for China's price supports for domestic production of rice, wheat and corn. The US Trade Representative's office said China's "market price support" for these grains was estimated to be nearly $100 billion above the WTO limits and constitutes an artificial government incentive for Chinese farmers to increase output.

The American Petroleum Institute (API) is reporting a 1.4-million-build in US crude oil inventory over last week—bursting the bubble created the week before when official data showed the biggest draw on inventory in a century. Still, the build is much lower than expectations of a 4-million-barrel build, in part because the release of shut-in oil following a Gulf of Mexico hurricane.

 

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


 

September 13, 2016 | Grain Hedge Insights | Kevin McNew | Views: 288
September 13, 2016 | Grain Hedge Insights | Kevin McNew | Views: 233

Grains Continue to Sink Lower

Crude Oil also Sharply Lower

Grains continued to sink lower overnight as the weight of bigger crops continues to pressure the market. Outside markets saw crude oil and equity indices sharply lower while the US dollar turned higher.

 

USDA’s crop report on Monday did little to change the bearish sentiment gripping the market. Soybean production came in well above expectations, eclipsing a 4.21 billion bushel crop on a +50 bushel per acre yield. For corn, USDA was lower than their August estimate but not as low as the average analyst expectation.

 

The first report by USDA on corn harvest pegged the US crop at 5%, behind the 5-yr. avg. of 7%, which was also the avg. of trade expectations.Both corn and soybean condition ratings held firm on the week.

 

In international news, Australia on Monday raised its forecast for wheat production for the 2016/17 season by 14.6% to 28.08 MMT,  up from a forecast in June for 24.51 MMT .The raised forecast is in line with a Reuters survey of 10 analysts and traders who said they were expecting an Australian wheat harvest of 28 million tonnes.

 

Energy prices slid, weighing on currencies of commodity-producing nations, after the International Energy Agency said an oil glut will last longer than initially estimated, persisting well into 2017.

 

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


 

September 12, 2016 | Grain Hedge Insights | Kevin McNew | Views: 417
September 12, 2016 | Grain Hedge Insights | Kevin McNew | Views: 255

Grains Lower Overnight as Traders Await USDA

Oil falls for a 2nd trading day in a row.

Grains were lower overnight as traders wait for USDA’s report later this morning for further direction. In outside markets, crude oil and equities were sharply lower.

 

Today’s USDA report is expected to show a decline in US corn production and an increase in soybeans relative to USDA’s report in August.  Average analyst estimates call for a 173.4 bushel corn yield producing a 15.03 billion bushel crop. That is off from August’s estimates of 175.1 and 15.13, respectively

 

Meanwhile, good growing conditions in August have traders expecting a tick up in soybean production and yields. The August forecast by USDA was a 4.06 billion bushel crop on a 48.9 bushel per acre yield. Analysts are looking for today’s numbers to be 4.09 billion and 49.2 bushels per acre.

 

Taiwan's MFIG purchasing group has issued an international tender to buy 40,000 to 65,000 MT of corn which can be sourced from the United States or Brazil.

 

Oil fell for a second trading day in a row on Monday, after speculators cut their bullish bets by the most in three months last week and U.S. crude drillers added more rigs for a tenth week running. Adding to the pressure on the oil price, the dollar rose against most emerging-market currencies, as traders look for a greater chance of U.S. interest rates rising next week, which forced up bond yields and dented the broader commodities complex.


 

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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