July 27, 2017 | Grain Hedge Insights | Kevin McNew | Views: 339

Dollar Feels Pressure after FOMC Statement

Grains Traded Higher in the Overnight Session

In the overnight session the grains traded higher with uncertainty still surrounding the impact of the hot and dry weather. December corn up 3 1/4, November Soybeans up 8 and Chicago Wheat up 5.

 

The EIA ethanol numbers released on Wednesday showed a drop in week over week production by 14 thousand barrels per day to 1.012 million BPD. Weekly ethanol stocks also fell by 608,000 barrels to 21.529 million BPD. To meet the UDSA’s corn used for ethanol projections we will need to see ethanol production pace pick back up and run 3-5% above last year’s levels for the remainder of the marketing year.   

 

The dollar also felt pressure yesterday after the FOMC statement suggested that both overall and core inflation had declined and that the fed will start unwinding the balance sheet “relatively soon”. The language seemed to give traders the impression that there is no increased risk for a rate hike between now and December which will put pressure on the USD.     

 

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Day 2 - Wheat Crop Tour

Spring wheat crops in central northwestern North Dakota were showing the effects of hot and dry conditions and yield prospects were down sharply from a year ago, scouts on the annual crop tour said Wednesday.

 

The early-planted stuff looks the toughest, said Dave Green, executive vice president of the Wheat Quality Council, which runs the tour. Prospects were slightly better for later-planted wheat and crops in northern areas could still benefit from moisture with harvest still a few weeks away.

 

Scouts in west-central ND scouted five spring wheat fields and calculated an average yield of 21.3 bushels per acre. A year ago, scouts on the same route calculated average yields of 61.8 and 52.7 bpa.

 

Scouts on another route in central ND scouted six spring wheat fields and calculated an average yield of 35.8 bpa; last year the average yield calculation was 52.1 to 41.5 bpa. Northwest ND spring wheat fields (three) were scouted and calculated an average yield of 27 bpa; the average durum yield at 45.4 and 52.7 bpa.

Export sales were weaker with new crop wheat down 26 percent, old crop corn down 80 percent and old crop soybeans down 26 percent week over week. Old crop corn sales notched a marketing year low for this week, recording only 92,000 metric tons.     

 

Weekly Export Sales-

 

Actual

Estimated

Wheat - NC

498

 

Corn - OC

92

200-500

Corn - NC

486

200-400

Soybeans - OC

303

100-300

Soybeans - NC

531

300-1,000


 

 

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July 26, 2017 | Grain Hedge Insights | Kevin McNew | Views: 249

Day 1 Wheat Quality Tour Results are In

Corn and Beans Continued to Inch Lower in the Overnight Session

Corn and beans continued to inch lower overnight while wheat was holding on to slim gains going into the morning break.

 

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Russia's Agriculture Ministry hopes to receive government permission to export some of its grain stockpile in September. The ministry has been considering exporting 500,000 tonnes of grain from its 4 million tonne stockpile to free up storage space and to lessen federal budget spending on servicing the stock.

 

Day 1 of the US Wheat Quality Tour found average spring wheat yields of 37.9 bu/acre down from 43.1 in 2016 and the 5-year average of 45.7. The area covered was in Eastern & Central North Dakota. Day 2 of the tour will head in NW ND.

The latest weather models continue to diverge on moisture forecasts, but tend to agree on temps. Persistent heat in the Northern Plains and Canadian Prairies will persist for the next 10 days. The EC forecast through 10 days features dryness in all major North American crop regions with either little rainfall or modest totals that will come in near normal or about an inch below normal. The GFS shows a much more substantial weather system moving across the portions of the Plains and Corn Belt states as August begins that pushes 10-day rainfall from Nebraska through Iowa/Minnesota and into Wisconsin/Illinois up to 2 inches above normal.

 

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July 25, 2017 | Grain Hedge Insights | Kevin McNew | Views: 186

Crop Progress on Monday Shows Further Crop Deterioration on Grains

Grains Mixed in the Overnight

Grains were mixed overnight with soybeans posting gains while wheat and corn were lower.

 

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After the close Monday, USDA showed further deterioration in the grain crops. Soybeans plummeted to 57% good-to-excellent versus 61% last week and 60% expected by the trade. For corn, the condition ratings also came in lower than expected, off 2% from last week to 62%.

 

The latest weather model shows increasing rainfall across South Dakota and southern Minnesota into Iowa. This should bring important moisture to the drier-biased portions of the western Corn Belt from much of Iowa into northern Illinois late Wednesday into early Thursday. Some meaningful rain will also fall in southeastern South Dakota late Tuesday into Wednesday. More rain will be needed over time to increase the short subsoil moisture.

Egypt was in the market for wheat overnight. Although no official deal has been announced, the lowest offers accounting for freight were Russia and Romania.

 

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July 24, 2017 | Grain Hedge Insights | Kevin McNew | Views: 146

Grains Bolt Lower to Start the New Week

USDA Cattle on Feed Report Shows Solid Growth

Grains bolted lower to start the new week as rains fell over the weekend in key growing areas.

 

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Rainfall over the last 3 days were in the 1 to 3 inch range from Eastern IA thru the Eastern Cornbelt. Also, Eastern SD/ND into MN got 0.50 to 1 inch of precip over this time period. Weekend temps were well into the 100s for all of KS and parts on NE. Looking ahead, a storm system should bring about an inch of rain over much of Iowa by mid-week into Thursday.

 

On Friday after the close, USDA’s Cattle on Feed report showed solid growth again with July 1 cattle on feed up 104% from last year versus a trade estimate of 102.9. Placements in June were a whopping 116% high versus last June, which was well above the analyst expectation of 106.1%.

Overnight there was modest export interest in wheat from Bangladesh and Algeria. Russian wheat export prices were mixed last week after nine straight weeks of growth due to concerns over a lack of high quality wheat and strengthening competition with France for wheat supplies to Egypt.

 

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July 21, 2017 | Grain Hedge Insights | Kevin McNew | Views: 132

December Corn Drifts Back to $4 Overnight

Looking at weather shows heat across the central and southern Midwest through the weekend.

Grains were lower overnight with Dec corn drifting back to $4 in overnight trade.

 

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Yesterday after the close, Argentina’s ag ministry revised their 2016 crop forecasts, pegging the corn crop there at 49.5 MMT up from 47.5 MMT and well above USDA’s forecast of 41. For soybeans, the Argentine crop is estimated at 55 MMT down from 57 previously and USDA at 57.8.

 

Looking at weather shows heat across the central and southern Midwest thru the weekend. Rains of 1 to 2 inches over the next few days will hit S MN, WI and N. IL. But areas to the West remain dry. For the 6 to 10 day forecast, the weather models diverge quite widely in their outlook. The GFS model shows more cooling in the cards, but the European models, which some meteorologists are favoring right now, points to extensive heat in the WCB. The 11 to 15 day forecast indicates warmth returning or maintaining into early August, posing risk to yield and production. The focus at that point will be shifting towards soybeans, where lack of precipitation and additional heat could continue depleting soil moisture in some areas, and risk the crop during the pod fill stage.

French farmers had harvested 63 percent of this year's soft wheat crop by July 17, up from 29 percent a week earlier, data from farm office FranceAgriMer showed on Friday. Crop conditions were stable with 66 percent of soft wheat was rated good/excellent.

 

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July 20, 2017 | Kevin McNew | Views: 156
July 20, 2017 | Grain Hedge Insights | Kevin McNew | Views: 503

Export Sales for the Week were All on the High Side of Expectations

Corn and Beans Modestly Higher in the Overnight Session

Corn and beans were modestly higher overnight with wheat trying pare losses going into the morning break.

 

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The weather continues to point to areas of stress in the coming weeks. Although dry parts of SD and E IA are a concern, there is a modest rain event the remainder of this week, but it will not likely be enough to seriously bolster soil moisture in the driest areas. For next week, there is a brief period of cooling expected in the Plains and WCB before heat returns as the major theme in the forecast thru the first week in August.

 

In Brazil, two consecutive days of frost in Paraná have damaged wheat crops in the western area of the Brazilian state, the government's rural economics agency Deral said on Wednesday.

Export sales for the week were all on the high side of expectations with soybeans showing solid new-crop business on a big purchase by China.

 

Weekly Export Sales-

 

 

Actual

Estimated

Wheat - NC

669

250-450

Corn - OC

466

150-350

Corn - NC

212

200-400

Soybeans - OC

410

100-300

Soybeans - NC

1,522

1300-1800


 

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July 19, 2017 | Grain Hedge Insights | Kevin McNew | Views: 346

10 Day Outlook Shows High Temps for US Central Plains

US Dollar Index Hovered around 10 Month Lows

Corn and beans posted modest gains overnight, while wheat drifted fractionally lower.

 

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The next 10 days look to be hot for the US Central Plains as high temps in NE/KS/SD will consistently be in the upper 90s and low 100s. For IA, it will be on the fringe of the heatwave with Western reaches of the state seeing upper 90s, while the Eastern part of the state will hover below 90 for the 10-day period. Rainfall is also expected to be limited in these areas with only 1 to 1.5 inches expected over the next two weeks.

 

Egypt’s GASC bought 200,000 MT of wheat with the deal going to Russia, Romania and French suppliers. The Taiwan Flour Millers Association bought 105,000 MT of milling wheat from the US. In Russia, wheat harvest continues to move along with yields reportedly higher than last year.

The US Dollar index hovered around 10-month lows. The dollar has come under pressure as Republican legislators' failure to pass a stalled healthcare bill raised fears for the rest of President Donald's Trump reform agenda.

 

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, 2017 | Kevin McNew | Views: 306
July 18, 2017 | Grain Hedge Insights | Kevin McNew | Views: 199

NOPA Crush Numbers were Disappointing for month of June

Grains Posted Double-Digit Gains in the Overnight

Grains posted double-digit gains in the overnight thanks to renewed fears about the crop conditions.

 

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After the close on Monday, USDA reported corn conditions were 1% to 64% good-to-excellent. There were noticeable declines in Iowa, North Dakota
and South Dakota which were 6 to 7% lower, while Kentucky, Nebraska, North Carolina, Kansas and Wisconsin were each down 2 to 3%. Corn is silking is at 40% vs 53% this time last year. Bean conditions were off 1% to 61% G&E, and like corn, going through the state by state there was a lot of variability. North Dakota was off 7%; Iowa, Kansas, North Carolina and South Dakota were each off 4 to 5% and Nebraska, Ohio and Wisconsin were each off 3%.
 

Yesterday, NOPA crush numbers were disappointing for the month of June with soybean crush at 138 versus 143 expected. YTD NOPA crush for the 2016 marketing year is on par with the 2015 mark, but USDA expects a 0.7% higher crush in their 2016/17 marketing year projections. With two months left in the year we will need to see a ramp-up in production to meet the forecast as the last 3-months have averaged 4.2% below last year’s mark.

Overnight rainfall was observed in E SD, parts of NE and MN. Highs in the 100s were confined to central SD. The next 4 days should see 100 degree temps in NE, KS, SD  but much of the WCB will only see mid-90s.  Precip in the next 14 days is expected to total less than inch of rain in NE, SD, ND and IA.

 

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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