February 22, 2018 | Grain Hedge Insights | Kevin McNew | Views: 983

Argentina Corn and Soybean Yields Down Heavily

Grains Trade Lower in the Overnight Session

In the overnight session the grains traded slightly lower with March corn down ½ a cent to 3.65 1/4, March soybeans down 3 1/4 cents, March wheat down 3/4 of cent and Kansas City Wheat down 1 1/2 cents. Due to the holiday shortened week the USDA will release export sales on Friday.

 

Exporters Sell 130,000 metric tons of Corn for delivery to unknown destinations during the 2017/2018 marketing year. -USDA

Exporters Sell 110,000 metric tons of Soybeans for delivery to unknown destinations of which 55,000 MT is for 2017/2018 delivery and 55,000 MT is for 2018/2019 delivery. -USDA

 

On Wednesday, the Rosario Exchange lowered its corn and soybean production forecast for the current growing season. Argentina soybean production was lowered to 46.5 million metric tons from 52 million metric tons (WASDE @ 54 MMT). Argentina corn production was revised to 35 million metric tons from 40 million metric tons in its previous forecast (WASDE @39 MMT). The latest forecast in Argentina is for net drying to persist in Argentina until Tuesday at which time there is a likely chance for precipitation. However, the confidence that the precipitation event will provide widespread meaningful rain is low.

 

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More rain fell last night in Northern and Eastern Texas with as much as 1 to 2 inches accumulated. Any significant rain missed Oklahoma and Kansas over the last 18 hours. Temperatures this morning were in the low to mid 20’s across much of Kansas, Oklahoma and the Texas Panhandle.

Russian Grain Consultancy IKAR announced today that it has increased its forecast for Russian 17/18 grain exports to 48.6 million metric tons, up from 47.7 MMT. The company also increased its wheat export estimate to 37.5 MMT from 36.6 MMT in its previous forecast.  

 

The FOMC minutes released yesterday indicated to traders that more rate hikes are on the table. Although three rate hikes this year is fully priced into the market, the comments by the committee that “a gradual upward trajectory of the federal funds rate would be appropriate” could suggest that a fourth rate hike is not off the table.

 

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

February 21, 2018 | Coach’s Corner | Greg Martinelli | Views: 1871

The Lost Art of Follow Up

Agribusiness sales are long-term relationships, putting in the work is key

The Lost Art of Follow Up

Imagine you are a buyer of products.  Products like the one’s you sell.  You have been buying from Company ABC for the last 15 years.  ABC has been great to work with.  They provide you with quality products, help you out when there are emergencies in your business, and give you fair pricing.  Chuck, the ABC salesman has been your sales rep the whole time.  At times, ABC has had a few problems as any company does.  But, the relationship between your business and ABC is fairly good.

It’s Wednesday morning and as that buyer, you are busy reviewing spreadsheets when in walks Jody.  Jody is new in the market and sells for XYZ.  You know XYZ and even bought a few products from them over the years.  However, they never were able to meet the quality of ABC, they weren’t able to hold onto their sales people and you avoided them when they called on you.

If Jody wants to have a chance of selling this buyer, she has to understand this situation and understand it from that buyer’s point of view.  No matter the price or monthly special offers, that buyer does not consider Jody nor XYZ a credible vendor. 

Agribusiness sales are typically long-term relationships that revolve around a high level of trust.  To build that trust with the buyer, Jody is going to have to put in the time. And time means multiple sales calls.  Jody will have to work on the relationship first and then on the products she has to offer.  Her challenge is that the buyer will rarely reveal the relationship issues first.  He will focus on the products and pricing.  Jody will need to dig in with good questions to get the relationship going.

 

Key Points

  1. Why is Following Up called a Lost Art

It’s lost because few people talk about it.  Even sales training programs spend very little time on it.  They typically get to the end of day two in training and say, “We’re out of time and won’t cover the next section.  So, Follow Up on what you promised during the sales call”.  Leaving the student with no idea of how to actually get a follow up appointment.  It’s an Art because, as the sales person, you have to find a reason to come back for the next appointment.  And that reason is discovered during the current sales call, at full speed while you are conducting a sales call. 

 

  1. Why is it the most important step in the sales process?

Normally, any prospect will give you the first sales call.  But, rarely does a prospect buy on the first call.  It’s sales call #3,4,5….25, 26 and beyond that become increasingly difficult to get.  Why?  Because you need to find a relevant reason to come back. 

  1. Dig Deep to Uncover Opportunities!
    • Ask a lot of questions, question a lot of the answers, take a tour, walk the fields, walk the cows, ask “why” a lot of times. 
    • Take great notes so you don’t forget.
    • Learn more than you are taught:  After you get home from the appointment, go to that great research institution called Google and start learning about what you discovered on your sales call.  Find relevant information, especially about any problem areas the buyer discussed.  If you are lucky enough to have a research department, reach out to them and discuss what you learned on the sales call.  Same goes for other departments in your company: manufacturing, distribution, customer service and yes, even accounting.
  2. How long and how often do I keep going back?
    • We’ve all seen the different posts that say it takes 5 calls to sell an account and that 40, 50, 80% of sales people never make 2nd, 3rd, or 4th sales calls.  There are different versions out there, but the point is – few people have the persistence to keep going back.  Be one of those few!
    • My opinion is that you keep going back if you have relevant reasons to go back. 
    • Secondly, you honor their timelines.  If they tell you to not come back for 4 months, then that’s what you do.

 

As you head out into your territory and start calling on buyers or farmers, keep their perspective in mind as you ask them to buy your products.  It takes time, persistence, relevance and a combination of art and skill to keep following up until they become your customer.  Once trust is established, the sale will follow.

February 21, 2018 | Grain Hedge Insights | Kevin McNew | Views: 580

Wheat Hits Two Week Low

Grains Trade Mixed in the Overnight Session

In the overnight session the grains are mixed with corn up 1 1/2 cents, March soybeans down 1 cent, March Chicago wheat down 3/4 of a cent and March Kansas City Wheat down 3 1/4 cents. Traders are focused on recent rains in some US HRW growing regions and continued drought in Argentina.

 

The eastern half of Oklahoma and Northern Texas received precipitation over the last day providing some much needed moisture to some regions of the winter wheat crop. Kansas has only received precipitation in the very southeast corner of the state. The 6-10 day forecast and 8-14 day forecast both show better than normal probability for precipitation in the eastern half of Kansas, Oklahoma and Texas.  

 

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The latest weather models show little change in the forecast for Argentina. Models show dryness throughout this week with the possibility of some rain next week but confidence in the event remains low.  

Export inspections were within expectations yesterday for corn, soybeans and wheat. Total corn inspected for export for last week was 938,099 metric tons. Soybean inspections totaled to 960,066 metric tons and wheat totaled to 422,298 metric tons.  

 

The FOMC minutes from the January meeting will be released today and will be the focus of many traders. Traders are watching for any indication of faster than expected rate increases. The market is currently anticipating three rate increases this year but the FOMC release could indicate a possible fourth.    

 

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

February 20, 2018 | Grain Hedge Insights | Kevin McNew | Views: 704

Chicago Soybean Futures at a Seven Month High

Grains Trade Higher in the Overnight Session

In the overnight session the grains traded higher with March corn up 1 3/4 cents, March soybeans up 15 cents, March Chicago Wheat up 4 cents and Kansas City wheat trading up 3 3/4 cents this morning. The market is continuing its move higher on dryness in Argentina and excessive rains in Brazil.

 

Rains over the weekend were less than expected in Argentina with only 25 percent of the corn and soybean growing regions receiving measurable precipitation. Buenos Aires received 1 to 2 inches and some lighter rains also occurred far to the north. It is estimated that 65 percent of the crop is experiencing moisture stress and that area is only expected to grow by the end of the week. Temperatures are supposed to climb into the lower 90’s by the end of the week and the forecast shows the best chance for rains for the middle of next week.


 

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The Brazilian Agricultural Consultancy Ag Rural reported that soybean harvest in Brazil is 17 percent complete compared to 26 percent during the same period last year. Mato Grosso soybean harvest is ahead of last year while Parana is well behind last year’s pace.

 

Rains missed the majority of Kansas this weekend with only some parts of Southeast Kansas receiving moisture. Oklahoma received between around a half an inch with the best accumulation in the northwest part of the state.  Temperatures are expected to be cold in the Northern Plains down into Nebraska and Kansas until the end of the week. Kansas snow cover is thin to gone with temperatures forecast below freezing until Thursday.

The national average spot corn basis increased last week by .4 cents while soybean basis slipped by .9 cents. River markets lowered their soybean basis by an average of 4 cents a bushel while crush facilities backed off 2.3 cents. Ethanol facilities were unchanged on the week and corn basis at the river was off an average of .8 cents.
 

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

February 16, 2018 | Grain Hedge Insights | Kevin McNew | Views: 366

Corn and Soy Steady Up this Morning

Grains Traded Lower in the Overnight Session

In the overnight session the grains traded lower with corn down ¼ to ¾ of a cent, Soybeans are down between ¼ to 1 cent, Chicago wheat is down 3 ¾ cents with Kansas City wheat down 3 ½ cents.

 

US soybean futures edge higher on Friday and are poised for its biggest weekly gain in seven months as dry weather threatens production of the oilseed in Argentina. Corn edged higher, while wheat firmed nearly 0.5 percent to be on course for a weekly gain of more than 3 percent.

 

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The Buenos Aires Grains Exchange announced that 58 percent of its corn crop and 56 percent of its soybean crop has been damaged by the drought. The exchange’s forecast for soybean harvest this season is at 50 million metric tons of soybeans (USDA @ 54 MMT) and 39 million metric tons of corn (in line with USDA). The Argentina weather forecast has not changed much this morning. Erratic showers and thunderstorms are expected today throughout the weekend leaving some areas with meaningful precipitation and other areas dry and under continued crop stress. Brazil weather continues to be favorable to crop development with some dryness in Rio Grande do Sul.

Brazil’s Agricultural minister reported today that Brazil’s crop this year could surpass last years record. Blairo Maggie said “There were no losses whatsoever. The planting of the second corn crop was delayed slightly but everything is going normally. I think there will be a repeat of last seasons super crop.” The latest USDA projection of Brazil’s 2017/18 corn crop estimates a 95 million metric ton harvest which compares to the 98.50 MMT produced last year. The USDA has 2017/18 soybean production projected at 112 million metric tons compared to 114.10 MMT last year.

 

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

February 15, 2018 | Grain Hedge Insights | Kevin McNew | Views: 774

Bigger Number than Expected in Corn Export Sales This Morning

Grains Mostly Positive in the Overnight Session

In the overnight session the grains were mostly positive with March corn up 3/4 of a cent, March soybeans up 1 cent, March Chicago wheat up 1 3/4 cents and Kansas City wheat up 4 1/4 cents.   

 

Ethanol production dropped this week to 1.016 million barrels per day from 1.057 mbpd the previous week. The decline in this weeks ethanol production was a surprise since ethanol margins have been relatively stable as of late. This weeks drop in production marks the fourth week since mid-December that weekly production fell below year ago levels. Ethanol stocks declined this week to 961 million gallons from 987 million gallons the previous week. Ethanol stocks are still very strong and are the second largest on record for this week of the year.

 

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Strategie Grains, an agricultural consultancy, reduced their forecast for European Union soft wheat exports to 21.4 million metric tons from 21.7 million metric tons last month. The reduction was made because wheat from the Black Sea region and Argentina are more competitive on the global market.   

Export sales this week beat expectations for corn and were on the high side of trade expectations for wheat and soybeans. Wheat sales were down 21 percent this week booking 311,100 metric tons. Soybean sales were within the range of expectations but were down four percent from the previous week. Corn sales were up 12 percent from last week and 14 percent above the four week average with 1,974,500 metric tons sold this week.  

 

Weekly Export Sales-

 

Actual

Estimated

Wheat

311

200-450

Corn

1,974

1,000-1,500

Soybeans

650

450-750


 

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

February 14, 2018 | Grain Hedge Insights | Kevin McNew | Views: 495

The Wheat Rally Stalls, Corn and Soy also Suffer

Grains Trade Lower in the Overnight Session

In the overnight session the grains traded lower with corn down 1 ½ cents, soybeans down 2 ½ cents, wheat down 4 ½ cents and Kansas City wheat down 3 ¾ cents. After a few days of positive price gains the market is taking a breather with selling across the grain complex.

 

The latest weather report shows that the southern plains is expected to stay dry over the next couple weeks, but excessive moisture is expected in the central and northern Delta. Argentina will continue to struggle through hot dry weather until this weekend when spotty showers are expected to pop up throughout the country. Brazil weather will continue to be positive for crop development but rain next week will cause some delays to harvest in the south central and west central parts of the growing region.  

 

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The National Oilseed Processors Association (NOPA) crush numbers are due out on Thursday and will show the number of bushels crushed by the 13 member companies for the month of January. A Reuters poll of 8 analysts estimates the report will show 165.51 million bushels were crushed. If realized this would be the second largest crush on record. Analysts are expecting oil stocks to be 1.603 billion pounds.

The latest report from France’s Ag Ministry revised its wheat output lower for the third time this year. SRW wheat production was estimated at 36.6 million metric tons down from 37 million metric tons forecast by the organization in December. The revision was due to smaller harvested area.   


 

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

February 13, 2018 | Grain Hedge Insights | Kevin McNew | Views: 225

Export Inspections Were Within Expectations

Grains Trade Mixed in the Overnight Session

In the overnight session the grains traded mostly mixed with March corn down ¼ of a penny, March soybeans up 3 ½ cents, Chicago wheat down ½ a cent and Kansas City wheat down 1 ¼ cents.

 

The most recent weather model keeps the forecast unchanged in Argentina where hot dry weather has the corn and soybean crop under significant stress. Late this week and into the weekend there are chances of thunderstorm activity which is expected to be spotty and not widespread. Some showers may develop in the southern growing regions and move north between February 19th-21st. The weather model then suggests drier weather for the remainder of the month with chances of erratic showers.

 

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The wheat market pulled back slightly in the overnight after a sharp gain in yesterdays trade. Weather in the Southern Plains is expected to stay dry over the next couple weeks which provides support to the market. The latest drought monitor shows the Texas Panhandle, western Oklahoma and southwestern Kansas in extreme drought. Although crop conditions now are not entirely correlated of the final production, moisture will be needed as we move toward Spring.

Export inspections were within expectations or better for corn, soybeans and wheat. Corn inspections however, were on the low end of the range with 835,131 metric tons compared to expectations which ranged from 800,000 to 1,100,000 metric tons. Soybeans export inspections beat the range of estimates with 1,319,038 metric tons inspected for export. Soybean inspection estimates ranged from 800,000-1,100,000 metric tons.  

 

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

February 08, 2018 | Grain Hedge Insights | Kevin McNew | Views: 716

Strong Weekly Export Sales

Grains Trading Higher in the Overnight Session

In the overnight session the grains are trading higher again with March corn up ½ a cent, March soybeans up 2 ½ cents, March Chicago wheat down 2 ¾ cents and Kansas City wheat down 2 cents this morning. The February WASDE report will be released at 11 AM CST today.

 

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Ethanol production increased this week by 311 million gallons a week to 1.057 million barrels/day. This weeks EIA report shows this week’s production is on par with last year during the same week. Over the last six weeks, ethanol production has run 1 percent behind last years pace. Ethanol stocks increased last week to 987 million gallons from 968 million gallons. Seasonally, it is typical to see stocks continue to grow until March as the summer driving season begins to utilize more ethanol. Ethanol stocks are currently the third highest of all time.

 

On Thursday the Brazilian government lowered their forecast for 2017/18 corn production to 88 million metric tons from 92.34 million metric tons in their January forecast. The reduction is a result of growing conditions in the southern part of the country and a reduction in planted acres for the second corn crop. Conab increased its soybean production estimate to 111.55 million metric tons from 110.4 million in their January report.   

 

 

Export sales were strong this week with all three grains meeting expectations on the strong side of the range. Wheat export sales were up 36 percent from the previous week booking 393,400 metric tons. Corn sales were down 4 percent from last week but managed to book 1,769,600 metric tons which was well above the four week average. Today the Agricultural Ministry of China increased their 17/18 forecast for corn imports by 300,000 metric tons to 1.5 million metric tons. The revision in China’s forecast is a result of Beijing’s probe into alleged sorghum dumping by the United States.   Soybean sales were up strongly from last week with 743,200 metric tons sold.

 

Weekly Export Sales-

 

 

Actual

Expectations

Wheat

393

200-500

Corn

1,769

1,300-1,800

Soybeans

743

400-700

 

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

February 07, 2018 | Grain Hedge Insights | Kevin McNew | Views: 618

Southern Plains Dryness Continues Next Two Weeks

Grains Were Mixed in the Overnight Session

In the overnight session the grains were mixed with March corn up 1 cent, March soybeans down ¼ of a cent, March wheat up 5 ¼ cents and Kansas City wheat up 4 ½ cents. Temperatures are cold throughout Kansas and Oklahoma and the Texas Panhandle with temperatures at 5 a.m. ranging from 5 to 23 degrees Fahrenheit throughout the two wheat growing states. The forecast for the Southern Plains shows continued dryness over the next couple weeks.   

 

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The corn spreads between March and the deferred months have tightened since the start of the rally with the H8/N8 spread moving to $-.145 from $-.17 just two weeks ago. The spread has not seen this level since October 18th, 2017.

 

On Thursday at 11 AM CST the USDA will release its February Crop Production and WASDE report. In a Reuters survey of analysts the average trade estimate for corn ending stocks is 2.468 billion bushels compared to the January report of 2.477 billion. The average estimate for soybean ending stocks is 486 million bushels compared to January’s number of 470 million bushels. Wheat stocks are expected to be at 990 million compared to 989 million bushels in the January WASDE report.

The trade is expecting South American production to be revised lower in Argentina but higher for Brazil soybean production. The average trade guess is looking for Argentina corn production to be revised down to 40.68 MMT from 42 MMT in January due to the crop stress caused by hot dry conditions throughout critical growing regions. Argentina’s soybean production is also expected to be revised lower to 54.06 MMT from 56 MMT in January. The average analyst estimate for Brazil corn production is 93.73 MMT compared to 95 MMT in the January WASDE, but Brazil soybean production is expected to be revised higher to 111.20 MMT compared to 110 MMT in the January WASDE.

 

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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