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April 18, 2016 | Grain Hedge Insights | Kevin McNew | Views: 239
April 18, 2016 | Grain Hedge Insights | Kevin McNew | Views: 256

Soybeans Rose for a Sixth out of Seven Sessions

In outside markets, Oil was off sharply

Grains were mixed overnight with soybeans advancing to fresh 8-month highs and wheat also posted positive gains. Corn was flat in early trade. In outside markets, oil was off sharply but recovered from early losses of over a $2 a barrel slide on Sunday following the failed oil minister meeting in Doha.

 

Soybeans rose for a sixth session out of seven, with heavy rains in Argentina raising fears of crop damage. Also, current Brazil President Rousseff suffered a humiliating loss in a crucial impeachment vote in the lower house of Congress on Sunday and is almost certain to be forced from office, which could add more strength to the Brazilian Real. In Argentina, Rosario grains exchange left its soy crop forecast unchanged at 59 million tonnes, saying it would take time to gauge the damage from rains. Rain in Argentina was somewhat restricted during the Friday into Sunday morning period with some welcome drying noted. Rain fell from La Pampa and Buenos Aires to southern Santa Fe and southern Entre Rios. Amounts varied from 0.05 to 0.75 inch most often, although as much as 1.69 inches occurred in southeastern Entre Rios. Rain will move through central and northeastern Argentina today and Monday with some of it heavy from Uruguay and Entre Rios to northeastern Santa Fe and Corrientes. The rain event will become confined to Corrientes, northeastern Santa Fe and eastern Chaco during mid-week this week and showers may linger in the region daily through the weekend.

 

Rainy weather occurred as expected across nearly all of the U.S. hard red winter wheat country. A few counties in the Texas Panhandle did not receive much precipitation. In contrast, rain totals in portions of southern Nebraska, northern to south-central Kansas and areas in central and southwestern Oklahoma to north-central Texas reported 2.00 to more than 5.00 inches.

 

Oil prices pared some of the over 5 percent losses seen in early trade, after the world's largest oil-producing countries failed to strike a deal to freeze output. Some 18 oil-exporting nations, including OPEC members, had gathered in Doha, the capital of Qatar, over the weekend in an attempt to agree to stabilize output at January levels until October 2016. The pact fell apart after Saudi Arabia demanded that Iran join in.

 

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

April 13, 2016 | Grain Hedge Insights | Kevin McNew | Views: 362
April 13, 2016 | Grain Hedge Insights | Kevin McNew | Views: 362

Grains Continue Their Gravity Defying Moves

US Dollar and Equity Futures are firmly higher to start the day.

Grains were higher in the night-session with soybeans continuing their gravity-defying move to new heights. In outside markets, crude oil was lower while the US dollar and equity futures were firmly higher to start the day.

 

Yesterday’s USDA report provided little new fundamental guidance with USDA lowering US soybean carryout slightly and moving corn carry out higher. Soybeans initially sold off after the report but recovered sharply by the close of trade yesterday, and added to the gains overnight. New-crop Nov soybeans got close to $9.60 a bushel overnight before breaking lower.

 

In South America, Argentine rains (.50 to 1.5”, locally 2.5”) fell across much of the belt in the past 24 hours, with heavier amounts confined to the northern fringes of the belt. Another extensive rain event this weekend will keep harvest progress very slow, with any recovery not likely until a drier pattern sets in during the 11 to 15 day. Heavy rains are limited to the northeast 1/4 of the belt, where localized flooding is possible.  This has helped fuel the soybean rally has the continued strength in the Brazilian Real, although the US dollar is sharply higher this morning bouncing off of recent lows.

 

Grain Hedge Technical Alerts call for a move to May Soybeans of $9.53. Click here to get a 14-day trial of Technical Alerts 

 

In crude oil, API data released yesterday took some of the steam out of the crude market, as the private forecasting group pegged crude stocks up 6.2 million barrel while analysts on average expected only a 1 million barrel build. Crude had also been higher yesterday because of a rumored deal between Saudi Arabia and Russia reached a deal to freeze output ahead of the formal meeting in Quatar this weekend. The deal was supposedly not tied to Iran’s actions of joining the group on freezing output. Today at 9:30 am CDT EIA will release official inventory data, with analysts looking for a 1.85 million barrel build.

 

Grain Hedge Technical Alerts call for a move to May Crude Oil of $40.32. Click here to get a 14-day trial of Technical Alerts

 

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

April 12, 2016 | Grain Hedge Insights | Kevin McNew | Views: 341
April 12, 2016 | Grain Hedge Insights | Kevin McNew | Views: 294

Grains Higher in the Night Session

Crude Oil continues to Show Positive Gains

Grains were higher in the night session with soybeans continuing to take on new highs for this 6-week rally. In outside markets, crude oil continued to show positive gains getting closer to $41 a barrel, with equity futures also moving higher as well.

 

Grain markets will look towards today’s USDA supply and demand report. Most analysts expect incremental changes in ending stocks with old-crop wheat and corn stocks are expected to move higher on weaker exports while soybeans are expected to move lower.

 

On Monday, USDA reported a drop in the US winter wheat condition to 56% versus 59% last week. Corn plantings were pegged at 4% for the first report of the year. This is on par with the 5-year average but faster than last year when 1% of the crop was planted.

 

In international news, Egypt’s GASC tendered for wheat with the lowest offers coming from Ukraine, France & Romania. Japan's Ministry of Agriculture is seeking to buy 127,620 MT of food quality wheat from the United States, Canada and Australia in a regular tender that will close late on Thursday.

 

Crude oil continues to trade above $40 a barrel for the first time since March. Weakness in the US dollar is helping support crude oil prices as is the recent drawdown in crude inventories. A meeting of major oil producers in Doha on April 17 to discuss a freeze in oil output also is being followed closely since it could stabilize prices.

 

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

April 11, 2016 | Grain Hedge Insights | Kevin McNew | Views: 339
April 11, 2016 | Grain Hedge Insights | Kevin McNew | Views: 297

Grains Sharply Divided in the Overnight

Oil Prices Slipped on Monday

Grains were sharply divided overnight with wheat seeing big losses while soybeans rallied as much as 7 cents before backing off into the break. Corn was weaker as well in the night trade.

 

Soybeans got a lift from a bullish palm oil report Sunday night. Malaysia's palm oil stocks at the end of March fell 13.1% to 1.89 MMT from 2.17 MMT. Exports rose 22.9% to 1.33 MMT tonnes in March. Participants in a Reuters poll expected stockpiles to fall 10.3%t to 1.95 MMT, and exports to rise 12.4% to 1.22 MMT.

 

Wheat came under pressure hitting lows established in early March as forecasts for widespread rains across the U.S. Plains over the weekend eased worries about yield losses. Long-term weather forecasts call for rains in the U.S. Plains. This pattern seems to have strengthened and now heavy rainfall is expected over Saturday and Sunday. Russia's wheat export prices are expected to fall 4% from current levels when the new crop is delivered to the market, IKAR, one of the leading Moscow-based agriculture consultancies, said on Monday. Prices for the new wheat crop with 12.5 percent protein content and for August delivery are quoted by market participants at $176.5 per tonne on a free-on-board (FOB) basis in the Black Sea now, Dmitry Rylko, the head of IKAR, said. The current spot prices are $183 per tonne, he added.

 

Oil prices slipped on Monday after banks dampened hopes that the result of next Sunday's meeting of producers in Qatar aimed at freezing current output levels would improve the current supply-demand balance. Analysts at Goldman Sachs, who expect oil prices to average $35 a barrel in the second quarter, cautioned the outcome of the meeting may end up being bearish for the market. "A production freeze at recent production levels would not accelerate the rebalancing of the oil market as OPEC (excluding Iran) and Russian production levels have this year remained close to our 2016 average annual forecast of 40.5 million bpd," the analysts said.

 

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

April 08, 2016 | Grain Hedge Insights | Kevin McNew | Views: 287

Weekly Cash Comments

Weekly Cash Commentary for week ending 4/08/2016

Grain basis was slightly firmer on the week, but still showing no real movement to the upside. For the week, US average corn basis was up 0.5 cents a bushel, and soybeans up only 0.25 cents a bushel.

 

A late week rally in beans got some uptick in country movement but buyers are keeping basis levels fairly steady with more supplies as planting season will bring a temporary halt to farmer selling. For corn basis, river terminals found some modest strength this week as basis at the Gulf moved 4 cents higher on a recent uptick in export activity. For soybeans, basis was 1-cent higher at the Gulf, which helped lift river terminal basis on the week.

 

End users of corn for ethanol were modestly higher as a group, although there were some notable bids that were up 5 to 10 cents on the week. For soybean plants, basis levels were up 0.5 cents on average with most facilities keeping basis unchanged for the week.  

 

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

April 08, 2016 | Grain Hedge Insights | Kevin McNew | Views: 391

Crude Races Higher in the Overnight

Grains Find Modest Strength in the Overnight

Grains found some modest strength overnight with wheat leading the advances after the sharp sell-off in the past week. In outside markets, crude oil raced higher overnight nearly posting a $2 a barrel advance while US stock futures were higher as well.

 

Wheat found some buying interest overnight with South Korea's Daehan Flour Mill buying 55,700 MT of wheat to be sourced from the United States, and Japan's Ministry of Agriculture bought 137,486 MT of food quality wheat from the United States, Canada and Australia in a regular tender that closed late on Friday.

 

The Plains will see scattered showers occur at the start of next week near the Kansas/Oklahoma border and into parts of Texas/Oklahoma, with rains also likely later in the 6 to 10 day across the western Plains. While the outlook is drier as a whole compared to yesterday for the next two weeks in the Plains, many of the driest western areas may still see some improvement. Central Kansas is probably the most at risk to be short-changed based on the current model runs, although confidence remains low due to the continued inconsistency in the model guidance.

 

Corn has found some buying interest of late with modest gains in cash basis and traders expecting a lower corn number than USDA put out in March. However, the risk for bigger carryout still exists. As U of Illinois economist Darrel Good states “Planted acreage of 93.6 million acres, harvested acreage of 86 million acres, and an average yield near the USDA's calculated trend of 168 bushels would result in a crop of 14.448 billion bushels and 2016-17 marketing year ending stocks near 2.4 billion bushels."

 

Oil prices rose as much as 5 percent on Friday, lifted by fresh hopes over a proposed freeze in oil production and firm economic indicators from the United States and Germany that cast a positive light on growth in fuel demand. Russia's oil production could fall in April, sources said, while the country's energy minister expressed hopes that producer nations could agree to an output freeze at a meeting in Doha later this month. Bank of America Merrill Lynch said in a note that U.S. shale production was in "freefall" and that "as the global oil glut starts to clear, crude oil should lead the way". Still, some warned that oil prices could fall again, dragged down by a glut that will take time to clear and soaring production outside the United States, especially in parts of the Middle East.

 

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

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