December 12, 2016 | Grain Hedge Insights | Kevin McNew | Views: 485
December 12, 2016 | Grain Hedge Insights | Kevin McNew | Views: 187

Grains Start Sunday Night in Positive Territory

Equity Futures were Mixed

Grains started Sunday night in positive territory but reversed lower overnight. Crude oil got a shot from expected further cuts in oil, while equity futures were mixed and the US dollar was lower.

 

USDA announced the sale of 256,000 MT of soybeans to China and 100,000 MT of milo to China.

 

Argentina did not see much rain over the weekend but C Brazil rains improved moisture in drier corn/soy areas. The 6 to 10 forecast shows big rain potential. In the near-term temps are rising and about a third of grain growing areas are dry.

 

Friday’s crop report was neutral to negative, but on the world front global supplies and stockpiles continued to balloon with big jumps in wheat and corn carryouts. USDA still has a big estimate for US corn feed use, with USDA expecting a 10% increase in corn for feed, but across the board US livestock production shows only modest 2 to 4% growth in production figures in 2017.

 

Saudi Arabia's main state grain importer, the Saudi Grains Organization (SAGO), said on Monday it has bought 725,000 tonnes of hard wheat.
A tender closed on Friday for 715,000 tonnes of wheat. Accepted origins were from the European Union, North and South America and Australia, at the seller's option. India is expected to bolster wheat imports after eliminating their import duty on Friday. Expectations are for an extra 2 MMT of imports from India, but in the big wheat picture that will have no lasting impact. USDA on Friday raised global wheat stocks by nearly 3 MMT to 252 MMT.  

Oil rose by as much as 6.5 percent on Monday to an 18-month high after OPEC and some of its rivals reached their first deal since 2001 to jointly reduce output to try to tackle global oversupply and boost prices. On Saturday, producers from outside OPEC, led by Russia, agreed to reduce output by 558,000 bpd, short of the target of 600,000 bpd but still the largest contribution by non-OPEC ever.

 

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

December 09, 2016 | Grain Hedge Insights | Kevin McNew | Views: 156

Weekly Cash Comments

Weekly Cash Commentary for week ending 12/09/2016

The cash markets showed mixed movements this week.

 

On average corn gained 2 1/2 cents, for a fifth consecutive week of gains. Ethanol plants saw positive movement as well up 2 1/4 cents per bushel. China is aiming to produce 4 million tonnes of ethanol by 2020, doubling output from the current level, even as it keeps tight control over the use of food grains, a government plan showed on Monday. Corn along the river was the leader to the upside this week up 5 1/4 cents. Corn exports were notably good this week coming in 400,000 MT above expectations at 1,495,000 MT.

                         

Soybeans were off 1/2 cent this week, continuing to fluctuate from week to week. Crush facilities were off as well losing an average of 1 1/2 cents per bushel. Beans along the river were the leader to the downside, off 1 3/4 cents. Although cash markets have dropped, foreign demand for soybeans remains strong and has provided some support to the bean market.

 

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December 09, 2016 | Grain Hedge Insights | Kevin McNew | Views: 249

USDA Report to be Released Later this Morning

In outside markets, Crude Oil and US Dollar are Higher

USDA Report to be Released Later this Morning

Corn and soybeans were holding on to modest gains going into the morning trade break while wheat drifted lower. Outside markets saw crude oil and the US dollar higher.

 

USDA announced the sale of 132,000 MT of soybeans to unknown destinations.

 

This morning at 11 am CDT, USDA will release their latest WASDE report which is expected to show only minor revisions. Traders look for a slight drop in soybean carry-out and minor bump higher in corn stocks.

 

Overnight, a group of Israeli private buyers bought corn and feed barley to be sourced from optional origins in a tender which closed on Thursday. The group had sought 95,000 tonnes of corn and 30,000 tonnes of barley.
Taiwan's maize industry procurement association MFIG purchased around 65,000 tonnes of corn expected to be sourced from the United States in an international tender which closed on Thursday.

 

Argentina saw some rains yesterday in about 15% of the Grain Belt, but the outlook for the next week shows limited rain potential. But, temperatures are likely to remain normal. The best chance for rain in Argentina is in the 11 to 15 day forecast. Meanwhile Brazil has nearly ideal growing conditions.

Oil futures firmed on Friday, consolidating gains ahead of a weekend meeting of major oil-producing countries for a deal to cut production. Traders and analysts are now awaiting the outcome of a meeting between OPEC members and oil producers from outside the cartel, including Russia. OPEC is hoping to get big producers outside the cartel to cut a further 600,000 barrels a day. Russia has indicated it will take on half that burden.

 

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

December 08, 2016 | Grain Hedge Insights | Kevin McNew | Views: 245
December 08, 2016 | Grain Hedge Insights | Kevin McNew | Views: 202

Soybeans Were Off Sharply in the Overnight

Crude Oil Drifts Higher

Soybeans Were Off Sharply in the Overnight

Soybeans were off sharply while wheat made a rare move into positive territory. Corn was mostly steady from Wednesday’s close. In outside markets, equity futures added to yesterday’s sharp gains while crude oil drifted higher.

 

USDA announced the sale of 332,000 MT of corn to South Korea and 136,000 MT of soybeans to unknown destinations.

 

Overnight, India’s parliament was scrapping the wheat import duty. Private importers have already purchased about 500,000 MT of wheat, largely from Australia, in the past month after the world's second-biggest producer of the grain cut the duty to 10 percent from 25 percent in September. In other wheat news, Saudi Arabia was tendering for 715,000 MT of hard wheat and Ethiopia was in the market for 70,000 MT.

Yesterday, rains were widespread over Mato Grossos in Brazil and are expected to expand across all but far south corn/soy areas next 5 days. The 6-10 day forecast shows more restrictive rains contract in the Northern half of Brazil but return to the south in 11-15 day. Thunderstorms popped up overnight benefiting N. Cordoba/N. Santa Fe in Argentina. Showers very limited next 10 days with better rains possible 11-15 day in NE 1/2 Arg.; dryness lingers Buenos Aires. Heat is likely to build across Arg. corn/soy late 6-10 day/early 11-15 day (90’s) adding to stress in drier C. 1/3 of belt.

 

Weekly Export Sales-

                                      Actual         Expected

Corn                               1,495         700-1,000

Soybeans                        1,461      1,000-1,300

Wheat                               503            300-500

 

Oil prices steadied around $50 a barrel on Thursday, close to the week's lows, on doubts proposed OPEC production cuts would be sufficient to balance the market, although a weaker dollar supported sentiment. EIA U.S. crude oil inventories dropped 2.4 million barrels in the week to Dec. 2, compared with analyst expectations for a draw of 1 million barrels.

 

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


 

December 07, 2016 | Grain Hedge Insights | Kevin McNew | Views: 158

Grains were Subdued in the Overnight

Crude Oil continues to sink

Grains were Subdued in the Overnight

Grains were subdued overnight as wheat and corn drifted slightly down and soybeans went into the morning break mostly unchanged. In outside markets, crude oil continued to sink following yesterday’s sharp sell-off and equity futures gave up some of yesterday’s robust gains.

 

USDA reported exporters sell 330,000 tonnes of US Soybeans to China including 66,000 tonnes for 2016/17 delivery and 264,000 tonnes for 2017/18. Also this morning, exporters sell 136,000 tonnes US Soybeans to unknown destinations for 2016/17 delivery.

 

Palm oil lost ground overnight in a corrective move, while China soybeans were up 17 cents overnight. China continues to see limited imports of DDGS from the US which is helping fuel the demand for soymeal in livestock feed rations.

A group of Israeli private buyers has issued international tenders to purchase 95,000 MT of corn, 30,000 MT of feed barley and 10,000 MT of sorghum, all of optional origins. USDA will release their Dec crop report on Friday with little changes expected to the balance sheet.

 

Weather in South America shows beneficial rains on the horizon in Brazil. But Argentina looks dry for the next 10 days. However, temperatures are expected to be seasonally mild but temps are expected to heat up late in this forecast period. In the 11 to 15 day outlook the latest model runs show more precip is likely.  The longer term forecast of 16 to 30 day shows wetter conditions for Argentina.

 

Oil prices slipped on Wednesday on doubts production cuts promised by OPEC and Russia would be deep enough to end a supply overhang that has weighed on markets for more than two years. This week’s API report showed the second consecutive week of crude inventory draws that exceeded expert predictions. The report estimates a 2.21 million barrel drop in inventories, as opposed to the 1.37 million barrel decline expected by analysts.


 

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

December 06, 2016 | Grain Hedge Insights | Kevin McNew | Views: 182
December 06, 2016 | Grain Hedge Insights | Kevin McNew | Views: 287

Soybeans Continue their Climb

Corn and Wheat remain lackluster

Soybeans Continue their Climb

Soybeans continued to climb higher overnight, besting yesterday’s bullish move; corn and wheat were lackluster.

 

This morning, Stats Canada came in with a higher than expected wheat production estimate. The trade looked for a 30.7 MMT but the agency pegged it at 31.7 MMT. For Canola, output in Canada was slightly below estimates coming in at 18.4 vs expectations of 18.8.

 

In weather, dryness is starting to emerge as a concern in Argentina but Brazil is continuing to see rain potential in the dry Central region. Argentina saw limited showers in the SE yesterday with minimal rains expected the next 10 days. In the 11-15 day forecast rains favor the East and North, but the drier southern regions are not expected to see much moisture.

 

Crude oil prices were lower on Tuesday for the first day since the Organization of Petroleum Countries agreed to limit their production last week. But on Monday, a Reuters survey found that OPEC's output hit a record high in November, indicating that member countries could have a hard time sticking to their plan.


 

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

December 05, 2016 | Grain Hedge Insights | Kevin McNew | Views: 204

Grains Firmer to Start the Week

Crude Oil Advances to Fresh Highs

Grains Firmer to Start the Week

Grains were firmer to start the week led by soybeans. Crude oil also advanced to fresh highs.

 

USDA announced a 426,000 MT sale of soybeans to China.

 

Rains were good over the weekend in SA, especially in Brazil easing dryness in Parana/Sao Paulo/N. Rio Grande do Sul. Argentina got only 15% coverage over the weekend with 5% coverage expected in the next week. The extended outlook for 16 to 30 day, Brazil looks fairly wet for much of the country but Argentina may see some dryness in the central and southern parts of the country.

 

Private consultant Abiove pegs Brazil’s soy crop at a record-large 101.3 MMT; however, that is below the 102 MMT forecast of USDA. In wheat, the Australian govt forecasted the wheat crop there at 32.6 MMT, a big jump from their Sep forecast of 28.2 and higher than the record large year of 2012 when they hit 29.6.

 

China is aiming to produce 4 million tonnes of ethanol by 2020, doubling output from the current level, even as it keeps tight control over the use of food grains to make the bio-fuel, a government plan showed on Monday.
The world's largest energy consumer plans to raise the non-fossil fuel portion of primary energy consumption to 15 percent from 12 percent by the end of its current five-year plan in 2020.

Crude prices were up on continued optimism about the OPEC output cut deal. However, one large uncertainty in the global supply balance is output from the US shale producers, who proved more resilient than expected to weak oil prices. U.S. energy firms extended their recovery in oil drilling into a seventh month last week,hitting 477 rigs. That’s up from the low set in May 2016 of 314.



 

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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