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April 27, 2017 | Grain Hedge Insights | Kevin McNew | Views: 71

Weekly Export Sales were Strong for Old Crop Corn and Beans

Heavy Rain Expected across MO and IL Over the Next Two Weeks

Grains were in positive territory to start the day trying to recover some of yesterday’s selloff. In outside markets, crude oil was down nearly a $1 a barrel making a run to the $48 a barrel mark.

 

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Yesterday saw selling midday after the White House hinted they were preparing an executive order to pull out of NAFTA. But then, late Wednesday night the White House softened its stance saying it wouldn’t kill NAFTA but instead work to renegotiate it. At risk is Mexico’s business which is the largest US buyer of corn and in the top 3 for US beef.

 

In US weather, heavy rain is still expected in MO/IL over the next two weeks. A storm system is moving across the Central and Eastern Plains the next two days and should bring upwards of 3 to 5 inches of rain in parts of OK/AR/MO before moving East.

 

Weekly export sales were strong for OC corn and beans and NC wheat. With active competition from South America it may be a sign that NC export deals will be harder to come by.

 

Export Sales-

 

  Actual

  Estimated

Wheat - OC

  61

  300-500

Wheat - NC

  305

  50-250

Corn - OC

  987

  700-900

Corn - NC

  11

  50-250

Soybeans-OC

  808

  250-450

Soybeans-NC

  72

  100-300

 

 

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

April 26, 2017 | Kevin McNew | Views: 142
April 26, 2017 | Grain Hedge Insights | Kevin McNew | Views: 89

Soybeans in the Red and Wheat in the Black in the Overnight

US Dollar was Higher

Grains were mixed overnight with soybeans in the red and wheat in the black. Corn was unchanged heading into the morning break. In outside markets the USD was higher after being beaten down early in the week.

 

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The weather continues to point to heavy rains thru the next week in the Plains and Western Cornbelt. Major corn growing regions in the West could receive a total of more than 4-7 inches of rain by May 10, well above average levels. Rain is also expected to fall on most days, giving wet fields little time to dry out before another round arrives.


In international news, Taiwan's feed industry procurement association, MFIG, purchased about 65,000 MT of corn likely to be sourced from Brazil in an international tender which closed on Wednesday. Tunisia's state grains agency purchased around 67,000 MT of soft milling wheat to be sourced from optional origins in an international tender which closed on Wednesday.

Ukraine boosted its grain exports to 4.54 MMT in March up 52% from 2.98 MMT in February thanks to record sales of maize, analyst UkrAgroConsult said on Wednesday. The corn shipments jumped to 3.1 MMT in March, the highest so far for the 2016/2017 marketing year that runs from July to June, from 1.8 MMT in February.

 

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

April 25, 2017 | Kevin McNew | Views: 55
April 18, 2017 | Grain Hedge Insights | Kevin McNew | Views: 202

US Dollar Index Continues Its Retreat

March NOPA Crush Figures Failed to Meet Expectations

Corn and wheat tried to reverse course overnight following Monday’s slide while soybeans moved lower. In outside markets, the US Dollar Index continued to retreat, falling below the psychological 100-mark .

 

On Monday, NOPA crush figure for March failed to meet expectations for the 2nd month in a row with 153 MB of soybeans processed for the month vs expectations that averaged 156. Year-to-date crushings for the seven months of the marketing year are up 1.8% from the same period last year, while USDA expects a 2.8% bump in annual crush in the balance sheet.

 

After the close on Monday, USDA’s crop progress report showed only 6% of the corn crop had been planted. Although up from last week’s reading of 3%, it was still below the 8% mark expected by analysts and 12% for the same week last year. For winter wheat, US crop conditions inched higher to 54% good-to-excellent, up from 53% last week but below 57% last year.  Of the winter wheat states, OK was notable in its decline in ratings to 43% from 45% last week.

In international news, Asia saw Palm Oil prices slide as did soy futures in China. Weakening hog margins in China combined with an increase in Chinese soy plantings for 2017 are likely weighing on prices. South Korea feed group MFG bought 137,000 MT of corn.

 

US weather forecasts point to rains over the next week but looking ahead into the 2nd week shows a dry pattern for much of the US Grain Belt. Two week precip totals favor the Southern Cornbelt, the Plains and parts of IA/MN. Precip is expected to be limited in IN/OH.
 

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

April 17, 2017 | Kevin McNew | Views: 185
April 12, 2017 | Grain Hedge Insights | Kevin McNew | Views: 172

Soybeans Hold on to Strong Gains

Yesterday's Crop Report confirmed the big crops in South America

Soybeans held strong gains, countering yesterday’s bearish crop report while corn and wheat were holding steady in limited trade. In outside markets, crude oil continued to add to its gains over the last two weeks pushing into the mid-$53 area while equities and the US dollar were weaker to start the day.

 

Yesterday’s crop report confirmed the big crops in South America. Brazil’s soy crop was pegged at 111 MMT, up from USDA’s March forecast of 108 and above industry acreage expectations of 109.9. Likewise, Brazil’s corn crop came in at 93.5, above expectations of 92.4 and 91.5, previously. In Argentina, USDA also was slightly above expectations with corn at 38.5 vs a trade estimate of 37.8 and soybeans at 56 vs expectations of 55.9.

 

Soybeans sold off initially after the report but spiked on it’s low of $9.41 basis for July. This should act as support in the near-term. Indicators are turning more positive after being oversold for some time, giving the market a short-covering temperament.  To the upside, it will take a move into the $9.70 to $9.80 to likely push more shorts out. A resumption of the downtrend will take breaking through the $9.40 mark and eventually making a slide to $9. The fundamentals no-doubt support it.

In Europe, France and Germany are seeing above normal temps to help early season wheat development but conditions have turned dry of late which could spell problems if rain does not return. Weather patterns are expected to bring some light rains to Germany over the next two weeks, but hardly any precip is expected in France.

 

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

April 11, 2017 | Grain Hedge Insights | Kevin McNew | Views: 212

Grains Mixed Heading into the USDA Report

US Dollar and Equities in Negative Territory

Grains Mixed Heading into the USDA Report

Grains were mixed heading into the USDA report with soybeans holding on to a modest gain while corn and wheat sunk lower. In outside markets, crude oil dipped lower after hitting the $53 a barrel mark for the first time in a month. The US Dollar and equities were also in negative territory to start the main session.

 

This morning Brazil’s govt agency, CONAB, released their crop projections giving us a sneak-peek of what may lay ahead from USDA. They projected Brazil’s soy crop at 110.2 MMT, up from their previous forecast of 107.6 MMT in March. Analysts expect a USDA soy crop estimate of 109.9 MMT for Brazil, up from USDA’s March forecast of 108. For corn, CONAB came in at 91.5 MMT vs their 88.9 MMT forecast in March. Meanwhile the USDA report is expected by analysts to show a 92.4 MMT up from the March forecast of 91.5 MMT by USDA.

 

On Monday after the close USDA’s crop progress report showed the winter wheat crop improved to 53% good-to-excellent, up from 51% the previous week.  Last year’s reading at this time was 56%. For corn, only 3% of the US crop had been planted versus 4% this time last year.

In overnight deals, a South Korea feed group purchased 60,000 MT of soymeal from South America and another feed group in South Korea purchased 63,000 MT of feed wheat of optional origin.

 

USDA’s monthly supply and demand report is expected to show modest gains in all three crop carry-outs not only at the US level but at the world level as well. The report will be released at 11 am CDT.

 

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

April 10, 2017 | Grain Hedge Insights | Kevin McNew | Views: 160

USDA Crop Report to be Released Tomorrow

Grains in Positive Territory to Start the Week

Grains were in positive territory to start the week led by soybeans. In outside markets, crude oil was also showing impressive gains, hitting its highest mark in a month.

 

Rains over the weekend in Argentina came in heavier than expected with widespread coverage of 1 to 2 inches on waterlogged soils. Some areas saw as high as 7 inches in Buenos Aires. This will continue to hamper the soy harvest there as well as lead to quality concerns.

 

In the US, weather continues to lean to the wet side. Rain is expected regularly this week over the Midwest with totals of 0.5-1.5 inches expected in the ECB and 0.75-2.5 in the WCB. The frequency of the rains will be more of a problem than the amounts as rain is expected every 2 to 3 days. Heading into the 2nd week of the forecast; rains are expected to intensify in the Upper Midwest with totals of 1-3 inches which could stall in planting progress by April 23.  

 

In international news, Malaysian palm oil hit a 6-month low. Data from the Malaysian Palm Oil Board showed ending stocks for March rose 6.5% on the month to 1.55 MMT, outpacing market expectations.

Tomorrow, the USDA will release their monthly crop report. Modest gains in US carry-outs are expected after higher than expected quarterly stocks figures released March 31. Traders will eagerly watch South America production with expectations for a big bump in Brazil corn/soy estimates and only a modest uptick expected in the Argentine production numbers.

 

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

April 07, 2017 | Grain Hedge Insights | Kevin McNew | Views: 152

Weekly Cash Comments

Weekly Cash Commentary for week ending 04/07/2017

Grain basis moved higher this week with soybeans advancing 1.5 cents a bushel on average across the US while corn basis was up a modest 0.8 cents a bushel.

 

The steep slide in soybean prices at the end of last week helped fuel some minor basis improvements with soy crush facilities seeing gains of 2.8 cents a bushel on average.  River terminals, however, saw some minor weakness on the week as average soy basis dipped 0.5 cents a bushel. Of note this past week there was a fairly noticeable response to USDA’s big soy acreage jump as 20% of the grain buyers in GeoGrain’s system of over 4,300 buyers lowered their new-crop soybean bids over the past week.

 

For corn, spot basis did improve on average by 1.3 cents at ethanol plants but continues to run well below average for this time of year. Like soybeans, river terminals were mostly flat over the last week.

 

With First Notice Day on May futures 3 weeks away, it seems that soybean basis along key delivery points has a long way to go to push convergence to futures. Average basis along delivery points is about -25K suggesting quite a move will be needed to get the spot basis to par in the next few weeks. For corn, the delivery locations are running at about -8K with upside to par expected in the next 3 weeks.

 

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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