October 19, 2017 | Grain Hedge Insights | Kevin McNew | Views: 138

Strong Export Sales for Corn and Wheat This Morning

Grains Traded Slightly Higher in the Overnight Session

In the overnight session the grains traded slightly higher with December corn up 1 cent, November soybeans up 1 cent and December Chicago Wheat up 1 cent. The U.S. forecast shows some chance for precipitation in the eastern Midwest early next week which could slow an already lagging harvest.

 

EXPORTERS SELL 384,000 METRIC TONNES OF SOYBEANS FOR DELIVERY TO CHINA DURING THE 2017/2018 MARKETING YEAR.-USDA

 

Yesterday’s rains favored southern Brazil and more precipitation is expected in the 6-15 day forecast which should ease concerns about dryness in that region. In Argentina however, it was wetter than expected and continues to put pressure on planting which has been delayed due to excessive moisture this season.

 

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Ethanol production over the last week increased sharply to 1.019 million barrels per day from 967 BPD. This was a strong increase from last week and was 2.1 percent above last year during the same time. Ethanol stocks were recorded at 902 million gallons which was down 2 million gallons from last week’s level. However, the drawdown in ethanol stocks which typically starts in September and continues into November hasn’t really happened yet this year. Ethanol stocks have actually increased since the first of September and are now 12.9 percent higher than last year. This is a development that needs to be monitored and brings into question how robust demand is for Ethanol as year-over-year production increases.   

 

 

Export sales for wheat and corn were strong this morning with both grains beating trade expectations. Wheat sales were up sharply this week and were 75 percent over the four week moving average. The majority of wheat sales were to Mexico, China, Unknown Destinations and Japan. Corn export sales beat expectations but declined 21 percent from last week. Soybeans sales missed expectations, down 27 percent from last week with reductions reported from Unknown Destinations and Costa Rica.


 

Weekly Export Sales-

 

Actual

Estimated

Wheat

615

250-450

Corn

1,254

800-1,100

Soybeans

1,275

1,300-1,700


 

 

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October 18, 2017 | Grain Hedge Insights | Kevin McNew | Views: 121

Dry Weather in the Midwest Expected to Boost Harvest

Grains Traded Lower in the Overnight Session

In the overnight session the grains traded slightly lower with December corn down ¼ cent, November soybeans down 1 cent and December Chicago wheat down 2 ¼ cents. Dry weather throughout the Midwest is expected to boost harvest pace according to the latest 6-15 day forecast.  

 

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Brazil has received scattered rain in the west and far south yesterday which will continue to aid planting which had been lagging at 12 percent planted due to dry weather. More precipitation is expected in the 11-15 day forecast which should provide widespread benefit for the Brazilian corn and soybean crop. Argentina is expecting showers in the eastern part of the country today but is expected to make progress planting over the next week.  

 

 

The U.S. Wheat Associates has announced that they will be closing their office in Egypt after 40 years. The trade group promotes U.S. wheat exports, but the sharp shift away from U.S wheat in favor of Russia and the Black Sea wheat has shrunk Egypt to the 37th buyer of U.S wheat overall. Egypt held the rank of fifth largest market for U.S. wheat and 2nd largest market for soft red winter wheat as recently as the 2012/13 marketing year. The U.S Wheat Associates is looking at refocusing its efforts toward higher value markets in Asia and Latin America.

 

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October 17, 2017 | Grain Hedge Insights | Kevin McNew | Views: 284

Latest Crop Progress Report Results

Grains Slide Lower in the Overnight Session

In the overnight session the grains slid lower with December corn down 1 ¼ cents, November Soybeans down 5 ½ cents and December Chicago wheat down ½ penny. The latest forecast shows rain returning to the Midwest in the 11-15 day forecast which should slow an already lagging harvest progress.

 

Exporters sell 115,000 MT of Corn for delivery to Mexico during the 2017/2018 marketing year. Exporters sell 146,000 MT of Corn for delivery to unknown destinations during the 2017/2018 marketing year.-USDA

 

The latest Crop Progress report showed that only 28 percent of corn has been harvested as of October 15th compared to a four year average of 47 percent harvested. Corn condition increased 1 percent to 65 percent rated good-to-excellent. Soybean harvest is moving along a bit faster than corn with 49 percent harvested but is still behind the four year average of 60 percent. Soybean’s rated good-to-excellent held steady at 61 percent this week. The report also showed that 60 percent of wheat has been planted this year which is behind the five year average of 71 percent. There should be more opportunities for fieldwork this week with the forecast showing clear weather through the middle of next week.

 

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The NOPA Crush Report which was released yesterday showed that 136.419 million bushels of soybeans were crushed in the month of September, down 6.005 million bushels from August and below the average analyst guess of 138.071 million bushels. Despite missing expectations this year’s September soybean crush was 6.184 million bushels over last September’s numbers. The NOPA report showed that oil stocks were at 1.302 billion pounds, which was slightly below the expectations of 1.332 billion pounds.

 

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October 13, 2017 | Grain Hedge Insights | Kevin McNew | Views: 139

Weekly Cash Comments

Weekly Cash Commentary for week ending 10/13/2017

In the cash market this week there was a bit of buoyancy as river barge markets reverted to more normal pricing and corn harvest ground to a near halt. On the week, soybean basis was up 2 cents while corn basis posted a modest 1-cent advance.

 

With the slow progress for corn harvest, basis levels held mostly stable on the week with some modest gains in the Upper Plains and Western Cornbelt where wet weather has hampered cutting progress. Along the river system, a drop in barge rates helped fuel a big 10-cent advance on the week. But for ethanol plants as a group they were off 1-cent on the week.

 

For soybeans, the river markets also catapulted higher by 16 cents a bushel from last week’s disastrous readings. Soy crush plants added 2 cents a bushel as a group but plants located closer to river markets followed higher with double digit gains.

 

Harvest delays are still expected as this weekend should bring rain into the NW part of the grain belt. Some localized flooding is possible, especially in central and southern Iowa, southern Wisconsin, northern Missouri, and northwestern Illinois. This could continue to provide support to corn basis.

 

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October 13, 2017 | Grain Hedge Insights | Kevin McNew | Views: 367

Soybeans Advance Over News from USDA

Chicago Soybean Futures Rose on Friday

In the overnight session, Dec Corn was up 1.5 cents, Nov Soybeans were up 3.75 cents and Dec Wheat was up a little over 1 cent.

 

Chicago soybean futures rose on Friday, a day after the US Department of Agriculture (USDA) unexpectedly cut its forecast of the US soy crop. The USDA report put out a bullish yield number for the US crop of 49.5 bushels an acre, down from last month’s forecast of 49.9 bushels. Corn was weakened by the USDA’s expectation of a larger US crop, while wheat was underpinned by improving export prospects for US supplies.

 

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China, the world’s top soybean buyer, imported 8.1 million tonnes of the oilseed in September, up 12.7 percent on a year ago, after crushers saw margins improve over the summer and anticipated healthy demand for soymeal from hog farms. The September figure brings imports for the 2016/17 crop year, running from October to September, to 93.5 million tonnes, well above the prior year’s 83.2 million, and another record, according to Reuters calculations.

 

Net Weekly Export Sales-

 

Actual

Estimated

Wheat

175

300-500

Corn

1,593

800-1,100

Soybeans

1,747

900-1,200

 

 

Wheat net sales of 175,000 metric tons for delivery in marketing year 2017/18 were down 65 percent from the previous week. Corn net sales of 1,593,200 MT for 2017/18 were reported; Soybean net sales of 1,747,300 MT for 2017/18 were reported.

 

US consumer prices recorded their biggest increase in eight months in September as gasoline prices soared in the wake of hurricane-related production disruptions at oil refineries in the Gulf Coast area, but underlying inflation remained muted. The increase was the largest since June 2009 and followed a 6.3 percent advance in August. The Labor Department said Harvey was reported to have impacted refinery capacity in the Gulf Coast.

 

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October 12, 2017 | Grain Hedge Insights | Kevin McNew | Views: 327

USDA Supply and Demand Report Due Out Today at 11 am CST

Grains Mostly Stable in the Overnight Session

Grains mostly stable in the overnight session with Corn unchanged, Nov Soybeans up 2.5 cents and Dec Wheat down three-quarters of a cent.

 

Exporters sell 120,000 MT of Corn for delivery to Mexico during the 2017/2018 marketing year-USDA

 

Whenever the US Department of Agriculture updates supply and demand outlooks, adjustments to the US corn and soybean production typically steal the spotlight from other items on the global balance sheets at this time of year. But, since the market expects marginal changes to these usual favorites, elements outside the US-particularly in wheat-may be the ones moving the world balance sheets this month. -states an analyst from Reuters

 

The US Department of Agriculture will release its monthly supply and demand estimates along with the US crop production report at 11 am CST. Analysts predict on average that the US Corn and Soybean harvests will each rise by fractions of a percent.

 

At the world level, the trade expects USDA to slightly trim 2017/2018 global ending stocks for wheat, corn and soybeans, the latter to the greatest degree at 1 percent. There could be some opposing movement in the grains, however, as adverse weather may have hurt Southern Hemispheric wheat crops. But losses could be offset with a potential supply expansion, especially in India, and China’s massive inventory always has the power to swing the wheat and corn balances. Although adjustments to US corn supply are expected to be minor, possible tweaks on the demand side could prove more influential to domestic stocks. -Reuters


 

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China on Thursday increased the forecast for its deficit in corn supply in the 2017/2018 crop year to 4.31 million tonnes from the 890,000 tonnes predicted last month, stoked by lower-than expected output and higher anticipated demand. Corn output is expected to drop to 210.1 million tonnes versus last month’s forecast of 212.48 million tonnes, the agriculture ministry said, adding that less land had been planted with corn than earlier thought following reduced government support.

In the weather, rains return this weekend, slowing Midwest corn/soy harvest; however, drier pattern next week aids recovery. Plains hard red winter wheat seeding improving with drier pattern next 10 days, but brief rains early in weekend. Rains expected to return in 11-15 day, slowing Midwest corn/soy harvest and Plains hard red winter wheat seeding.


 

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October 11, 2017 | Grain Hedge Insights | Kevin McNew | Views: 269

Grains Continue to Inch Lower in the Overnight Session

USDA Supply and Demand Report Out Tomorrow

Grains continued to inch lower overnight with corn down 1, beans off fractionally and wheat down 2.

 

USDA reported 264,000 MT of soybeans sold to China, 132,000 MT to unknown destinations. They also reported a 150,000 MT of corn to Mexico and 104,202 MT of Hard Red Winter Wheat to Mexico.

 

Yesterday after the market closed USDA released their crop progress report. The soybean crop was at 36% harvested up from 22% last week but behind the 5-year average pace of 43%. Meanwhile, corn gained little ground going from 17% last week to 22% this week, and well below the 37% normal pace for this time of year.

 

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Tomorrow will bring fresh input from USDA on the supply and demand situation. Traders look for fractionally higher production figures in the US and a slight cut to ending stocks thanks to smaller than expected old-crop stocks from USDA’s September Quarterly Stocks report.

 

Brazilian farmers will likely produce a smaller amount of corn and soy in the 2017/18 season due to less favorable weather than the prior crop year, food supply and statistics agency Conab said on Tuesday. In its first forecast for the 2017/18 crop, Conab estimated Brazilian grain production at between 224.1 million tonnes and 228.2 million tonnes, compared with 238.5 million tonnes in the prior cycle. The lower end of the range would represent a 6 percent drop in output. "The highly favorable climate conditions that contributed to a record grain output last season are unlikely to be repeated," Conab said in a statement.

 

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October 10, 2017 | Grain Hedge Insights | Kevin McNew | Views: 356

Grains Continue to Flounder in the Overnight Session

Today USDA Reports Export Inspections

Grains continued to flounder overnight with corn and wheat dipping further into negative territory while beans put on a 4-cent going into the break.  

 

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Today will bring USDA reports on export inspections and crop progress as Monday’s Columbus Day holiday delayed the reports. Weather yesterday was mostly dry with the exception being some rains showers in MO/IL. Harvest progress is expected to show more advancement for soybeans than corn over the last week.

 

France's farm ministry raised its forecasts for the country's 2017 corn and wheat crops. The ministry pegged the corn crop at 13.0 MMT from 12.75 million last month, putting the crop 11.4 percent above last year's level. Soft wheat output was increased slightly to 37.9 MMT from 37.8 last month. This put the 2017 crop up 37.7 percent compared with weather-hit 2016 output and on course to be the third largest on record, the ministry said.


 

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October 09, 2017 | Grain Hedge Insights | Kevin McNew | Views: 347

Wheat and Soybeans in Negative Territory after Overnight Session

Tropical Storm Nate Makes Landfall on Saturday

Sunday night saw renewed buying enthusiasm on the trade’s open but that quickly faded heading into the morning dawn. Going into the break, corn was struggling to hold on to a slim advance while wheat and soybeans were in negative territory.

 

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Tropical storm Nate made landfall in LA/MS Saturday and quickly raced to the Northeast. It brought rains of 3 to 5 inches in the Mississippi Delta and by late weekend had hit the Ohio River Valley and Mid Atlantic with some limited showers. It is not expected to bring much crop production issues to the region.

 

The WCB and US Plains saw rain over the weekend. Eastern Nebraska and central Kansas through much of Iowa to central and western Wisconsin saw 1.00 to 2.00 inches and local totals of 2.00 to 3.00 inches resulted. Rain will return to the northwestern Corn Belt Friday into Monday, Oct. 16, with amounts of 0.50 to 1.50 inches and local totals over 2.00 inches possible from Nebraska to Wisconsin and Minnesota

Brazil soybean planting on Friday reached 5.6 percent of the total forecast area, according to consultancy Safras & Mercado, well below the 10.4 percent seen at this time last year as dry weather conditions for most of September delayed field work. Seeding was in line with a five-year average of 5.3 percent for this time of the year in Brazil. The dry areas of Mato Grosso should see limited moisture in the next ten days.

 

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October 06, 2017 | Grain Hedge Insights | Kevin McNew | Views: 361

Weekly Cash Comments

Weekly Cash Commentary for week ending 10/06/2017

Grain basis had extreme bouts of volatility this week driven in part by a spurt in harvest progress as well as low river levels which sent barge freight shooting to 3-year highs. But, by the end of the week the meteoric rise in barge costs reversed course giving way to basis levels to return to a more normal state. On the week, corn basis was unchanged while soybean basis was off 2 cents.

 

For corn, the upper Midwest and WCB regions continue to be slow to harvest which has given some limited life on basis and a few buyers occasionally popping quick-ship premiums. This week saw another ethanol plant in NW IA put a premium to their basis boosting it 7 cents a bushel. In Illinois & Indiana as well some corn plants there also found the need to push their basis higher by 10 cents.  While these few isolated buyers bid up their basis, this was against a broader backdrop of weakness or steady basis for much of the remaining corn processors. In the southern Plains, basis levels have been holding firm as strong feed demand and a mediocre crop has made for some early season premiums existing in the marketplace for OK feed buyers.

In the soybean market, crush plants were mostly under pressure this week with a loss of 4 cents a bushel as a group. However about 25% of the plants saw 5 to 15 cent losses on the week as there were virtually no quick-ship premiums to be found. For river terminals, after the dust settled from the barge freight gyrations on the week the average river basis was mostly unchanged. But this masks significant losses in areas on the lower MS River that ended the week with double-digit drops.

 

With big crops on the way to market and large carry-out from the old-crop 2016 marketing year basis levels seem likely to face more pressure ahead. Crop storage space will be at a significant premium this year making on-farm storage an attractive marketing tool to capture better basis levels into late 2017 early 2018. The average carry from now until January across all grain buyers is 18 cents a bushel for corn and 22 cents a bushel for soybeans.

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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Weekly Cash Comments

October 13, 2017 | Grain Hedge Insights | Kevin McNew

In the cash market this week there was a bit of buoyancy as river barge markets reverted to more normal pricing and corn harvest ground to a near halt. On the week, soybean basis was up 2 cents while corn basis posted a modest 1-cent advance.

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