Morning Comments – September 20

In the overnight session the grains are trading higher with December corn up 1 ¼ cent, November soybeans up 3 ¼ cents and December Chicago wheat up 2 ¼ cents. Strong precipitation is expected over the weekend throughout southern Minnesota, South Dakota, Nebraska and western Kansas. By Monday the precipitation should extend down into the panhandle of Texas. The eastern grain belt is expected to remain mostly dry over the next couple weeks.

Exporters sell 132,000 MT of soybeans for delivery to China during the 2017/2018 marketing year. Exporters sell 1,080,000 MT of soybeans for delivery to unknown destinations, of which 960,000 MT is for 2017/2018 delivery and 120,000 MT for 2018/2019 delivery. -USDA

Yesterday’s trade action in November soybeans was positive after rebounding 8 ¼ cents off its low of 9.58 ½. Prices are now above Tuesday’s opening price and seems look like it wants to retest the most recent September 14th high of 9.78 ¼.

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The EU announced that they will be lowering Argentina biodiesel anti-dumping duties to between 4.5 to 8.1 percent, down from 22 to 25.7 percent set in 2013. The recent ruling will allow Argentina to begin exporting biodiesel to the EU which is timely considering the U.S sharply increased their countervailing duties in August.

Ukraine’s First Deputy Ag Minister reported that Ukraine corn harvest is expected to be 27 million metric tons compared to 2016’s cropo of 28 million metric tons. The September WASDE report estimated Ukraine’s total corn production at 27.5 million metric tons which was down 1 MMT from their August forecast.

Yesterday it was announced by Egypt’s state grain buyer GASC that they had purchased 175,000 metric tons of Russian Wheat in the tender that was issued on Monday.

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Morning Comments – September 19

In the overnight session the grains were mixed with December corn up 1 cent, November soybeans down ¼ cent and December Chicago Wheat up 2 ¼ cents. Scattered rains helped southern Minnesota, northwest Iowa, Indiana and Michigan yesterday with more precipitation expected today. The heaviest rains are expected to fall this evening in the Dakotas and Minnesota. The rain is coming at a time where it will have marginal benefit to the overall corn and soybean crop. Freeze risks remain low over the next two weeks.

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The latest crop progress report showed that corn is 7 percent harvested compared to a four year average of 11 percent. Corn conditions held steady in all categories with 62 percent of the crop rated good-to-excellent. Soybeans were 4 percent harvested with a good-to-excellent rating of 59 which was down 1 point from last week.

There were a couple international tenders announced recently. The first was a South Korean tender to purchase up to 70,000 metric tons of corn from optional origins and the second being Egypt’s GASC to buy an unspecified amount of wheat for shipment between Oct 21st-31.

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Morning Comments – September 18

Grains went into the morning break slightly lower after a night of two-sided trade. Corn and wheat were off 2 while soybeans was off a half.

USDA announced the sale of 261,000 MT Of soybeans to China and 126,000 MT to unknown destinations.

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Russian wheat export prices rose for a second consecutive week due to higher global benchmarks and the strengthening of the rouble against the dollar, analysts said on Monday. Black Sea prices for Russian wheat with 12.5 percent protein content and September delivery were at $185 a tonne on a free-on-board (FOB) basis at the end of last week, up $2 from the week earlier, agriculture consultancy IKAR said.

Argentina’s 2017/18 soybean harvest is expected to fall by as much as 7 percent to 52 million tonnes compared with the 2016/17 crop year, local agriculture analysts said on Friday, citing low profit margins and excess water caused by heavy rains.

Friday saw NOPA soy crush estimates better than expected with 142.42 MB of soybeans crushed in August. This was the largest crush on record for August and beat expectations that averaged 137.5 with range of estimates from 133.1 to 144.7.

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Weekly Cash Comments

Cash Commentary-

Grain basis was mixed throughout the country as the convergence of old-crop/new-crop marketing seasons begins to cause some shifting patterns in basis. On the week, US average corn basis was fractionally higher while soybeans lost 3 cents a bushel.

For corn, early harvest in parts of the Southern US is starting to weigh on basis. At the same time recent weeks of active farming selling of old-crop corn has helped mute basis strength. However, end-buyers of corn started to show a bit more strength for corn with ethanol plants as a group up 1 cent on the week. In the WCB basis at some plants showed more buoyancy with gains of 3 to 5 cents fairly typical. For river markets, they were generally weaker by 4 cents.

Corn basis was buoyed mostly by ethanol plants which saw a 3-cent gain on the week. Much of the Western Cornbelt saw solid basis improvements on the week as farmers there face lower yield potential and hold back on any old-crop deals. Meanwhile at river terminals basis was up about 2 cents, on par with the broader movement across the US. The Gulf was mostly steady on the week.

For soybeans, basis levels were sharply lower in IA/MN/MO and S IN as buyers start to move basis levels to their new-crop bid. Soybean crush facilities were off 5 cents on the week while river terminals held mostly stable as strong export demand of late keeps a bid under the market.

In terms of the competitive landscape, IA & MN saw some smaller players heat up the market place with 10 cent advances on basis as late season farmer selling there has slowed.

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Futures Commentary-

Grains were mixed this week with corn posting a modest 1-cent decline while soybeans were up 7 and wheat up 5.

Soybeans managed to pull back near the $9.80 mark but found selling pressure late in the week. Strong export sales have helped put a bid back in the bean market even as expectations of bigger US crop continue to grow. This week’s USDA crop report showed bean yields higher than expected at 49.9, up 0.5 from USDA’s August report.  They pegged US production at a 4.43 billion bushel crop. For corn yield it also came in higher than trade expectations at 169.9, up 0.4 from last month and that puts the crop at 14.14 billion bushels.

Harvest has begun in some parts of the country for corn with USDA reporting 5% of the crop cut by last Sunday. Over the next few weeks US weather seems mostly benign as some rains in WCB may slow harvest but help aid soil moisture for winter wheat planting. Meteorologists see no real threat of an early freeze that would impact late season crop development.

This week’s export sales report from USDA showed a strong number for beans with 1.6 MMT sold versus 1 to 1-3 expected going into the report. Corn came in at the high side of the range with 1.05 MMT sold vs 0.8 to 1.1 expected while wheat fell below trade expectations with only 0.3 MMT sold on expectations ranging from 0.35 to 0.55.

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Morning Comments – September 15

Grains were lower overnight with soybeans giving up 3 cents after yesterday’s sharp 16 cent rally. Corn was also lower while wheat was unchanged going into the morning break.

EXPORTERS SELL 132,000 METRIC TONS OF SOYBEANS FOR DELIVERY TO CHINA DURING THE 2017/2018 MARKETING YEAR- USDA

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India’s edible oil imports are likely to rise 1.6 percent from a year ago to 15.5 million tonnes in 2017/18 as overseas purchases of palm oil are expected to rise, a leading industry analyst Dorab Mistry said on Friday. The world’s biggest edible oil importer is likely to import 3.5 percent more of palm oil from a year ago in the marketing year starting Nov. 1, pushing up its overseas purchases to 9.65 million tonnes, Mistry told Globoil India conference in Mumbai.

Friday at 11 am CST NOPA crush estimates will be released. Traders look for the best August crush number in over a decade with 137.5 MB expected. That compares to 131.8 in August of 2016. Crush forecasts ranged from 133.1 to 144.7

Over the next few weeks US weather seems mostly benign as some rains in WCB may slow harvest but help aid soil moisture for winter wheat planting. Meteorologists see no real threat of an early freeze that would impact late season crop development.

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Morning Comments – September 14

Grains found a bit of buying strength overnight with beans and wheat leading the complex higher on 5 cent gains while corn lagged behind on a 2-cent advance.

EXPORTERS SELL 198,000 METRIC TONS OF SOYBEANS FOR DELIVERY TO CHINA DURING THE 2017/2018 MARKETING YEAR- USDA

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Argentina’s 2017/18 corn and wheat planted areas are seen at 6.2 million hectares and 5.4 million hectares, respectively, the Rosario Grains Exchange said on Wednesday, higher than the 5.85 million hectares and 5.3 million hectares planted in 2016/17. The 2017/18 wheat harvest will reach 17 million tonnes, the exchange said in its monthly report. The estimate for wheat planted area was slightly lower than the exchange’s previous estimate for 5.45 million hectares due to excessively wet conditions in much of Argentina’s grains belt.

Friday at 11 am CST NOPA crush estimates will be released. Traders look for the best August crush number in over a decade with 137.5 MB expected. That compares to 131.8 in August of 2016. Crush forecasts ranged from 133.1 to 144.7

This morning’s weekly export sales report from USDA showed a strong number for beans with 1.6 MMT sold versus 1 to 1-3 expected going into the report. Corn came in at the high side of the range while wheat fell below trade expectations.

Weekly Export Sales-

Actual

Estimated

Wheat – NC

316

350-550

Corn – NC

1,046

800-1,100

Soybeans – NC

1,612

1,000-1,300

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Morning Comments – September 13

Grains were higher overnight with corn advancing 2 cents while soybeans and wheat added 4 cents.

EXPORTERS SELL 167,370 METRIC TONS OF SOYBEANS FOR DELIVERY TO MEXICO DURING THE 2017/2018 MARKETING YEAR- USDA

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USDA’s report on Tuesday brought more bearish news to the grains. Corn yields were increased by 0.4 to 169.9 for a 14.14 bil bushel crop. Bean yields also increased by 0.5 to 49.9 for a 4.43 billion bushel crop.

New crop crush was unchanged but exports were increased 25 to 2.250 bil bu. The China buying has exploded over the last few weeks but remains very far behind the pace set over the last two years. The increased old and new crop usage offset the higher bean yields.

Price action saw the market sell-off after the USDA report, hitting lows within the first hour, but since then have managed to pull back higher with beans adding 20-cents.

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Morning Comments – September 12

Grains went into the morning break with sideways trade action still the major theme. Ahead of the USDA report corn and beans were off 1 while wheat was up 1.

EXPORTERS SELL 132,000 METRIC TONS OF SOYBEANS FOR DELIVERY TO UNKNOWN DESTINATIONS DURING THE 2017/2018 MARKETING YEAR- USDA

Today’s USDA report at 11 am CDT is expected to show only minor adjustments in production and carry-out figures. But with traders on guard for surprises, there should still be some volatile trade around the report. Overall, traders look for a slight drop in US corn carry-out to 2,180 MB from 2,273; last month on a US yield of 168.2. For soybeans, ending stocks are expected to dip to 442 MB from 475 last month based on a 48.8 bushel yield.

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On Monday after the close, USDA showed the corn crop was 5% harvested on par with the long-term average for this time of year. Condition ratings for corn continued to hold firm at 61% while soybean conditions dipped 1%.

Overnight, the French ag minister estimated the corn crop there at 12.75 MMT unchanged from last month and 8.9% on the year. The wheat crop was pegged at 37.8 MMT up from 36.8 last month and 37% from 2016.

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Morning Comments – September 11

Grains were mostly directionless to start the week with corn down 1, soybeans up 1 and Chicago wheat giving up 4.

Private exporters reported to the U.S. Department of Agriculture export sales of 352,000 metric tons of soybeans for delivery to unknown destinations during the 2017/2018 marketing year.

Despite a drop in U.S. wheat production this year, a record Russian harvest and large crop in Ukraine are expected to keep international markets well supplied this year. In addition, Egypt is said to be considering rejection of a French wheat cargo due to the presence of poppy seeds which lends more uncertainty about the world’s #1 wheat importer.

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Tomorrow brings new data from USDA with the release of the Quarterly Stocks report and USDA’s WASDE Report. For corn, traders look for a 168.2 bushel yield as compared to August of 169.5 while soybeans are pegged at 48.8 vs USDA at 49.4. Traders also look for a slight drop in US new-crop carry-out numbers with corn expected to 2,180 MB from USDA’s August projection of 2,273 while soybeans dip to 442 MB from USDA’s August estimate of 475 MB.

The weather forecast has mostly dry weather for the dominant grain areas for the next week. This could reduce chances for late rains to add esp to the US soybean yield. The 11-16 day forecast has no cold air threats with close to average temps for the Plains, Midwest, and Delta. Precip looks to run near average in the Midwest and Delta and below average in the Plains.

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Weekly Comments

Futures Commentary –

Grains managed to shake the 5-week slide and turn higher on the week with soybeans leading the complex higher on a 24 cent advance while wheat found modest buying on a 3 cent advance. Corn on the other hand continued to languish in the mid $3.50 range and was fractionally lower on the week.

The U.S Wheat complex has found some traction after Black Sea wheat stabilized over the weekend. The FSU wheat harvest has been large this year which has weighed on international wheat prices over the last few months. On Friday, the Russian Grain company IKAR increased their wheat output forecast from 81 to 84 million metric tons and adjusted their wheat export estimate from 31 to 33 million metric tons. UkrAgroConsult also made revisions by increasing their Ukrainian grain export forecast by 3.4 percent to 42.06 metric tons. The consultancy increased their forecast due to stronger than expected yields and a larger harvested area.

In the US, crop conditions have mostly stabilized. Corn declined by a percentage point to 61 percent good to excellent compared to expectations of holding steady. Soybean conditions were unchanged at 61 percent good to excellent. Private forecaster Planalytics released their latest yield forecast for corn at 168.6, up from their previous forecast two weeks ago of 167.0, but slightly below the USDA figure of 169.6. Meanwhile for soybeans they estimate the US yield at 49.1 vs 48.1 previously and just below USDA at 49.4. Meanwhile, the Linn group came out with a much lower corn yield forecast of 165.8, but similar bean projection of 49.3.

This week’s export sales saw larger than expected net sales reductions in old crop corn and soybeans. Despite the large sales reductions in old crop, new crop sales were outstanding and beat analyst expectations. Wheat sales were on the low side of expectations and down 30 percent from the previous week.

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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