Weekly Commentary

Cash Commentary-

US average corn and soybean basis was mostly unchanged this week, but there were big differences across the country depending on proximity to the rivers.

For corn, the river markets were hit hard with 8-cent losses on average tied to a dime discount at the Gulf export market.  Barge rates did manage to move lower this week as flooding concerns waned and barge movement started to improve. For beans the draw-down in basis was less noticeable with river terminals down 4 cents on average and the Gulf down 8 cents.

End users of grain were mostly steady this week. However, there were modest improvements in the Central and Northern Plains. Corn Plants in SD improved basis on average by 2 cents a bushel.

With corn futures backing down this week we would expected to see basis levels start to firm. End buyer demand across livestock, exports and processing is rock solid so with spring fieldwork around the corner the next few weeks could be important to keep pipelines full.

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

Futures Commentary-

Grains corrected this week taking some of the steam out of the two-month rally with corn down 7, soybeans off 23 and wheat down 20.

Some hints of modest rains in Argentina were enough to give the bean market a reason to trade lower this week. Weather forecasts of modest rain are likely too little, too late but just their advertisement is enough for bulls to take profits for the time being. This week the Rosario Grain Exchange lowered its corn and bean estimates to 32 and 40 MMT, respectively. This compares to their previous forecast of 35 and 46.5 MMT.

On the demand side, US soy crushers ran at a record pace in February in the face of elevated crush margins. NOPA crush figures released on Thursday showed monthly crush at 153.7 MB with analysts’ average estimate at 149.4 MB. Soy export demand was also rock-solid at 1.3 MMT on the week, above analyst expectations ranging from 0.8 to 1.2. While year-to-date export sales for beans continue to lag behind pace by a large margin to reach USDA’s annual export forecast, the likely surge in US business brought on by the Argentina drought should help close the gap.

For corn, not only are exports exceeding the pace to reach USDA, but they are having one of the best 3-month sales streaks on record. There also seems to be no short-term let up with this week seeing a marketing year high of 2.5 MMT sold on old-crop.   At the beginning of the marketing year USDA penciled in only 1,875 MB in exports, but now their forecast sits at 2,225 MB with another 100-200 MB of upside. This kind of export comeback is not unheard of. In 2007/08, US corn exports had a record year hitting 2,436 MB. But like this year, the 2007 early-season USDA projections were uninspiring at only 1,975 MB. We don’t believe the market has fully come to terms with the massive paradigm change in the export picture.

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

Morning Comments – March 16


  • NOPA Crush beats expectations

  • Corn export sales at record pace

  • Rosario Grains Exchange lowers production est again



  • Weather forecast unchanged with rain expected this weekend.

  • Rosario Grains Exchange lowered its Argentina corn and soybean production estimates.

  • Soybean production estimate revised to 40 MMT from 46.5 MMT. (Mar USDA @ 47 MMT)

  • Corn production estimate revised to 32 MMT from 35 MMT. (Mar USDA @ 36 MMT)


  • Weather forecast unchanged with scattered showers causing some fieldwork delays until next Wednesday.

  • Rio Grande do Sul which has been dry is expected to get precipitation over the weekend and into Tuesday.

NOPA Crush Beats Estimates

  • NOPA February crush beat expectations on Thursday by reporting that members processed 153.719 million bushels of soybeans in February compared to analyst estimates of 149.443 million bushels.

  • This is the largest February crush on record with the next closest February in 2010 when 148.351 million bushels were crushed.

  • Large February crush was driven by unexpectedly strong processing margins triggered by drought in Argentina.

  • Soyoil stocks increased to 1.856 billion pounds compared to analysts estimates of 1.766 bln lbs.

Weekly Export Sales

  • The latest export sales report on Thursday showed the strongest weekly corn sales for a single marketing year in 23 years.

  • U.S corn export sales are expected to stay strong into the summer as drought in Argentina limits competition.

  • Brazil corn exports don’t typically come on line until August when second crop corn is harvested. JBS recently purchased Argentina corn to import into Brazil.

  • Argentina corn offers are currently $3.50 per metric ton over the U.S. Gulf and Ukraine corn is offered $17.50 per ton higher.

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


Morning Comments – March 15


  • NOPA Crush numbers scheduled for release at 11 CST

  • Marketing year high for corn export sales!

  • Ethanol production declines; while stocks jump


  • Yesterday’s rains fell in NE Santa Fe and Corrientes.

  • Weekend rains are expected to cover 60 percent of crop producing regions.

  • Precipitation is expected to have limited impact on yield recovery given the late stages of development.


  • More showers today across Brazil are expected to slow fieldwork through next Wednesday.

  • Rains expected in Brazil’s far southern region of Rio Grande Do Sul today providing some much needed moisture to that area.

NOPA Crush Expectations

  • NOPA February crush is expected to show that 149.443 million bushels of soybeans were crushed in February.

  • Analysts expect soyoil stocks to be reported at 1.766 bln lbs.

Ethanol Production

  • Weekly ethanol output declined 32,000 barrels per day to 1.03 million bpd and was 1.9 percent below this week last year.

  • The surprise increase in corn used for Ethanol in the March WASDE report means that weekly production will have to run 3.2 percent ahead of last year from now until the end of August.

  • Weekly ethanol stocks increased to 24.28 million barrels from 23.144 mln bbls last week.

  • Ethanol stocks are now 6.7 percent above LY during this time.

Weekly Export Sales

  • Wheat sales fell 58 percent from LW and is down 47 percent below the four week average.

  • Corn export sales were huge this week, recording a marketing year high of 2.5 million metric tons sold.

    • Major buyers included 838,000 MT to Japan, 388,600 MT to Taiwan, 206,800 to S. Korea and 197,900 to Mexico.

  • Soybean sales were down 49 percent from last week but still managed to beat analyst expectations.

Weekly Export Sales-












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


Morning Comments – March 14th


  • CME increases corn and soybean margins


  • Two precipitation events are expected in Argentina through Monday.

  • Strongest precipitation is expected to occur in the northeast.

  • The precip events have potential to be widespread and provide some meaningful moisture to Buenos Aires, southern Entre Rios and Southern Santa Fe.

  • Argentine President announced that there will be some debt relief for farmers who have endured this years fierce drought.


  • More showers today across Brazil are expected to slow fieldwork.

  • FC Stone forecast 17/18 cotton area to increase to 1.183 million hectares. The company expects some Mato Grosso farmers to switch to cotton from corn due to favorable return prospects

Winter Wheat Crop Conditions

  • Latest GFS weather model suggested increased precipitation between March 23rd and March 25th in the Texas Panhandle, western Oklahoma and southwestern Kansas.

  • Although the latest run of the weather model suggests a possibility of rain, weather forecasters say there is still “low confidence” this event will bring meaningful moisture into the areas of extreme drought.

CME Raises Margin Requirements

  • CME raises margin requirements for corn to $600 per contract from $550. Soybean margins were increased to $1,400 per contract from $1,300 per contract.

NOPA Report Expectations

  • NOPA crush report scheduled for March 15th. Analysts are expecting to see total February crush to be reported at 149.443 million bushels.

  • Analysts are expecting soy oil stocks to be reported at 1.766 billion pounds.

FranceAgriMer Cuts SRW Stocks and Exports

  • The organization cut their estimates for French 17/18 SRW wheat export estimates to 8.5 MMT from 9 MMT.

  • French SRW wheat ending stocks were revised to 3.2 MMT from 3.25 MMT.

  • French 17/18 corn ending stocks were also revised lower to 2.7 MMT from 2.8 MMT in last months estimates.

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


Morning Comments – March 12th


  • Grains lower in the overnights.

  • Argentina rains disappointed over the weekend.




  • Weekend rainfall was light and precipitation totals ranged from .3” to 1.1”.

  • Rain fell in southern Entre Rios, southern Santa Fe and Buenos Aires and La Pampa. The majority of the area received less than .5” of rain.

  • Argentina rains in March have been between ¼ and ½ of normal precipitation.

  • Rain forecast in Argentina’s main crop growing region next weekend.


  • Ag Rural estimates soybean harvest at 48 percent complete compared to 56 percent complete during the same period LY.

  • Ag Rural estimates 1st corn crop around 28 percent harvested compared to 36 percent last year.

  • Ag Rural estimates Brazil’s 2nd corn crop is 81 percent planted compared to 88 percent complete last year at this time.

  • The Brazilian meat processor, JBS, purchased 30,000 MT of corn from Argentina after local farmers hold onto grains and prices to import become competitive with local supplies.

China May Double Soybean Exports

  • The sharp rally in soybean meal has traders estimating China’s soybean meal exports could double to 2 million tonnes in 2017/18.

  • Countries like Japan, South Korea and Vietnam which currently purchase soybean meal from Argentina may turn to other sources after drought has significantly reduced production potential in Arg.

Commitment of Traders- Week ending March 6th

  • The corn net long position for money managers (MM) increased to 163,534 contracts from 59,120 LW.

  • MM Soybean net long position increased this week to 183,711 contracts from 147,380 LW.

  • MM Kansas Wheat net long position grew to 20,759 contracts from 11,008 LW.

  • MM net short position for Chicago Wheat shrunk this week to -32,531 contracts from -60,632 LW.

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


Weekly Cash Comments

Cash Commentary-

Grain basis was stagnant again this week as strength on the board keeps grain moving into supply channels, while flooding along river-ways has pushed barge rates sharply higher. On the week, US average corn basis was up 0.5 cents and soybeans were unchanged.

Export bids out of the PNW and Gulf were higher this week as export demand surges and rivers swell slowing barge traffic. On the week the PNW corn market improved 4 cents while the Gulf shot up a dime. Soybeans saw similar relative strength as the Gulf gains of 8 cents outpaced the PNW which added 6 cents. River terminals upstream from the Gulf had little ability to bid higher as higher barge freight ate away all the incentive. On the week corn river markets gave up 1 cent a bushel while soy river markets were off 5 cents.

For end users it was a week of not really needing to work too hard for corn supplies. On average corn basis at ethanol facilities was off 0.5 cents a bushel with much of the weakness occurring in Iowa. Plants in South Dakota had some modest gains. For soy crushing facilities they were also off by 0.5 cents on the week, but there were a few plants in the Southeast, and Eastern Corn Belt pushing basis a dime higher.

Futures Commentary-

Corn hit its stride this week gaining 7 cents on bullish data from USDA while soybeans backed off 4 cents. Wheat gave up 16 cents.

The story-line in Argentina continues as the worst drought in 38 years is expected to take its toll on crops there. On Thursday USDA came out with a 47 MMT soy crop and a corn crop of 36. But after the report, the Buenos Aires Exchange pegged the crops at 42 of soy and 34 for corn. But, by the end of the week rains were starting to appear more consistently in various weather models. While it will do little to reverse the impacts at this late stage, if rains materialize by mid-March it may help stabilize late season soybeans.

On the demand side, USDA got aggressive on its US demand forecasts, bolstering ethanol by 50 MB and ramping up US exports by 175 MB. These moves slashed carry-out to 2,127 MB from 2,352. Just last harvest we were staring at 2,500 MB in projected carry-out. Weekly export sales hit an 8th week of greater than 1 MMT of sales with 1.8 MMT booked. Even with USDA’s much higher export projection, year-to-date sales are on par with meeting that forecast. For beans, weekly sales totaled 2.5 MMT, the best week since September.  However, USDA had to ratchet down their annual soy export forecast to 2,065 MB from 2,100 MB previously because of the dismal performance year-to-date.

At the end of the week, soybeans took a turn lower as a Chinese trade war seemed imminent around US tariffs on steel. According to Reuters the American Soybean Association says it has “heard directly from the Chinese that U.S. soybeans are prime targets for retaliation” as a countermeasure to US steel/aluminum tariff. If the Chinese level any sort of tariff on US soybeans this could lead to a huge price disadvantage as compared to South America and create significant downside potential for US soybeans.

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

Morning Comments – March 09


  • Grains lower in the overnight session.

  • US corn ending stocks revised lower by 225 million bushels.

  • Argentina corn and soybean production both were pegged below market expectations.

  • Buenos Aires Grains Exchange lowers Argentina corn and soybean production forecast.

  • White House sets biofuels meeting for Monday.

  • Exporters sell 183,000 MT of Soybeans for delivery to China during the 2017/2018 marketing year.

  • Exporters sell 205,000 MT of Soybeans for delivery to unknown destinations during the 2017/2018 marketing year.

  • Exporters sell 260,000 MT of Corn for delivery to unknown destinations during the 2017/2018 marketing year.

Argentina Weather

  • The latest weather model suggests an increase in precipitation late next week in eastern crop producing region of Argentina.

  • Some spotty showers expected over the weekend in Argentina. Any meaningful precipitation is expected to be localized and not widespread.

Brazil Weather

  • Showers expected to fall over the weekend and into Monday.

  • Rain will continue to cause delays in fieldwork.

  • Increased rain expected in southern Brazil next week.

WASDE Results

US Ending Stocks- In Billion Bushels


Avg. Trade Est.














  • USDA raised corn export forecast by 175 million bushels as Arg corn production is lowered and buyers are expected to move some origination to the U.S.

  • The USDA raised corn used for ethanol production by 50 million metric tons to 5.575 billion bushels.

  • Soybean ending stocks were revised higher by 25 million bushes after the USDA lowered its export forecast by 35 million bushels but raised its crush estimate by 10 million bushels.

  • U.S soybean exports were lowered due to increased competition from Brazil.

South American Production 17/18- In Million Metric Tons


Avg. Trade Est.


Arg Corn




Brazil Corn




Arg Soy




Brazil Soy




  • Argentina corn and soybean production estimates were reported below the average analyst expectations, but Brazil corn production was not cut as much as analysts expected.

  • This morning the Buenos Aires Grains Exchange lowered its Argentina soybean production estimate to 42 MMT from 44 MMT.

  • The exchange also lowered its corn production to 34 MMT from 37 MMT.

Global Ending Stocks- In Million Metric Tons


Avg. Trade Est.














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


Morning Comments – March 8th


  • Grains pare overnight losses after strong export sales.

  • March WASDE report due out at 11 AM CST

  • Exporters sell 110,000 metric tons of Corn for delivery to Japan during the 2017/2018 marketing year.

Argentina Weather

  • Showers are expected over the weekend, but meaningful moisture will be localized and in Northern Argentina.

  • Latest weather model showed an increase of precipitation is expected in Buenos Aires, central and the northeastern growing region next Thursday through Friday.


  • Ethanol Production increased to 1.057 million barrels per day from 1.044 MBPD.

  • Weekly production was 3.4% over LY during same week.

  • The increase in production over the last few weeks brings total production 2.5 percent over LY.

  • U.S. ending stocks increased to 972 million gallons from 965 million gallons LW.

Export Sales

  • Corn and soybeans beat export sales expectations by a large margin.

  • Corn sales increased 8 percent compared to last week on strong buying from Japan, Mexico, Taiwan and Vietnam.

  • China accounted for 1.2 MMT of soybean sales this week.












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


Morning Comments – March 07


  • Grains down slightly in the overnight

  • Gary Cohn says he will resign as economic advisor to Trump.

South America

  • Forecast for some rains in central and southern production areas Sat & Sun, but not expected to provide enough precip to impact drought conditions.

  • More rains in Argentina are expected to fall early next week.

  • Rains expected in late March should benefit wheat planting which begins in May. Analysts are expecting more wheat area to be planted in Arg than LY.

  • Rio Grande do Sul, Brazil is expected to receive precipitation next Tuesday.

  • Showers in central, western and northeastern crop growing regions of Brazil are expected to continue into the weekend.

Gary Cohn Resigns

  • Gary Cohn, Trump’s top economic advisor announced his resignation on Tues.

  • Gary Cohn strongly opposed steel and aluminum import tariffs.

  • S&P 500 and DJIA futures are off sharply following the announcement.

  • Many analysts are concerned that the departure of Cohn who strongly opposed tariffs will leave Trump surrounded by advisors who lean toward protectionist policies.

CME lifts Force Majeure

  • CME lifted the Force Majeure that it had declared on Feb. 22nd for corn shipping stations along the Illinois river.

Morning Comments – March 06


  • Wheat lower in the overnight on higher crop ratings.

  • Time is running out for NAFTA deal.

  • Strong wheat and soybean inspections.

  • Exporters sell 120,000 metric tons of Soybeans for delivery to China during the 2017/2018 marketing year. -USDA

South America

  • Weather model for Argentina mostly unchanged with some rain expected over the weekend but strong precipitation is expected to be localized.

  • Brazil precipitation continues to delay fieldwork in central and north eastern regions. Driest areas in south are expected to receive some precipitation starting next Monday.

HRW Wheat Conditions

  • USDA released weekly state crop conditions reports on Monday.

  • Kansas HRW wheat rated good-to-excellent increased to 13 percent from 12 percent in monthly report.

  • Oklahoma HRW wheat rated good-to-excellent increased to 6 percent from 4 percent in the monthly report.

  • Texas HRW wheat rated good-to-excellent increased to 10 percent from 4 percent in the monthly report.


  • U.S. Trade Representative Robert Lighthizer says that talks have not advanced in the way they had hoped and that time is running out.

  • The trade representative expressed that he would prefer a three way NAFTA deal, but is prepared to move to a bilateral basis if no agreement can be made.

U.S. Weather

  • Evening GFS model increased precipitation to between .2 to 1 inch during the middle of next week across West Texas, Oklahoma, eastern Kansas and eastern Nebraska.

  • The latest model also suggested increased precipitation throughout the corn belt late next week.

  • The winter storm dropped between 4 to 11 inches throughout Montana, North Dakota, South Dakota and western Minnesota. Moisture should help increase topsoil moisture to areas considered to be in moderate drought.

Australian Wheat Production Expected to Rise

  • Australian Bureau of Agriculture, Resource Economics and Rural Sciences forecasts Australian 18/19 wheat production will increase to 23.7 MMT from 21.2 MMT last year.

  • Forecast cited La Nina conditions expected to increase precipitation to Australia’s eastern coast.

Weekly Export Inspections

  • Strong wheat and soybean export inspections while corn inspections disappoint expectations.