Morning Comments – Apr 21

Soybeans pointed higher going into the morning break while corn and wheat were hovering around the unchanged mark. However, the release of Canada’s plantings for 2017 was weighing on the market heading into the break.

USDA reported the sale of 146,000 MT of soybeans to unknown destinations for 2016/17

This morning Stats Canada released their acreage forecasts for wheat and canola. For wheat, they expected Canadian farmers to plant 23.18 million acres, nearly unchanged from 23.21 last year. For Canola they peg plantings at 22.4 million acres vs 20.4 last year. Both numbers were higher than analyst expectations going into the report.

Wheat was coming off its worst one-day loss this year, giving up 13 on Thursday’s trade. Favorable weather in the Plains continues to raise the prospect for higher wheat yields. On the export front, US export commitments of wheat have reached the annual projection of USDA. But, 5.4 MMT of those commitments have yet to be shipped with 7 weeks remaining in the marketing year. That means weekly shipments need to reach 770,000 MT a week but have only averaged 680,000 MT in the past two weeks.

In overnight deals, KFA feed group from South Korea bought 60,000 MT of optional-origin corn.

Morning Comments – April 20

Grain markets were trying to bounce higher going into the morning break with soybeans leading the complex on a 4-cent advance.

News stories were reported yesterday that a shipment of corn from Paraguay was due to arrive next month at the U.S. port of Wilmington, North Carolina. The vessel Nord Bering was moored at the Brazilian port of Paranagua, was scheduled to arrive in Wilmington by May 20. The grain was shipped to Brazil from land-locked Paraguay before being loaded onto the U.S.-bound vessel. If loaded to its 61,000 MT capacity, the shipment would be the biggest-ever U.S. import of Paraguayan corn.

In weather, a storm system will impact central portions of the HRW Wheat area east through northern portions of the Delta which will moves to the East Coast by Sunday. Substantial rain is expected and some localized areas
of flooding. The rain will promote some fieldwork delays. Western Kansas will benefit from the rain due to dry topsoil and subsoil conditions; though, rain amounts will be greater to the east.

Oilseeds industry group Abiove on Thursday raised Brazil’s 2016/17 soybean output forecast to 110.7 million tonnes, a 3.2 rise from an estimate released in March, according to a statement.  Abiove also raised Brazil’s soybean export forecast to 60.3 million tonnes, a slight 0.8 percent increase from the previews estimate, the statement said.

Export Sales-

Actual

Estimated

Wheat – OC

414

250-450

Wheat – NC

137

100-300

Corn – OC

756

700-1,000

Corn – NC

91

100-300

Soybeans-OC

211

300-500

Soybeans-NC

14

100-300

Ukraine’s UkrAgroConsult agriculture consultancy on Wednesday raised its forecast for the 2017 grain harvest to 61.4 MMT from a previous estimate of 60.9 MMT. A stronger harvest would likely raise the 2017/18 grain export forecast to 39.5 MMT from 38.8 MMT. However, reports this morning suggest cold temps and snow in the region could delay corn planting.

In the US, heavy rains continue to be in the forecast over the next 7 days for much of the Plains and Western Cornbelt. At the moment, the heaviest rainfall (widespread 2+ inch totals) is likely across the southern Midwest stretching where plantings could be limited, particularly across portions of southern Illinois/Indiana and Kentucky. With delays already developing across these areas, it’s unlikely plantings will be able to make up for these in the next 1-2 weeks.

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 – April 19

Soybeans and corn were trying to stage a modest recovery heading into the morning break while wheat continued to lifelessly drift lower. In outside markets, equity futures and the US Dollar were in positive territory, trying to reverse recent losses.

China will work off its corn stockpile in the next three to five years, said an executive at one of the country’s top corn processing firms on Wednesday, as firms ramp up processing capacity to use up the old stocks of grain. With 250 MMT of corn stocks or roughly a year’s worth of use, processors there are expected to ramp up capacity to 70 MMT a year by the end of 2018, up from more than 50 MMT currently.

Ukraine’s UkrAgroConsult agriculture consultancy on Wednesday raised its forecast for the 2017 grain harvest to 61.4 MMT from a previous estimate of 60.9 MMT. A stronger harvest would likely raise the 2017/18 grain export forecast to 39.5 MMT from 38.8 MMT. However, reports this morning suggest cold temps and snow in the region could delay corn planting.

In the US, heavy rains continue to be in the forecast over the next 7 days for much of the Plains and Western Cornbelt. At the moment, the heaviest rainfall (widespread 2+ inch totals) is likely across the southern Midwest stretching where plantings could be limited, particularly across portions of southern Illinois/Indiana and Kentucky. With delays already developing across these areas, it’s unlikely plantings will be able to make up for these in the next 1-2 weeks.

 

Morning Comments – April 18

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)

 

Morning Comments – April 17

Grains were mostly flat heading into the morning break with soybeans holding a narrow, positive gain while corn and wheat were in negative territory. In outside markets, the US Dollar was off 0.5% while equities were trying to start the day on positive ground.

China’s planned corn acreage will fall 4 percent this year, its second straight annual drop, as they try to whittle down their huge corn glut and boost the planting of soybeans. The shrinking corn acreage will be accompanied by an 8.1% jump in land dedicated to soybean crops this year, according to a survey of 110,000 Chinese farmers by the National Bureau of Statistics, released on Monday. The estimates are in line with market expectations, according to analysts.

In the US, the next week should bring significant moisture to the Western Cornbelt and Central Plains.  By Friday, a storm system should bring widespread rains to OK/KS dropping up to 2 inches of rain thru much of the key HRW wheat growing area. Iowa and Illinois should see heavier rain totals on Friday and Saturday of 1 to 2 inches.

Russia is expected to reduce its grain exports to between 3.0 and 3.1 MMT in April from 3.8 MMT in March due to lower supplies to Turkey, SovEcon agriculture consultancy said in a note on Monday. Turkey, the second largest buyer of Russian wheat after Egypt, has effectively put purchases of wheat, corn and sunflower from Russia on hold by imposing high import tariffs from mid-March. The loss of the Turkish market is likely to be temporary because its flour millers depend on supplies from Russia.

The US Dollar Index appears poised to take a run below the 100-mark for the first time in nearly two weeks. U.S. retail sales fell for a second straight month in March and consumer prices dropped for the first time in just over a year, underscoring the magnitude of the loss of economic growth momentum in the first quarter. Specifically, retail sales dropped 0.2% last month compared to expectations for 0.1% decline. Meanwhile, the consumer price index (CPI) decreased 0.3% from the prior month while annual inflation eased to 2.4%.

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 April 13

Grains continued their recovery overnight with May beans eclipsing the $9.55 mark for the first time in 9 trade sessions, while corn and wheat were also posting modest advances. In outside markets, the US dollar sunk 0.7% lower at one point overnight, but paired those losses.

Rains are expected to be consistent in the Western Cornbelt over the next 9 days. In total, 3 to 5 inches of rains could fall in IA/IL/WI which may hamper fieldwork and early corn planting.

In international news, South Korea feed group KOFI put out a tender to buy 115,000 MT of feed wheat. Japan also bought food wheat as part of the regular tender process. This week’s total of 126,405 saw the US get 68,905 of the total.

Weekly export sales from USDA were mostly disappointing with old- and new-crop corn coming in below expectations while old-crop soybeans was at the low end and new-crop deals were below the low end.

Export Sales-

Actual

Estimated

Wheat – OC

421

250-450

Wheat – NC

125

50-250

Corn – OC

738

800-1,100

Corn – NC

50

100-300

Soybeans-OC

402

400-600

Soybeans-NC

125

150-350

The US Dollar sank sharply lower overnight after President Trump said the strength in the dollar was a concern for the US. Export sensitive industries like manufacturing and agriculture can be hampered by the rise in the US Dollar. Since November, the US Dollar has risen 3%.

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 – April 12

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)

 

Morning Comments – April 11

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)

 

Morning Comments – April 10

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)

 

Morning Comments – April 07

Grains were mixed and range bound in overnight trade action. In outside markets, equity markets were fractionally lower while the US Dollar index tried to eclipse the 101 mark for the first time in two weeks. Crude oil was also inching higher.

Overnight, Algeria was said to have bought 570,000 MT of wheat, likely to be sourced from the EU. Russia and Turkey plan to hold talks on import restrictions imposed by Ankara on Russian wheat in two weeks time, deputy prime minister Arkady Dvorkovich told reporters on Friday. The restrictions were not logical, he said. Turkey has put on hold purchases of wheat, maize (corn) and sunflower from Russia by imposing high import tariffs from mid-March.

In China, soy crush margins continue to be pressured hitting their lowest mark in 9 months. This could hamper their import appetite for soybeans just as South America ramps up exportable supplies.

The Midwest and Delta is expected to see limited rains between Monday and Thursday but rains are expected to intensify by next weekend. Overall, weather should be good for corn seeding pace given warmth & limited showers through mid-month. In the Plains, rains return to winter wheat in the 6-10 & mid/late 11-15 day to support crop growth with no seeming threats of cold.

The US jobs report this morning was below expectations with only 98,000 new jobs added as compared to 180,000 expected. The unemployment rate did dip to 4.5% from 4.7% previously, the lowest in a decade.

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